Masterclass in Long-term Charters for FPSO, FLNG, FSRU & FSU

Worldwide use of floating vessels for the production, transportation and storage of hydrocarbons has ballooned in recent years. This masterclass will teach participants how to develop and negotiate the long-term charter parties that often underpin use of such vessels.

What you will learn

  • How to contract a service, not a vessel
  • Evaluating charter vs. buy options
  • Understanding and managing technical risk at various stages
  • Financing for the shipowner and how charter rates are priced, and how financing can influence the contract terms
  • Structuring a procurement programme to obtain the best outcome for the charterer
  • Evaluation of offers using discounted cash flow techniques in a full life-cycle and full value chain methodology
  • Negotiating charter rates and structures
  • Structuring a performance regime to align charter payments with charter’s project economic drivers
  • The main terms in a long term charter agreement and delineation of risk

This course combines lectures with syndicate work and trainer critiques to consolidate learning. Case studies for FPSO, FLNG and FSRUs will be used according to course participant’s interests.

Principal Trainer(s)
John Tan

Course Outline

1. Market overview and vessel providers
2. Establishing the strategic context and project drivers
3. Structuring a procurement programme (workshop)
4. Front-End Engineering Design: rationale and requirement
5. Charter agreement through the lens of:

a) Construction/ conversion and pre-operations phase

b) Sail-away and arrival
c) Hook-up and commissioning
d) Operations phase
e) Offtake arrangements
f) Managing performance risk and default

6. Negotiating a term sheet for a long term charter agreement (workshop)