Gas Supply Agreements

Take or pay provisions are now widely used in long-term supply and supply agreements in the energy sector, a notable example being gas supply contracts. These Terms and Conditions, as amended from time to time (the “Terms and Conditions”), apply to the gas supply contract (“Agreement”) between LCC Group Limited T/A Go Power, if any, and any company, legal entity or party requesting a gas supply (the “Customer”) (collectively, the “Parties”). In view of the known non-contractual capacities of the DBNGP, it cannot therefore be concluded, in the absence of more detailed information to the contrary, that neither the contract for the supply of Burrup fertiliser gas nor the contract of the East Spar Joint Undertaking for the supply of the Pinjarra COGENERATION plant illustrate the existence of alternative economic target markets for gas producers in the hub of the island of Varanus, which currently supply gas through the GGP. This article aims to highlight some of the uncertainties surrounding the legal treatment of take or payment clauses by providing an overview of the practice of take or payment terms in gas supply contracts and by examining how these clauses are interpreted and applied in common law and civil law, as well as in European Union law and certain Arab laws. The price reflects various possible maturities, contractual benefits and holding premiums (the supplier keeps the price offer linked in the natural gas supply agreement open for a certain period of time that goes beyond the usual day so that the municipality can verify it before signing the natural gas supply agreement). This publication is for your convenience and does not constitute legal advice. This publication is protected by copyright. © 2016 White & Case LLP Essentially, the take or payment regulations stipulate that a buyer must pay for certain amounts of energy (e.B. gas) from a seller, even if the buyer is unwilling or unable to take such quantities. At the most basic level, “take or pay” clauses require the buyer to buy and receive certain quantities of gas or pay for the gas, whether or not he accepts the delivery. . A certified copy of the applicant`s gas supply contract with its potential customer with details of its pricing formula and pricing mechanism or pro forma copies of the contracts to be concluded with potential customers for the CNG refuelling facility.

Termination of service  End of term: The natural gas supply contract with the supplier terminates after its expiry. Early termination: The company authority or district council has the right to terminate the natural gas supply contract before the end of the term if the supplier commits a notice of default. The corporation authority or district council may grant a representative of the corporation authority or district council the authority to approve the natural gas supply agreement with the selected supplier on behalf of the corporation authority or district council. M.A. Polkinghorne; “Take-or-pay conditions in gas supply contracts” OGEL 4 (2014), www.ogel.org URL: www.ogel.org/article.asp?key=3516 purpose of these provisions is to ensure that the seller receives a guaranteed source of income under the contract, regardless of the quantities actually withdrawn by the buyer. They often operate where the supplier had to incur significant debts and capital commitments in order for the project to be launched. (At the same time, of course, buyers often had to make commitments themselves; consider post-gas installations in an LNG project.) Membership of OGELFORUM (living discussion platform that brings together the international oil, gas and energy community) An argument against this is that in the context of gas contracts concluded between large experienced companies on the basis of legal advice, the arrangements for taking or payment are not inappropriate and the parties should stick to their trade agreements. This argument is reinforced by the frequent mitigation of the potentially severe effects of take or payment clauses through the use of one or more of the mechanisms. A second argument is based on the fact that one of these mechanisms, which is often included, is “makeup,” in which the buyer can recover the gas he paid for at a later date. Finally, if the buyer takes gas, the situation (according to the text of the contract) can no longer constitute a breach of contract and can be qualified as late performance. The first payment should therefore not be considered a penalty for breach of contract.

Other technical arguments of a more legal nature are intended to characterize the underlying obligation as a mere debt or as an obligation subject to an injunction for a particular service. These arguments explain why courts called upon to review take-on or payment clauses generally tended to uphold them. Existing Gas Supply Contract means a contract between a consignor and a customer for the sale and/or transportation of gas to a customer of a shipper under which the gas is or will be delivered to the customer at or immediately after a point of sale that existed at the time of the relevant amendment to the law in accordance with clause 7.10; and excluding any changes to this Agreement that become effective after that date. Although take or pay clauses are widely used, the rules applicable to these clauses are not fully regulated by most national laws. There is often concern as to whether these provisions constitute a form of sanction that a court or arbitral tribunal should not apply. The supplier and the company authority or district board of directors enter into a separate customer service plan contract or the terms are included in the natural gas supply contract. Fill out the registration form and answer a few simple questions to get a quote. This article was originally published in October 2014 by Michael Polkinghorne and has been modified to reflect subsequent legislative additions and changes. You just have to take the (rare) situation in which a buyer cannot take a quantity of gas but still has to pay for it, and combine this with the (rarer) case in which the seller is able to sell this gas to someone else. In a traditional take or payment scenario, the buyer cannot claim credit for the other sale, and so the seller is paid twice. The question then arises as to whether the fact that the buyer is required to pay an amount in excess of the seller`s actual loss is a cause for concern.

And if so, should the provision be found to be unenforceable as a penalty clause? Natural Gas Supply AgreementThe company authority or district council is confronted with the selected supplier and has the option of entering into a natural gas supply contract (“Agreement”). Auctions can have different durations. Article by: OGEL 4 (2014), in International Contracts Access to OGEL Journal articles (well over 3000 articles in total for premium account holders) Access to legal and regulatory data (well over 10000 documents). . . .