Seller and Buyer make a mutual agreement, then the diversion of the cargo is permitted — subject to sharing the additional profit created by such a diversion, by paying a penalty fee. In the European Union and some other jurisdictions, it is not permitted to apply the profit-sharing clause in LNG SPAs. Cost of LNG plants For an extended period of time, design improvements in liquefaction plants and tankers had the effect of reducing costs. In the 1980s, the cost of building an LNG liquefaction plant cost $350/tpa (tonne per annum). In the 2000s, it was $200/tpa. In 2012, the costs can go as high as $1,000/tpa, partly due to the increase in the price of steel. As recently as 2003, it was common to assume that this was a “learning curve” effect and would continue into the future. But this perception of steadily falling costs for LNG has been dashed in the last several years. The construction cost of greenfield LNG projects started to skyrocket from 2004 afterward and has increased from about $400 per ton per year of capacity to $1,000 per ton per year of capacity in 2008. The main reasons for skyrocketed costs in LNG industry can be described as follows: Low availability of EPC contractors as result of extraordinary high level of ongoing petroleum projects worldwide. High raw material prices as result of surge in demand for raw materials. Lack of skilled and experienced workforce in LNG industry. Devaluation of US dollar. Very complex nature of projects built in remote locations and where construction costs are regarded as some of the highest in the world. Excluding high cost projects the increase of 120% over the period 2002-2012 is more in line with escalation in the upstream oil & gas industry as reported by the UCCI index The 2007–2008 global financial crisis caused a general decline in raw material and equipment prices, which somewhat lessened the construction cost of LNG plants. However, by 2012 this was more than offset by increasing demand for materials and labor for the LNG market. Small-scale liquefaction plants Small-scale liquefaction plants are suitable for peakshaving on natural gas pipelines, transportation fuel, or for deliveries of natural gas to remote areas not connected to pipelines. They typically have a compact size, are fed from a natural gas pipeline, and are located close to the location where the LNG will be used. This