GUIDANCE NOTES TO AIPN MODEL FORM GAS SALES ... - …rather than on the basis of discrete lifings, such as in an LNG sales contract. For this reason the Model GSA is not intended to

Approved on March 29, 2006

GUIDANCE NOTES TO

AIPN MODEL FORM

GAS SALES AGREEMENT

DISCLAIMER

This model form has been prepared only as a suggested guide and may not contain all of the provisions that may be required by the parties to an actual agreement. The provisions of the model form do not necessarily represent the views of the Association of International Petroleum Negotiators (“AIPN”) or any of its members. Use of this model form or any portion or variation of this model shall be at the sole discretion and risk of the user parties. Users of the model form or any variation of this model are encouraged to seek the advice of qualified legal counsel to ensure that the final document reflects the actual agreement of the parties. The AIPN disclaims any and all interests or liability whatsoever for loss or damages that may result from use of this model form or portions or variations of this model. All logos and references to the AIPN must be removed from this model form when used as an actual agreement. © 2006 AIPN.

Model GSA 06-02-17 notes


General Guidance Note:

The Model Gas Sales Agreement (“GSA”) is not set up to be a Seller’s draft or a Buyer’s draft document. The Model GSA is set up to present a document providing the drafterswith alternatives and options to balance the rights and duties of a Seller and those of a Buyer. The Model GSA provides for sales of gas on the basis of continuous deliveries rather than on the basis of discrete lif ings, such as in an LNG sales contract. For this reason the Model GSA is not intended to be used for the sale of LNG. However the Model GSA could be used for the sale of Gas to an LNG liquefaction facility. Users of the Model GSA may wish to use the Powerpoint presentation of the Model GSA in order to get asummary or overview of the layout and function model form.

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Some of the principles in the Model GSA are:

Definitions for both English system and Metric system units of measurement are provided so that the Parties may decide to use either system.

The key dates and sequence of periods in the Model GSA are as follows and see the timeline at the end of this general guidance note for a graphical representation:

The Effective Date is the date on which the gas sales agreement between the Parties issigned, and becomes enforceable subject to satisfaction of the Conditions Precedent.

The Initial Delivery Date is the date on which Gas first begins to flow for the commissioning of facilities.

The Commissioning Period begins on the Initial Delivery Date and ends on the completion of commissioning of the later of Seller’s Facilities and Buyer’s Facilities. As such the Commissioning Period is the period of time actually required to complete the commissioning process.

The Start Date is the date on which Seller’s obligation to make Gas available and Buyer’s obligation to take Gas begins. In ideal circumstances the Start Date is the Day following the end of the Commissioning Period. As a practical mat er the Parties may want to have a long stop date on which the obligations become firm regardless of whether commissioning is completed. As such there is an alternative in the definition.

The Delivery Period consists of the Build-Up Period, the Plateau Period, and if applicablethe Decline Period, and any Extension Period. The Delivery Period is the period during which Seller has an obligation to make Gas available and Buyer has an obligation to take Gas.

Model GSA 06-02-17 notes 1


The Build-Up Period begins on the Start Date and in general ends when the deliverieshave increased and stabilized at the Daily Contract Quantity (“

DCQ”). As a practical

matter the Parties may want to have a long-stop date on which the obligations to make available and take the DCQ become firm regardless of whether the ramp up has been completed. As such there is an alternative in the definition.

The Plateau Period begins on the Day following the end of the Build-Up Period and endswhen the total contract quantity has been delivered or when Seller’s field is no longer capable of making the maximum DCQ (“

MaxDCQ”) available on a stable basis. Note that typically depletion type contracts continue after the Plateau Period through the end of the Decline Period, and that typically supply type contracts continue until a certain quantity is delivered, regardless of the period of the contract.

The Decline Period, if applicable, begins on the date specified in the Decline Notice and ends on cessation of production from Seller’s field.

The Termination Date is the date on wh ch Seller ceases to be bound by its ob gation to make Gas Available and Buyer ceases to be bound by its obligation to take Gas.

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tThe s art of a Day is set up on the basis of any specified time in the time zone where the Delivery Point is located (e.g. 0600 hours local time).

