Gsa Gas Supply Agreement...




futures contracts that provide for the sale and purchase of gas for a fixed period and are generally considered to be short-term (one to five years) or long-term (often 20 years, but much longer); The content and impact of a gas supply agreement (GSA) in a conventional gas-electricity project are well understood. However, the situation will necessarily be different if the gas for sale comes from an unconventional source such as a shale gas field. In this context, it is necessary to reconfigure the content of a typical GSA (in fact the entire structure of the project) in order to take into account, in several respects, the specificities of the direct contribution of shale gas as a raw material for electricity generation. The reason for this installation obligation is that it requires the enforcement officer to ensure that facilities essential to the completion of the gas project are developed, made available and maintained as necessary for the implementation of the GSA. This commitment will help to better ensure the likelihood of success of the larger gas project, as all necessary links in the supply chain will (hopefully) be complete if necessary. When it is agreed that a facility obligation will be assumed, several elements will be subject to review. The necessary facilities should be carefully defined within the GSA in order to avoid any further difference of opinion between the parties as to whether the obligation of the facility was actually met by the obligated party. The GSA should determine the extent of a party`s obligations with respect to the necessary facilities. The timetable for the installation and commissioning of certain facilities should be based on interim and/or final dates set for commitments to be met, so that the right of one party to request corrective action for the special service or even the GSA with respect to the other party`s inability to properly discharge its obligations may be terminated. The GSA should also clearly define the completion and preparation review for some facilities and define how this test should be conducted. In the United Kingdom, dependence on localized and flexible electricity generation, with rapid reaction times, has increased, in part because of the increasing dependence on wind generation and intermittency, an inevitable consequence. Attractive premiums are paid for the supply and availability of such a wake-up generation in times of peak electricity demand. Shale gas production could be modulated so that the producer could optimize the use of shale gas and other gas sources (or other fuel sources where dual fuel options can be structured) for electricity generation.

Such a model has been used in the United Kingdom for the marketing of methane (CMM) and coal-based methane (CBM) in coal mines. The production of CMM and CBM is subject to periods of downtime, so it is not sufficient to be the only source of base load for the gas supply of a conventional power plant. The key to the commercialization of SMEs and CBM has been the flexible production of electricity from small and medium local scales, and this technology could also be used for the commercialization of shale gas deposits. Depletion contracts, on the other hand, are based on an unspecified amount of economically recoverable reserves from a designated gas field. A real contract of exhaustion remains for the duration of the field, so that the scope of the agreement is limited by such reserves and not by time. From the buyer`s point of view, an interruption fee would only be acceptable if the buyer is able to switch to an alternative gas source or other fuel supply (if the buyer`s power plant has a dual fuel capacity) or if he can do without gas during the duration of the outage.