Delaware Gas Storage Agreement

• Category: Oil Gas and Minerals - Agreements
• State: Multi-State
• Control #: US-OG-723
• Format: Word; Rich Text

Description

This form is used when Owner owns and operates underground gas storage facilities and Customer desires storage service for natural gas to serve its Plant, and Owner is willing to render such storage services. Title: Understanding Delaware Gas Storage Agreement: Types, Uses, and Key Terms Introduction: The Delaware Gas Storage Agreement refers to a legally binding contract that outlines the terms and conditions for storing natural gas in underground storage facilities located within the state of Delaware. This agreement is crucial for both gas storage operators and customers, as it establishes the rights, responsibilities, and obligations of the parties involved. In this article, we will explore the types of Delaware Gas Storage Agreements and highlight their significance in the gas storage industry. 1. Types of Delaware Gas Storage Agreements: a) Firm Storage Agreement: A Firm Storage Agreement guarantees customers an assured, uninterrupted supply of stored natural gas during the agreed-upon withdrawal period. Customers pay a premium for this assured capacity, ensuring priority access to stored gas. b) Interruptible Storage Agreement: An Interruptible Storage Agreement offers customers access to stored natural gas only during periods of excess capacity or low demand. This agreement does not guarantee uninterrupted access and is usually priced lower than the firm storage agreement. 2. Key Elements and Terms: a) Capacity Entitlement: Refers to the volume of natural gas storage capacity allotted to a customer under the agreement. The capacity entitlement depends on the contract type and may be given in terms of volume (cubic feet) or through injection/withdrawal rates (Matúš per day). b) Injection & Withdrawal Rights: Defines the terms and conditions for injection and withdrawal of natural gas, including limitations, timelines, and procedures to follow. c) Contract Term: Specifies the duration of the agreement, ranging from short-term (months) to long-term (years). Parties may negotiate renewal and termination terms. d) Pricing and Payment: Details the agreed-upon rates for storage services, including capacity reservation charges, injection/withdrawal fees, imbalance charges, and other relevant costs. e) Force Mature: Outlines circumstances (e.g., natural disasters, strikes, or emergencies) that may exempt the parties from fulfilling their obligations under extreme conditions. f) Confidentiality: Establishes rules regarding the confidentiality and protection of sensitive information exchanged between parties during the agreement's term. 3. Importance and Applications: Delaware Gas Storage Agreements are vital for various stakeholders, including: a) Producers: Allows natural gas producers to store excess production during periods of low demand, ensuring the availability of supply during peak periods. b) Local Distribution Companies (LDCs): Ensures reliable supply, allowing LDCs to fulfill customer demands, particularly during times of high demand, such as winter months. c) Industrial Consumers: Enables industrial consumers to maintain a stable supply of natural gas for their operations, ensuring uninterrupted production and reducing operational risks. d) Pipelines Operators: Helps pipeline operators balance their systems by storing natural gas during low-demand periods and injecting it back during high-demand periods, maintaining system integrity. Conclusion: Delaware Gas Storage Agreements play a crucial role in the gas storage industry, providing operators and customers with a legally binding framework for efficient and reliable natural gas storage services. By understanding the different types, key elements, and terms associated with these agreements, stakeholders can effectively manage their gas storage needs, ensuring uninterrupted supply when required.

Title: Understanding Delaware Gas Storage Agreement: Types, Uses, and Key Terms Introduction: The Delaware Gas Storage Agreement refers to a legally binding contract that outlines the terms and conditions for storing natural gas in underground storage facilities located within the state of Delaware. This agreement is crucial for both gas storage operators and customers, as it establishes the rights, responsibilities, and obligations of the parties involved. In this article, we will explore the types of Delaware Gas Storage Agreements and highlight their significance in the gas storage industry. 1. Types of Delaware Gas Storage Agreements: a) Firm Storage Agreement: A Firm Storage Agreement guarantees customers an assured, uninterrupted supply of stored natural gas during the agreed-upon withdrawal period. Customers pay a premium for this assured capacity, ensuring priority access to stored gas. b) Interruptible Storage Agreement: An Interruptible Storage Agreement offers customers access to stored natural gas only during periods of excess capacity or low demand. This agreement does not guarantee uninterrupted access and is usually priced lower than the firm storage agreement. 2. Key Elements and Terms: a) Capacity Entitlement: Refers to the volume of natural gas storage capacity allotted to a customer under the agreement. The capacity entitlement depends on the contract type and may be given in terms of volume (cubic feet) or through injection/withdrawal rates (Matúš per day). b) Injection & Withdrawal Rights: Defines the terms and conditions for injection and withdrawal of natural gas, including limitations, timelines, and procedures to follow. c) Contract Term: Specifies the duration of the agreement, ranging from short-term (months) to long-term (years). Parties may negotiate renewal and termination terms. d) Pricing and Payment: Details the agreed-upon rates for storage services, including capacity reservation charges, injection/withdrawal fees, imbalance charges, and other relevant costs. e) Force Mature: Outlines circumstances (e.g., natural disasters, strikes, or emergencies) that may exempt the parties from fulfilling their obligations under extreme conditions. f) Confidentiality: Establishes rules regarding the confidentiality and protection of sensitive information exchanged between parties during the agreement's term. 3. Importance and Applications: Delaware Gas Storage Agreements are vital for various stakeholders, including: a) Producers: Allows natural gas producers to store excess production during periods of low demand, ensuring the availability of supply during peak periods. b) Local Distribution Companies (LDCs): Ensures reliable supply, allowing LDCs to fulfill customer demands, particularly during times of high demand, such as winter months. c) Industrial Consumers: Enables industrial consumers to maintain a stable supply of natural gas for their operations, ensuring uninterrupted production and reducing operational risks. d) Pipelines Operators: Helps pipeline operators balance their systems by storing natural gas during low-demand periods and injecting it back during high-demand periods, maintaining system integrity. Conclusion: Delaware Gas Storage Agreements play a crucial role in the gas storage industry, providing operators and customers with a legally binding framework for efficient and reliable natural gas storage services. By understanding the different types, key elements, and terms associated with these agreements, stakeholders can effectively manage their gas storage needs, ensuring uninterrupted supply when required.