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Delivery DiagramDelivery Diagram

* Commissioning Period can extend beyond the "Start Date", but ideally the Start Date is the Day following the end of the Commissioning Period.

TERM

Delivery Period

Completion of ObligationsDecline PeriodPlateau PeriodBuild-Up PeriodCommissioning PeriodSatisfaction of Conditions Precedent & Construction of Facilities

Effective Date Initial Delivery Date Start Date

Production

Time

Nominations

Deliveries



This Model GSA is determined on the basis of “quantity”, which is energy amount, such as MMBtus or Gigajoules, and not volume, such as cubic feet or cubic meters. The key daily quantity assumptions and formulas in the Model GSA are as follows:

“

The Model GSA is generally predicated on the notion that each Day Buyer will nominate, Seller will make available, and Buyer will take a certain Daily Contract Quantity, known as the DCQ. As such the Model GSA balances and calculates the value of Gas on a daily basis.

Buyer has the right to nominate a quantity for each Day, known as the Properly Nominated Quantity ( PNQ”), within an agreed range of Minimum DCQ (“MinDCQ”) and the Maximum DCQ (“MaxDCQ”) (e.g. 0 PNQ 110% DCQ). Note that in some instances, such as a physical requirement of Seller’s facilities or the need to base load an infrastructure project, the Parties may need to specify a Minimum DCQ (“

≤ ≤

MinDCQ”) in excess of zero(e.g. 50% DCQ PNQ 110% DCQ).

≤ ≤

Because a Buyer must take what it nominates, setting the MinDCQ > 0 and requiring Buyer to nominate at least the MinDCQ fundamentally changes the Parties’ negotiated agreement from a financially based transaction to a physically based transaction. Where the underlying rationale requiring Buyer to nominate and take the MinDCQ is based on the need for a minimum base load or throughput, liquidated damages (such as for ShortfallQuantity (“SFQ”)) may not be an adequate remedy. The failure to nominate and take the MinDCQ may constitute a material breach of the Parties’ negotiated agreement and theParties may wish to consider consequential damages or termination.

Seller has the obligation to make available a quantity of Gas within an agreed tolerance of the PNQ (Delivery Tolerance Quantity (“DTQ”) = __% x PNQ) (e.g. DTQ = 3% x PNQ)),and Buyer has the obligation to take the quantity of Gas made available. For deliveries above MaxDCQ a tolerance also applies; however, this tolerance is limited to the agreedpercentage (e.g. 3%) of MaxDCQ. For example, if Buyer nominates MaxDCQ and in addition notifies Seller of an Excess Requested Quantity (“

ERQ”) and Seller delivers more than MaxDCQ + ERQ but not more than MaxDCQ + ERQ + 3%*MaxDCQ, then Seller hasdelivered within the tolerance. Hence, there is no over-delivery. For deliveries above MaxDCQ + ERQ + 3%*MaxDCQ the over-delivery is DAQ – (MaxDCQ + ERQ + 3%*MaxDCQ).

If Seller makes available and Buyer takes the PNQ within the agreed tolerance, then the predicate notion is fulfilled and compensation, without any adjustment, will be invoiced and paid on a monthly basis. The quantity that Seller actually makes available and that Buyer actually takes is the Daily Actual Quantity (“DAQ”).

If Seller makes available a quantity smaller than the PNQ - DTQ, then the difference isthe Shortfall Quantity (“

SFQ” ) = (PNQ – DTQ) - DAQ . The compensation in relation to

the SFQ is handled on a monthly basis through a price adjustment, an offset against Over-Delivery Quantity (“ODQ”) or another agreed mechanism. In addition the ∑SFQ during



each year is subtracted from the ∑DCQ in determining the Adjusted Annual Contract Quantity (“AdjACQ”) because Buyer could not take a quantity that was not made available.

If Seller makes available a quantity more than the PNQ + DTQ, then the difference is the Over-Delivery Quantity (“ODQ” = DAQ – (PNQ + DTQ)). Buyer has the right, but not the obligation, to take any quantity more than PNQ + DTQ. The compensation in relation for ODQ is handled on a monthly basis through a price adjustment, an offset against SFQ or another agreed mechanism. In addition ∑ODQ during each year is included in Actual Annual Quantity taken (“AAQ”) because the quantity was made available and taken.

