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Gas Sale and Purchase Agreement template
Gas Sale and Purchase Agreement sample


What is Gas Sale and Purchase Agreement?

Gas Sale and Purchase Agreement A Gas Sale and Purchase Agreement governs the sale and purchase of natural gas, specifying pricing, delivery, quality standards, and dispute resolution mechanisms.



Sample template:



Gas Sale and Purchase Agreement


1. Definitions and Interpretation

1.1. Definitions


In this Agreement, unless expressly stated otherwise or the context requires otherwise, the following terms shall have the meanings respectively set out opposite them:


"Affiliate" "Buyer," "Commencement Date," "Delivery Point," "Dispute," "Force Majeure," "Natural Gas," "Party," "Pricing," "Seller," "Term," "United States laws," and "USD" shall have the meanings specified in this Agreement.



2. Sale and Purchase of Natural Gas

Subject to the terms and conditions of this Agreement, Seller agrees to sell, and Buyer agrees to purchase and accept delivery of the Natural Gas for the duration of the Term and at the Delivery Point.



3. Quantity and Delivery

3.1. Quantity


The quantity of the Natural Gas to be sold and purchased under this Agreement shall be as agreed upon by the Parties from time to time, provided that the quantity shall not exceed the agreed maximum daily and annual quantities specified in this Agreement.


3.2. Delivery Point


Delivery of the Natural Gas by the Seller and receipt of the Natural Gas by the Buyer shall be deemed to have occurred when the Natural Gas passes the Delivery Point.


3.3. Title and Risk


Title to and risk of loss and damage to the Natural Gas shall transfer from the Seller to the Buyer at the Delivery Point.



4. Quality and Measurement

4.1. Quality


Natural Gas delivered under this Agreement shall meet the quality standards specified in the specifications attached hereto as Annex A. The Buyer may refuse any delivery that does not meet these specifications.


4.2. Measurement


Natural Gas delivered under this Agreement shall be measured in accordance with standard industry practice in effect at the time of measurement.


4.3. Testing


Each Party shall have the right to be present or represented during any measurement and testing of the Natural Gas.



5. Price and Payment

5.1. Pricing


The price in USD paid by the Buyer for the Natural Gas shall be calculated on the basis of the pricing mechanism specified in Annex B to this Agreement, and the payment is due in full within thirty (30) days of invoice date.


5.2. Invoicing


At the end of each calendar month, the Seller shall render to the Buyer an invoice in USD setting forth the quantity of Natural Gas delivered in that month, the price, and any applicable taxes.


5.3. Interest on Late Payments


If the Buyer fails to pay any amount when due, Buyer shall pay interest on the overdue amount at the rate of the prime rate published by the Wall Street Journal plus two percent (2%) compounded monthly, from the due date until the date of full payment.



6. Force Majeure

6.1. Definition of Force Majeure


For the purposes of this Agreement, "Force Majeure" means any event or circumstance beyond the reasonable control of either Party, and which could not have been prevented or overcome by the exercise of reasonable diligence, and which prevents the performance of any obligation under this Agreement.


6.2. Notice and Relief


A Party affected by Force Majeure shall promptly notify the other Party in writing, and subject to such notification, the affected Party shall be relieved from its obligations under this Agreement to the extent and for the duration of the Force Majeure event.



7. Term and Termination

7.1. Term


This Agreement shall commence on the Commencement Date and shall continue in force and effect for a period of five (5) years, unless earlier terminated in accordance with the provisions of this Agreement.


7.2. Termination for Cause


Either Party may terminate this Agreement immediately by written notice to the other Party if the other Party has materially breached any of its obligations under this Agreement and has not remedied or taken steps to remedy such breach within thirty (30) days of receiving written notice of such breach from the non-defaulting Party.



8. Dispute Resolution

8.1. Negotiation


Any Dispute that arises under or in connection with this Agreement shall first be dealt with through good faith negotiations between the Parties, which shall commence within ten (10) days of a Party's written notice to the other Party of its intention to negotiate and shall continue for a period of thirty (30) days or such longer period as the Parties may agree in writing.


