Arizona Natural Gas Inventory Forward Sale Contract refers to a financial agreement specifically designed for the buying and selling of natural gas inventory in Arizona. It is a legally binding contract executed between two parties: the buyer and the seller. This contract enables the buyer to secure a future supply of natural gas, while the seller locks in the sale of their inventory at a predetermined price, ensuring stability and minimizing the risk of price fluctuations. The Arizona Natural Gas Inventory Forward Sale Contract is an essential tool for energy companies, industrial consumers, and other stakeholders involved in the natural gas industry. It provides a mechanism to manage future supply and demand risks effectively, allowing parties to hedge against adverse price movements and stabilize their energy costs. This contract is well-suited for individuals or businesses with long-term energy needs who want to ensure a consistent supply of natural gas and protect against price volatility. Different types of Arizona Natural Gas Inventory Forward Sale Contracts may include: 1. Fixed-Price Contracts: These contracts allow buyers and sellers to establish a predetermined price for the natural gas inventory to be delivered at a specific date in the future. This provides price certainty and protection against market fluctuations. 2. Index-Price Contracts: In this type of contract, the price of natural gas is tied to an industry index, such as the Henry Hub Natural Gas Spot Price. The contract's value will fluctuate based on changes in the index price, providing exposure to market dynamics while still offering some level of price predictability. 3. Swing Contracts: Swing contracts offer flexibility to buyers by allowing them to adjust the volume of natural gas they require within a specified range during the contract's duration. This type of contract is suitable for customers with fluctuating or uncertain demand patterns. 4. Basis Contracts: Basis contracts provide a mechanism to reflect regional price differentials between the delivery point in Arizona and the reference natural gas market hub. By utilizing basis differentials, buyers and sellers can manage local market risks and ensure the contract is reflective of regional price dynamics. Overall, Arizona Natural Gas Inventory Forward Sale Contracts play a crucial role in managing price risk, securing natural gas supply, and providing stability to participants in the Arizona natural gas market. They allow buyers and sellers to plan ahead, mitigate uncertainty, and protect against future energy price volatility.
Arizona Natural Gas Inventory Forward Sale Contract
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?interruptible capacity?: an extreme form non-firm capacity whose availability is not guaranteed in any way by the natural gas undertaking. ?available firm capacity?: the part of the technical capacity that is not allocated and is still available to the system users at that moment.
Under interruptible contracts, customers are not required to pay any fixed minimum amounts, but are instead billed based on actual volume of service provided for any given period. Payment for services under these contracts are typically due the month after the services have been performed.
Under these contracts, the flow of natural gas to a power plant may be stopped or curtailed if firm contract holders use the available capacity or if other interruptible customers outbid the power plant. These contracts are generally set up for short periods, often for next-day delivery.
In the first quarter of 2024, we expect natural gas prices to increase, then drop below 2023 prices.
Henry Hub Natural Gas Spot Price is at a current level of 2.63, up from 2.49 the previous market day and down from 6.23 one year ago. This is a change of 5.62% from the previous market day and -57.78% from one year ago.
Firm Gas means Natural Gas purchased by Owner on behalf of the Project (with the consent of Millennium) under contracts where the supply and delivery of Natural Gas is on an uninterruptible basis.
Firm Transportation means the provision of natural gas pipeline transportation that is not subject to a prior claim by another pipeline customer or another class of transportation service and cannot be interrupted except in a situation of force majeure.
Firm contracts and interruptible contracts are two broad types of contracts for purchasing natural gas, although the legal obligations for delivering natural gas between a fuel supplier and a natural gas-fired power plant can vary, depending on their specific agreements.