gasTrading has developed a suite of Standard Form Agreements for purchasers in the Spot Market and for Purchasers seeking Firm Gas Supply. A standard form Agreement has also been developed for Sellers trading through gasTrading.
Refer to the How it Works page of the Spot Market section of the website for greater detail. Briefly, gasTrading accumulates all the gas available for sale on the Spot Market, and issues a notice to interested parties advising of the volume of gas indicatively available for the month. Purchasers then respond with offers to buy, which are ranked based on price. The highest price will be the first supplied, moving down the stack. gasTrading then allocates the available gas to the Purchases and allocates each sale across the Sellers. gasTrading sells gas as an agent for the Sellers.
For Spot Market Purchases gasTrading has developed the Gas Trading Agreement - Purchase Confirmation and the Short Term Gas Trading Agreement.
The Gas Trading Agreement - Purchase Confirmation is designed for parties intending to be regular purchasers of gas on the gasTrading Spot Market. This agreement is intended to operate as an umbrella agreement, put in place for a medium term of, say, 3 months to 3 years. After an umbrella agreement is signed Purchasers may lodge an Offer to Buy gas at any time (including in the monthly bidding round) by lodging a one page Confirmation Notice. To lodge an Offer to Buy, the Purchaser will email to gasTrading details of the price it is willing to pay for gas, the Maximum Daily Quantity, and an indication of daily forecast (if not just the Maximum Daily Quantity) signed by its Authorised Signatories. gasTrading will either accept or reject this single page Purchase Confirmation executed by its Authorised Signatories.
The Short Term Gas Trading Agreement is designed for one-off purchasers on the gasTrading Spot Market. This agreement is intended to operate for a single trade (which may be a month). The details of a Purchaser's Offer to Buy will be populated in the agreement, which is then executed by gasTrading and the Purchaser. The administration and volume of paper associated with producing the original form of this agreement each month, for each sale, gave rise to the Purchase Confirmation form of agreement.
The Gas Trading Agreement - Firm Delivery is designed for parties seeking a Firm Gas Supply. Purchases are offered a firm supply with one or more Sellers agreeing to underwrite the gas volume. The agreement operates on the premise that the Purchaser is indifferent on who actually supplies the gas provided the gas is supplied when required. In this agreement gasTrading is appointed as agent, for Firm Sellers who underwrite a quantity of Firm Gas Supply and with non-firm Sellers who may supply gas as required. Sellers under this arrangement have the flexibility that, should they wish not to supply gas on a particular day, or for a period, gasTrading may substitute gas supplied from the non-firm Sellers. However, if no non-firm Sellers have gas available, the Firm Seller is obliged to supply its Underwritten Quantity of gas. Similarly, if a Purchaser is unable to take all the gas it has agreed to purchase it is required to pay for that gas but, gasTrading will, if the Purchaser requests, seamlessly deliver that surplus gas into the Spot Market.
The Sale Agency Agreement is used by the Seller to appoint gasTrading as its agent for the purpose of selling gas, either on the Spot Market or into a Firm Gas Supply. The Sale Agency Agreement is also an umbrella agreement.
Under the Sale Agency Agreement, the Seller invites gasTrading to put before it all available sales and gasTrading undertakes to offer the Seller an opportunity to participate in all available sales. The Sale Agency Agreement sets out the rights and responsibilities of the parties up to the point that a Seller elects to participate in a sale and from that point on. When the Seller agrees to enter into a sale(s) (based on a Gas Supply Agreement) the Seller appoints gasTrading as its agent for the purpose of that sale(s) only. A Seller is not obliged to sell gas to any purchaser or to accept any price. A Seller may elect to sell to only certain purchasers and, or to sell within a specific price range.
The standard form agreements are available to parties interested in participating upon execution of a confidentiality agreement. Please Contact Us if you are a Bona fide party wishing to review gasTrading's standard form agreements.