8.2. Arbitration


If the Parties are unable to resolve the Dispute during the negotiation period, the Dispute shall be referred to and finally resolved by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.



9. Governing Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of the United States without regard to its conflicts of laws principles. The Parties irrevocably submit to the jurisdiction of the United States courts for the enforcement of any award rendered in accordance with this Agreement.



10. Miscellaneous

10.1. Amendment


This Agreement may be amended only in writing and signed by both Parties.


10.2. Notices


All notices, requests, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given and received when delivered personally or by an internationally recognized overnight courier service, or three (3) days after being mailed by certified or registered mail, postage prepaid, return receipt requested, to the Parties at their respective addresses specified in this Agreement or at such other address as may be designated in writing by the other Party.


10.3. Assignment


Neither Party may assign or transfer its rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned, or delayed.


10.4. Entire Agreement


This Agreement, together with its Annexes, contains the entire understanding of the Parties with respect to its subject matter and supersedes all prior and contemporaneous agreements and understandings, whether oral or written, relating to the subject matter of this Agreement.


10.5. Counterparts


This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.



[Signatures of the Parties]

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Main Sections of a Gas Sale and Purchase Agreement


In this Gas Sale and Purchase Agreement, you will see the following sections:

  1. Definitions and Interpretation
  2. Sale and Purchase of Natural Gas
  3. Quantity and Delivery
  4. Quality and Measurement
  5. Price and Payment
  6. Force Majeure
  7. Term and Termination
  8. Dispute Resolution
  9. Governing Law and Jurisdiction
  10. Miscellaneous


About each Section - Analysis and Summary:

  1. Definitions and Interpretation: This section explains the meaning of specific terms used throughout the agreement, such as "Buyer," "Seller," "Natural Gas," and "Force Majeure." Think of it as a glossary to help you understand the language used in the agreement.

  2. Sale and Purchase of Natural Gas: This section outlines the core purpose of the agreement, which is for the Seller to sell and the Buyer to purchase natural gas. It's like a handshake between the two parties, agreeing to do business together under the terms of this agreement.

  3. Quantity and Delivery: This section specifies how much natural gas will be sold and purchased, as well as where and when it will be delivered. It also explains when the title and risk of the natural gas transfer from the Seller to the Buyer. Imagine it as a set of instructions for a delivery driver, telling them where to pick up the goods, where to drop them off, and who is responsible for them during the journey.

  4. Quality and Measurement: This section sets the quality standards for the natural gas being sold and outlines how it will be measured. It also explains the rights of both parties to be present during the measurement and testing of the gas. Think of it as a quality control process to ensure both parties are satisfied with the product being exchanged.

  5. Price and Payment: This section explains how the price of the natural gas will be calculated, when payments are due, and the process for invoicing and late payments. It's like a guide for the Buyer on how much they need to pay, when, and how to avoid any penalties for late payments.

  6. Force Majeure: This section defines what constitutes a "Force Majeure" event (an event beyond the control of either party) and explains the process for notifying the other party and seeking relief from obligations during such an event. It's like an escape clause for both parties in case something unexpected and uncontrollable happens that prevents them from fulfilling their obligations under the agreement.

  7. Term and Termination: This section outlines the duration of the agreement and the conditions under which it can be terminated early. It's like a timeline for the agreement, showing when it starts, when it ends, and how it can be cut short if necessary.

  8. Dispute Resolution: This section explains the process for resolving any disputes that may arise between the parties during the course of the agreement. It sets out a step-by-step process for negotiation and, if necessary, arbitration. Think of it as a roadmap for resolving disagreements and keeping the business relationship on track.

  9. Governing Law and Jurisdiction: This section specifies which country's laws will govern the agreement and which courts will have jurisdiction over any disputes. It's like a rulebook that both parties agree to follow in case of any legal issues.

  10. Miscellaneous: This section covers various additional topics, such as how the agreement can be amended, how notices should be delivered, and whether either party can assign their rights or obligations under the agreement. It's like a collection of housekeeping items to ensure the smooth operation of the agreement.

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