A gas supply agreement between a buyer and seller contains a number of standard terms. Of course, a full agreement would contain substantial additional standard language. The complete standard form agreement typically used in the industry can be obtained at www.naesb.org. Here is an example of terms in a gas supply agreement.
- Contract Quantity — The Contract Quantity is 8,000 MMBtu per day.
- Performance Obligation — Seller agrees to sell and deliver, and Buyer agrees to receive and purchase, the Contract Quantity for a particular transaction in accordance with the terms of the Contract. Sales and purchases will be on a firm basis. Firm shall mean that either party may interrupt its performance without liability only to the extent that such performance is prevented for reasons of Force Majeure as defined within this contract.
- Delivery period— Deliveries shall be made from July 1, 2020, through July 31, 2020.
- Delivery point — Gas shall be delivered by the Buyer and received by the Seller at the Muddy Creek Compressor Station on the Kern River Pipeline. Seller shall have the sole responsibility for transporting the Gas to the Delivery Point(s). Buyer shall have the sole responsibility for transporting the Gas from the Delivery Point(s).
- Price — The price shall be the daily Spot Price as published by Natural Gas Intelligence (NGI) for the relevant day. If no price or range of prices is published for such day, then the Spot Price shall be the average of the following: the price (determined as stated above) for the first day for which a price is published that next precedes the relevant day; and the price (determined as stated above) for the first day for which a price is published that follows the relevant day.
- Payment date — Payment shall be due on the 25th day of the month following delivery of the gas.