Applying Non-Contractual Methods and Quantitative Terms to Increase the Durability of Long-Term Natural Gas Sale Agreements

The success of long-term gas sales contracts is largely related to the ability of the seller and the buyer to adapt the terms of the contract to their conditions, infrastructure, facilities and market. If the buyer's demand changes from season to season and seasonally fluctuates, problems and complexities arise for the seller and he may need to provide the excess capacity to produce, refine and transport gas that only used for a few monthswhich will eventually make gas prices more expensive. The present article seeks to examine the strategies for managing seasonal fluctuations in buyer demand and subsequently increase the stability of the contract. Findings indicate that unlike the method of creating excess capacity by the seller, the use of non contractual methods such as finding counter-swing customers, providing maximum buyer gas demand from a second source and gas storage or contractual methods and optimal use of quantitave terms is effective in managing the buyer's seasonal demand. These solutions, while fulfilling the maximum buyer demand for gas, will not only not increase the price of gas, but will also increase the durability of gas sales agreements.