Splitting EPC Contracts In Energy Projects

Law360, New York (April 11, 2012, 11:17 AM EDT) -- One innovation that has become more prevalent in international energy projects, such as power, utilities and LNG projects, involves an extension of the build-operate-transfer (BOT) model whereby the works under an engineering, procurement and construction (EPC) contract are "split" into two separate contracts. A split structure may offer reduced taxation exposure in some jurisdictions for the contractor, with the savings leading to a lower contract price to the project company.

With careful consideration and management of the legal issues involved, under a split EPC structure, a...
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