Step 1: Contractual and Market Analysis

• Review of LNG Supply Agreement: Conducted a detailed examination of the long-term contract, with a specific focus on the price review mechanism, alignment with relevant industry practices, and consistency with the effective evolutions of market and regulatory conditions between the Reference and Review dates of the Price Review.‍
• Alignment on the optimal defense strategy: Collaborated with legal advisors and the client’s business team to evaluate potential argumentation scenarios, focusing on LNG market dynamics, pricing benchmarks, and supply chain considerations. This included a detailed assessment of contractual clauses linked to LNG pricing mechanisms and a review of global and regional market trends to reinforce the client’s position within the broader market context.

Step 2: Trigger Assessment

• Market Evolution Analysis: Identified significant changes in LNG market fundamentals, including global supply-demand dynamics, shifts in transportation costs, regulatory adjustments, and the evolution of the competitive positioning of competitors in the end-user Reference gas market.
• Market Dynamics Review: Analyzed regional and global LNG market trends, benchmarking against indices such as JKM, TTF, and Henry Hub. Examined regulatory changes, shipping costs, and liquidity in wholesale and end-user Reference markets during the Reference and Review periods.
• Sensitivity Testing: Evaluated potential pricing models using alternative approaches such as flow-price, stock-price as applicable to the netback value calculations, considering Reference and Review periods to assess the most relevant and robust methodology to be presented to the tribunal.

Step 3: Netback Value Calculation

• Backward calculation of gas value: Applied a netback value methodology to evaluate regasified LNG’s value across the full set of downstream end-user segments in the Reference Market. The calculation traced the economic value of LNG backward from end-user prices, accounting for:some text
  • Shipping and import costs
  • Regasification expenses
  • Transmission, Storage and Distribution costs
  • Competitive margins in end-user market segments

Step 4: Production of Expert Reports

• Expert Reports: A series of expert reports was developed, tailored to different phases of the dispute, including:some text
  • Initial Report: Consolidated critical market insights, detailed contract analysis, and netback value calculations, providing a strong foundation for the client’s argument
  • Supplemental Reports: Addressed counterarguments and refined analyses in response to new evidence presented during the arbitration process
  • Comprehensive Final Report: Integrated a executive summary of key findings to deliver a thorough and compelling case, strengthening the client’s position

Step 5: Preparation for Hearings

• Mock Hearing Simulations: Participated in simulations to prepare technical teams for arbitration hearings, with a focus on presenting expert findings clearly and persuasively
• Cross-Examination Preparation: Anticipated and prepared responses to potential cross-examination questions, ensuring consistency, accuracy, and credibility of expert testimonies
• Expert Witness Coaching: Trained expert witnesses to effectively communicate complex economic and market-based evidence to arbitrators in a clear, concise, and impactful manner

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