Legal evaluation of liquefied gas sales contract with risk management approach

Contract strategy shapes the management decisions of all parties in the project. It basically depends on three main components namely project delivery method, contract price arrangement and contract clauses. Contract lifecycle management (CLM) is becoming a powerful tool for business optimization as pressure grows on modern organizations to develop contract competence. In the context of upstream oil and gas industry, complex contract landscape and escalating burden of regulatory compliance have further driven the demand for effective management of contractual agreements. In the context of upstream oil and gas industry, the diversified complexity of contracts has been driven by the complicated nature of business and escalating requirements of regulatory compliance in areas such as health, safety and environmental protection. Contracts in oil and gas industry, by and large, often contain complicated terms and conditions governing all aspects of the service or operation, detailed description of the responsibilities of each party, heavy technical and personnel requirements and list of pricing. An effective management of contract is therefore critical for all contracting parties, regardless if it is the main contractor or the subcontractor. A large amount of gas is extracted, prepared and transported, so it is important to sell gas to our country and to potential sellers and investors in the field of liquefied gas; In addition to ensuring profitability, it also ensures the recovery of capital. In such a situation, buyers who are committed to delivering gas to the final consumers in the domestic markets, must ensure that the gas they need will be delivered without any problems via the seller. To solve this problem, the parties must manage the risk in their contracts, as a result they will be able to hinder problems in this field or conclude their contracts in such a way that they are not subjected to any damage in case of problems.

Keywords:

Legal evaluation , Liquefied Gas , Contractual terms , Management strategies , Iran