β Scribed by Griffin, Paul
No coin nor oath required. For personal study only.
hether gas is bought, sold, and trans-W ported by a pipeline or as LNG, the typical contractual arrangements will be long-term and will include take-or-pay commitments. Where traditionally monopoly markets are liberalizing (for whatever reason) there will often be a tension between long-term contracts put in place to reflect the monopoly model and the development of competition and markets, particularly in distribution and supply. However these issues have been addressed, there are probably two ever-present general questions: "For whose benefit are liberalization measures introduced and pursued?" and "Who will bear the costs that arise in the transition from monopoly structures to liberalized markets?"
Traditionally, oil and gas were both traded on long-term contracts with long-term pricing. Oil has moved to become spot-priced even if the sale and purchase arrangements are longterm. Gas has traditionally been seen as different from oil. However, the example of liberalized markets has shown that gas too can come to be traded at short-term or spot prices. Longterm gas contracts tend to have fixed or ascertainable quantities and may provide for sale or purchase on an exclusive basis. There will often be fixed pricing under which an initially agreed price is adjusted from time to time by reference to the movements in the prices of competing fuels.
These arrangements will come under pressure in those jurisdictions where there is a drive for liberalization of monopoly markets. The move to liberalization tends to be driven by politicians, regulators, or both-and markets will
π SIMILAR VOLUMES
In recent years, lawyers for gas produccrs have been busy filing lawsuits to enforce take-or-pay provisions that piliclines have, in one way or another, unilaterally abrogat cd. Unless the pipeline:< undergo an unexpected sea change-an event that is unlikely in the absence of a dramatic turnaround i
In a series of orders issued on April 28, L.e Federal Energy Regulatory Commission accepted twenty pipeline take-or-pay cost-recovery filings submitted on March 31. Pursuant to the commission's orders, these pipelines will attempt to recover up to 75 percent of some $2 billion in additional take-or-