Thanks to the shale gas revolution, Texas energy lawyers are experiencing a boom in the midstream and downstream energy sectors, including petrochemical, liquefied natural gas and liquefied petroleum gas. To help clients succeed in constructing major energy projects, lawyers should take innovative and thoughtful approaches to contract structuring.
Three kinds of contracts commonly are used for constructing major energy facilities. Counsel should understand the advantages and disadvantages of each: 1. engineering, procurement, and construction (EPC) contracts, which tend to offer turnkey benefits to facility owners; 2. EPC management (EPCM) contracts, which allocate more risk to the owner than do EPC contracts; and 3. convertible contracts. Our experience in the oil patch has shown us some of the most important practical considerations that lawyers should consider when choosing among these alternatives.