If Buyer requests Seller to make available a quantity more than the MaxDCQ (Excess Requested Quanti y (“t ERQ”)) and Seller does so, then Buyer has an obligation to take such Excess Gas Quantity (“EGQ” = DAQ – (MaxDCQ + DTQ), if (MaxDCQ + DTQ) < DAQ (MaxDCQ + DTQ + ERQ)). The compensation for EGQ is invoiced and paid on a monthlybasis. The Model GSA is drafted so that the ∑EGQ during each year will be subtracted from the Annual Actual Quantity (“

≤

AAQ”) for the computation of Buyer’s Annual Deficiency Quantity (“BADQ”) and Buyer’s Annual Surplus Quantity (“BASQ”), if any. The Parties may wish o consider whe her they prefer to include Excess Gas Quantities forthe purposes of computing the BADQ and the BASQ.

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The key annual quantity assumptions and formulas in the Model GSA are as follows:

AAQ = Annual Actual Quantity of Gas taken.

AdjACQ = ∑DCQ - ∑SMQ - ∑FMQ - ∑SFQ - OFC

Where:

∑DCQ (Daily Contract Quantity) = sum of DCQ for all Days of year, regardless of whether and how much Gas was actually properly nominated, delivered or taken.

∑SMQ (Scheduled Maintenance Quantity) = ∑ (DCQ – DCQsm);

∑FMQ (Force Majeure Quantity = ∑ (PNQFM – DTQ) - DAQFM;

∑SFQ (Shortfall Quantity) = ∑ (PNQ – DTQ – DAQ); and

The Par ies may want to include he Operational Flexibility Credit (“OFC” ∑ (DCQ x # OF Days)) to provide for operational flexibility arising from actions of third parties (such as for maintenance of Buyer’s offtaker’s facilities).

In the Model GSA Buyer has a financial obligation to pay for a certain quantity regardless of whether Buyer physically takes such Take or Pay Quantity (“TOPQ” =(__% x AdjACQ (e.g. 80% AdjACQ))).

If during a year Buyer takes a total quantity, excluding EGQ, (AAQ ∑EGQ) > TOPQ, then there is no accumula ion of BADQ or BASQ, and no application of MUA as MUQ or of CFA as CFCQ.

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If the carry forward option is selected,



If during a year Buyer takes a total quantity (excluding EGQ and MUQ applied during such year) > AdjACQ, then such difference will be designated as Buyer’s Annual Surplus Quantity (“BASQ” = AAQ - ∑EGQ - ∑MUQ – AdjACQ) The BASQ is ca cu ated on anannual basis and the BASQ for each year will be aggregated with the BASQ, if any, from prior years to determine the Carry Forward Aggregate (“

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CFA”). If during a subsequentyear Buyer takes a total quantity (excluding EGQ) < TOPQ, then all or a portion of the CFA may be applied as a Carry Forward Credit Quantity (“

CFCQ”) to reduce the amount of BADQ in the calculation of BDP within limits agreed by the parties. The CFA will be reduced by the amount of any CFCQ applied to reduce BADQ and any CFA that has expired (CFA = ∑BASQ - ∑CFCQ – ∑ExpCFA).

Article 27.13: The Entirety Provision may need to be revised to reflect guarantees.

If during any Day Seller makes available a quantity of Gas which does not conform to the Quality Specifications, then such quantity is referred to as an Off-Specification Quantity (“

OSQ”).

Because on any given Day the Daily Actual Quantity (“DAQ”) may be comprised of morethan one type of quantity (i.e. SFQ, PNQ, EGQ, ODQ, OSQ and/or MUQ) and because the price corresponding o each type of quantity may be different, Article 16 has been inserted to provide a decision tree to facilitate determining the amount of each type comprising the DAQ on such Day. The major branches of the decision tree in Article 16 are set out below:

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Article 16.2No OSQ & No MUQ

16.2.4

(PNQ – DTQ) PNQ (PNQ + DTQ)

16.2.1

ERQ=016.2.3

ERQ>016.2.2.1

ERQ>016.2.2.2

(Max DCQ + DTQ) (Max DCQ + DTQ+ ERQ)

Article 16.3MUQ but No OSQ

16.3.4


16.3.1

ERQ=016.3.3

ERQ>016.3.2.1

ERQ>016.3.2.2




Article 16.4OSQ but No MUQ

16.4.4


16.4.1

ERQ=016.4.3

ERQ>016.4.2.1

ERQ>016.4.2.2


Article 16.5OSQ & MUQ

16.5.4


16.5.1

ERQ=016.5.3

ERQ>016.5.2.1

ERQ>016.5.2.2


The Model GSA is prepared in two versions: a PDF file version and a MSWord file version.

