There is an increasing number of competing existing and potential suppliers of liquefied natural gas (LNG) (Fig. 1). Which of these projects will succeed, in large part, be determined by their price competitiveness.

Many factors in the derivation of the minimum, or breakeven, price for an LNG project are driven by technical and logistic considerations - however, the price also needs to be sufficient to cover government taxation and other fiscal impositions at different stages of the project.

The fiscal arrangements for LNG projects are often complex and misunderstood and this paper includes a review of contractual and fiscal arrangements for existing LNG projects and certain proposed LNG projects worldwide.

Particular attention is paid to the different terms applicable to upstream and downstream components of each project and how transfer prices and the fiscal "ring fence" is established.

Finally, the paper discusses the impact of both existing and possible fiscal incentives and considers the role of the Government Take in determining breakeven LNG prices for a number of existing and potential LNG projects.

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