LNG Annual Delivery

Program (ADP)
Overview
Liquefied Natural Gas (LNG) is the perfect solution for safe and cost-
effective transport of natural gas. The LNG Annual Delivery Program (ADP)
is a critical tool for ensuring the reliable and timely delivery of LNG across
the globe.

TA by Thamer Alqershi
Lower Costs, Higher Flexibility, and
Lower Emissions

Cost Efficiency Flexibility Eco-Friendly

LNG is less expensive to
produce and transport by sea
than traditional natural gas,
resulting in significant savings
for both the producer and the
buyer.
LNG offers greater flexibility in
terms of supply and delivery
locations compared to
traditional natural gas, making it
an indispensable resource for
energy providers.
LNG has a lower carbon
footprint than traditional natural
gas, offering a cleaner and more
sustainable source of energy for
the world.
The Annual Contract Quantity (ACQ)
Importance

It provides clarity and certainty to both parties,

enabling them to plan and operate their
businesses more effectively.

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Definition Flexibility

The ACQ is the total volume of LNG that the The ACQ is usually not a fixed amount, and it can
producer promises to deliver to the buyer within a be revised periodically to adjust to changes in
year. market conditions or operational constraints.
Delivery Schedule and Points
Delivery Schedule
The schedule outlines the
dates and windows for each
LNG cargo delivery. It allows
direct coordination between
the producer and the buyer,
ensuring timely delivery of the
LNG.
Delivery Point
The delivery point is the
location where the LNG is
transferred from the producer
to the buyer. It defines the end
of responsibilities and starting
point for the other party.
Delivery Conditions
These define the quality,
pressure, temperature, and
other specifications of the
LNG. The conditions are
essential for both parties,
providing certainty and
compliance with international
standards.
Force Majeure Clause
Why is it important?

This clause allows parties to modify or suspend

their performance in case of events like pandemic,
natural disasters, labor strikes, etc. It brings clarity
to the parties and reduces business uncertainty.

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What is it? How is it invoked?

The force majeure clause is a legal provision that
allows either party to be exempt from its
obligations in circumstances beyond their control.
Invoking this clause is a formal process that
usually requires both parties to confirm the
existence and impact of the event and agree on
the terms and conditions of suspension or
modification of their obligations.
Main Components of the
ADP
1 Annual Contract 2 Delivery Schedule
Quantity (ACQ)
Defines the delivery dates
The agreed-upon volume of and windows of each LNG
LNG to be delivered in one cargo.
year.

3 Delivery Point 4 Delivery Conditions

The location where the The specifications that

transfer of LNG occurs. dictate the quality, pressure,
temperature, and other
parameters of the LNG.

5 Force Majeure Clause

A legal provision that suspends or modifies obligations based on

the occurrence of unforeseeable events beyond the control of the
party invoking it.
Revisions to the ADP
Definition
ADP revisions are changes
made to the delivery program
throughout the year.
Importance
ADP revisions allow both
parties to adjust to changes in
the market, such as
fluctuations in demand or
supply, to keep the delivery
program optimized. They must
follow the terms and
conditions of the sales and
purchase agreement.
Process
The ADP revision process is
usually a collaborative process
between the producer and the
buyer. It requires approval from
both parties and should be
documented to ensure clarity
and avoid misinterpretations.
The Importance of the ADP
Efficiency
The agreement brings clarity and
certainty, enabling the parties to plan
and operate their businesses more
effectively.
Obligatory
The components of the agreement
becomes binding to both parties and
must be adhered to unless otherwise
agreed upon by both parties.

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Reliability Flexibility

ADP ensures reliable and timely ADP provides the flexibility to adjust
delivery of LNG to meet the growing to changes in demand, supply, or
global demand. operational constraints.
Summary
Total Volume ACQ: Total volume of LNG to be delivered in one
year.

Delivery Schedule Determines delivery dates and windows of each

LNG cargo.

Delivery Point Location where transfer of LNG takes place.

Delivery Conditions Quality, pressure, temperature, etc. defined by the

agreement.

Force Majeure Clause Suspends or modifies obligations based on

unforeseeable events.

ADP Revisions Allow for changes in the delivery program

throughout the year.