Puerto Rico Natural Gas Inventory Forward Sale Contract is a financial agreement that allows buyers and sellers to trade natural gas inventory in Puerto Rico at a predetermined price and future date. It is a derivative contract used by energy companies, utilities, and investors to manage their exposure to price fluctuations in the natural gas market. This contract enables participants to secure a fixed price for the delivery of natural gas in the future, which helps them in planning and budgeting for their fuel needs. The primary goal of this forward sale contract is to mitigate price risk and ensure a stable supply of natural gas for the island of Puerto Rico. Key participants in the Puerto Rico Natural Gas Inventory Forward Sale Contract are natural gas producers, suppliers, distributors, and end-users. Producers aim to lock in prices to ensure profitability and secure demand for their production. Suppliers and distributors utilize the contract to ensure a consistent supply of natural gas to meet customer requirements. End-users such as power plants, industrial facilities, and residential consumers benefit from a stable and predictable fuel pricing structure. There are several types of Puerto Rico Natural Gas Inventory Forward Sale Contracts available, depending on the specific requirements and preferences of the participants: 1. Fixed-Volume Contracts: These contracts establish a fixed quantity of natural gas to be delivered at a predetermined price over a specified future period. Both the buyer and seller agree on the volume and price upfront, providing certainty in supply and cost. 2. Swing Contracts: Swing contracts enable buyers to have flexibility in the quantity of natural gas they can purchase within a specified range. This allows them to adjust their purchases based on fluctuating demand and consumption patterns. 3. Indexed Contracts: Indexed contracts tie the price of natural gas to a specific market index, such as the NYMEX (New York Mercantile Exchange) natural gas futures contract. This type of contract provides a benchmark price and allows participants to align their costs with prevailing market rates. 4. Heat Rate Contracts: Heat rate contracts establish the price of natural gas based on the efficiency of energy conversion from natural gas to electricity. This mechanism is particularly relevant for electricity generators or power plants. These various contract types cater to the diverse needs of participants in the Puerto Rico natural gas market, allowing them to effectively manage price volatility and ensure a reliable supply of energy.
Puerto Rico Natural Gas Inventory Forward Sale Contract
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Biggest Natural Gas Pipeline Companies in the World ONEOK, Inc. ... Kinder Morgan, Inc. ... Targa Resources Corp. ... Berkshire Hathaway Energy. ... Enterprise Products Partners L.P. (NYSE:EPD) ... Enbridge Inc. ... Plains All American Pipeline, L.P. (NASDAQ:PAA) Revenue 2021: $42.08B. ... Energy Transfer LP (NYSE:ET) Revenue 2021: $67.42B.
"Parking" service is a service where shippers may deliver additional gas during specified periods, which gas the pipeline will hold for the shipper for use in the future. "Lending" service is a service where a pipeline will lend gas to a shipper during a specified period, with the gas to be repaid at a future time.
It is most commonly held in inventory underground under pressure in three types of facilities. These underground facilities are depleted reservoirs in oil and/or natural gas fields, aquifers, and salt cavern formations. Natural gas is also stored in liquid or gaseous form in above?ground tanks.
How is Natural Gas Stored? Natural gas is stored underground primarily in three reservoir types: depleted oil and natural gas fields, salt formations and depleted aquifers. Natural gas may also be stored above ground in refrigerated tanks as liquefied natural gas (LNG).
In a typical virtual storage arrangement, a physical storage location is not specified. The shipper delivers natural gas to an agreed-upon pipeline location and the transporter takes custody of the natural gas.
Natural gas, like most other commodities, can be stored for an indefinite period of time. The exploration, production, and transportation of natural gas takes time, and the natural gas that reaches its destination is not always needed right away, so it is injected into underground storage facilities.