Take Or Pay Gas Contracts
What this document covers
The Take or Pay Gas Contracts form is a lease rider used in oil and gas leasing. It allows the Lessor to establish specific royalty rights when the Lessee enters into a gas purchase agreement with a take or pay provision. This provision ensures that the gas purchaser either takes delivery of a minimum quantity of gas or makes periodic payments for gas not taken. This form is crucial for protecting the financial interests of the Lessor while accommodating the Lessee's contractual obligations.
Key parts of this document
- Take or pay provision: Specifies the obligations of the gas purchaser and Lessee regarding minimum gas deliveries.
- Royalty payment clause: Outlines the percentage of payments that must be paid to the Lessor by the Lessee.
- Credit application for royalty payments: Details how payments under the take or pay contract apply to the Lessee's minimum royalty obligations.
- Refund obligations: Addresses potential refunds to the gas purchaser and the repayment responsibilities of the Lessor.
- Third-party beneficiary rights: Clarifies Lessor's rights regarding benefits under the gas purchase contract.
When to use this document
This form should be used when entering a lease transaction involving oil and gas and entering into a gas purchase contract that includes a take or pay provision. If you are a Lessor wanting to secure a share of royalties and establish protections in the event that the gas purchaser does not take the agreed minimum volume, this form is essential. It is particularly useful in scenarios where payments are made to the Lessee for unutilized gas quantities.
Who needs this form
- Lessors looking to safeguard their rights in gas lease agreements.
- Lessee entities entering into gas purchase contracts with take or pay provisions.
- Legal professionals advising clients in oil and gas transactions.
- Landowners involved in oil and gas leasing negotiations.
Completing this form step by step
- Identify the parties involved: Enter the names of the Lessor and Lessee.
- Specify the gas purchase contract details: Provide relevant terms and conditions of the take or pay agreement.
- Fill in payment percentage: Indicate the percentage of payments to be allocated to the Lessor.
- Detail refund obligations: Specify conditions under which refunds may occur and responsibilities for repayment.
- Include signatures: Ensure all parties sign the agreement for it to be legally binding.
Notarization guidance
This form does not typically require notarization to be legally valid. However, some jurisdictions or document types may still require it. US Legal Forms provides secure online notarization powered by Notarize, available 24/7 for added convenience.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Mistakes to watch out for
- Failing to specify the percentage of payments to the Lessor.
- Not including complete details of the gas purchase contract.
- Omitting the necessary signatures from all parties involved.
- Misunderstanding refund obligations related to unutilized gas volumes.
Why complete this form online
- Convenience: Downloadable legal form saves time compared to drafting from scratch.
- Editability: Easily customize the form to suit specific needs and scenarios.
- Reliability: Forms created by licensed attorneys ensure legal accuracy and compliance.
Legal use & context
- The Take or Pay Gas Contracts form is legally enforceable when properly executed by all parties.
- It should be tailored to comply with local laws governing oil and gas transactions for enforceability.
- Consideration of additional legal advice may be beneficial for complex agreements.
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FAQ
A gas sale agreement (GSA) is the key agreement documenting the sale and purchase of a quantity of natural gas. This standard document GSA provides for one seller and one buyer and is drafted from a neutral point of view.The GSA is a buyer-nominations contract and includes a take or pay commitment for the buyer.
Take or pay is a type of provision in a purchase contract that guarantees the seller a minimum portion of the agreed on payment if the buyer does not follow through with actually buying the full agreed amount of goods.
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Throughput agreement. An agreement to put a specified amount of product per period through a particular facility. An example is an agreement to ship a specified amount of crude oil per period through a particular pipeline.
Throughput fee is the payment made by fuel suppliers to the airport developer.It is considered as a market access fee which for your information is illegal in EU." Airfrance informed the AERA.
A fuel contract is an agreement between a wholesale provider and a retailer. The retailer agrees to only buy gas from the wholesaler for a given amount of time. The wholesaler agrees to provide the product to the retailer at a given volume and price.
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