Hydrogen contracts to differ from LNG

Take-or-pay contracts and destination clauses will be hard to implement in hydrogen market

Hydrogen is likely to develop contracting structures that differ from the way LNG is traded today, according to industry experts. The LNG market is often cited as a template for the development of a global hydrogen trade. One of the hallmarks of long-term LNG contracting is a longstanding reliance on take-or-pay clauses, which have traditionally underpinned the development of multibillion-dollar export projects around the world. These contracts give sellers some guaranteed returns even if buyers do not follow through on purchasing agreed amounts of a commodity and were vital in de-risking projects in the early days of the LNG market. But while such contracts remain common in the LNG sector,