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GSA: Gas Sales Agreement. SPA: Sales & Purchase Agreement. MSA: Master Sale Agreement.
These agreements generally fall into one of four categories (or a combination of the categories): risk agreements, concessions, production sharing agreements (PSAs, also known as production sharing contracts, PSCs) and service contracts.
Firm transportation service is typically sold on the basis of a ?fixed demand or reservation charge? (i.e., you pay for the service whether you use it or not), whereas interruptible service is typically sold on a ?commodity basis? (i.e., you pay only if you use it).
They are known as the four natural gases and include the first four alkanes ? methane, ethane, butane, and propane. An alkane is a hydrocarbon where single bonds link together each atom. Hydrocarbons are chemical compounds made up exclusively of carbon and hydrogen atoms.
Firm contracts and interruptible contracts are two broad types of contracts for purchasing natural gas, although the legal obligations for delivering natural gas between a fuel supplier and a natural gas-fired power plant can vary, depending on their specific agreements.
A natural gas future - like all commodities - is a contract obligating the buyer to purchase a specific quantity of natural gas at a future date and price. Delivery dates are set around the 15th day of the following month.
Under interruptible contracts, customers are not required to pay any fixed minimum amounts, but are instead billed based on actual volume of service provided for any given period. Payment for services under these contracts are typically due the month after the services have been performed.