LNG Chartering—an introduction

Produced in partnership with Nikki Chu of Stephenson Harwood

Practice notes

LNG Chartering—an introduction

Produced in partnership with Nikki Chu of Stephenson Harwood

Practice notes

Introduction

Practice Note: LNG—an introduction provides a general overview of the production and use of liquefied natural gas (LNG). This note concerns, specifically, the transport of LNG by sea.

The predominant purpose of liquefying natural gas is to transport it by sea, without a pipeline. In liquid form, LNG has around 1/600th of the volume it has as gas. The corresponding challenge, however, is that its boiling point is approximately -162°C. The low boiling point of LNG means that it is carried in specialised LNG carriers between terminals designed specifically for the handling of LNG.

Given that the production and use of LNG will almost certainly involve shipping, the contracts and legal issues involved in the transport of LNG by sea are central to the production and use of LNG.

The technical and commercial issues involved in the carriage of LNG by sea give rise to a number of particular legal issues that do not arise in the carriage of other cargoes. The purpose of this note is to consider what those issues are and how they may be

Nikki Chu

Senior Associate, Stephenson Harwood

Nikki is an experienced dispute resolution lawyer and has extensive experience in dealing with all types of dry shipping matters, including charterparty, bill of lading, cargo, ship management and shipbuilding disputes.

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She has acted for clients in English High Court proceedings, mediations and arbitrations. Nikki has acted for a diverse range of clients including shipowners, charterers, traders, cargo interests and their insurers. Nikki has a particular expertise in dealing with cargo claims including gas, oil, containerised and bulk cargoes involving complex technical issues. She also has experience of dealing with the dry shipping aspects of casualties, including vessel fires and stack collapses.

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Nikki has completed a year on secondment with an International Group P&I Club in London, where she gained invaluable commercial insight into insurance considerations, the resolution of shipping disputes and operational knowledge. As the initial point of contact, she provided advice on an urgent and real-time basis to Members and handled a broad range of FD&D and P&I matters, including off-hire and demurrage claims.

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Nikki is the current Chief Editor of Well Heeled, Stephenson Harwood's bulletin for clients engaged in LNG and gas transportation, trading and offshore production.

Jurisdiction(s):

United Kingdom

Key definition:

LNG definition

What does LNG mean?

Liquefied natural gas (LNG) can be defined as meaning any combustible hydrocarbon or mixture of hydrocarbons consisting primarily of methane and including other combustible and non-combustible gases in a gaseous state which are in a liquid state at or near atmospheric pressure at sea level. LNG is a form of processed natural gas; through the process of liquefaction it is transformed into a liquid which enables it to be transported to its destination where the liquid is regasified for sale.

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