China LNG Force Majeure Rejected as Virus Chaos Sparks Dispute

Let’s get something straight: its called “Take OR Pay” not Take AND Pay”. This means that if CNOOC cannot take the cargoes for whatever reason, they only have to pay for them and the vessels go somewhere else. Where? In a DES deal that is the seller’s problem. Of course, it’s hard to pay for something that you cannot take but there are usually Make Up rights. Question is – will CNOOC ever be in a position to use them? That’s a bad situation for CNOOC but it was clearly stated in the contract when they signed it. That will be funny fighting but the result must be clear to all of us.

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