In the PDF file version of the Model GSA there are guidance notes embedded in the text of the Agreement. In general the provision to which each guidance note pertains followsimmediately after such guidance note. The guidance notes are intended as an aid to use IN DRAFTING, NOT IN INTERPRETATION, and should not be included in the final signed version of the gas sales agreement.

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In the MSWord version of the Model GSA there are no guidance notes embedded in the text and is intended to be electronically modified to fit the Parties circumstances.

In the Model GSA there are numerous Alternatives and Options. Alterna ives are intended to indicate a typical range of conditions or consequences for a particular provision, and an alternative must be chosen. Options are intended to indicate a particular provision that could be included but is not required. There can be alternatives that apply to a particular option. Through a careful selec ion of such Alternatives and Options the user has great flexibility to prepare a gas sales agreement that fits the user’s specificsitua ion.

In the Model GSA formulas are used extensively to calculate quantities under differingconditions, prices and amounts due. The formulas provide greater precision than words in determining individual quantity and quality calculations, fulfillment of conditions, as well as the interactions and effects of individual calculations. Formulas also translate more accurately than text, and reduce the possibility of misunderstanding of the ope ation of a provision. However, formulas require willingness of all participants in the negotiation process and users of the final agreement to take the time to understand the formulas and comprehend their implications and interactions. The formulas used in the Model GSA are not higher math. The formulas are algebraic expressions using addition, subtraction, multiplication and division.



In each provision in which a formula occurs descriptive text has been inserted to facilitate understanding of such formula. The user should note that in nearly all cases the descriptive text is less precise than the corresponding formula. As a consequence formulas control over their corresponding descriptive text.

While the user is encouraged to modify any provision of the Model GSA to adapt the model to the user’s circumstances, the user needs to be careful to follow all of the consequences of changing any formula or the corresponding text through each provision of the ModelGSA where the modified concept is used.

For the preparer of a gas sales agreement the style template used in the MSWord version of the Model GSA is as follows:

Body Text, Comment - shortcut = ctrl+alt+/ Normal shortcut = ctrl+alt+n

Header Footer

TITLE

SUB-TITLE ToC 1 - Insert - Reference - Index and Tables – ToC w/ 2 levels

ToC 2

ALTERNATIVES AND OPTIONS = CTRL+ALT+’

Section 1 Heading 1 - shortcut = ctrl+alt+1 1.1 Heading 2 - shortcut = ctrl+alt+2

Body Text - shortcut = ctrl+alt+m

1.1.1 Heading 3 - shortcut = ctrl+alt+3

Body Text Indent - shortcut = ctrl+alt+g

(a) Heading 4 - shortcut = ctrl+alt+4

Body Text Indent 2 - shortcut = ctrl+alt+h

(1) Heading 5 - shortcut = ctrl+alt+5

Body Text Indent 3 - shortcut = ctrl+alt+j

(A) Heading 6 - shortcut = ctrl+alt+6

Body Text Indent 4 - shortcut = ctrl+alt+k

List Bullet - shortcut = ctrl+alt+,



Preamble: This Model GSA is drafted as though there are only two Parties. If Seller and/or Buyer is comprised of multiple entities, then the Parties must determine whetherall such entities should sign the Agreement (including making an allocation of risk and liability as among such entities) or whether an agent for the entities comprising that Party should sign the Agreement, and, if so, whether the agency arrangement should be an attachmen to this Agreement. Also, if the Parties do not have a current right to sell or buy Gas then the acquisition of that right should be included as a Condition Precedent.

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Article 1.1: In the preparation of this Model GSA all defined terms are included in Article 1.1 for ease of reference. If he Parties are concerned that as a matter of drafting, “operational provisions” should not be in definitions, then the Parties may wish to consider restructuring the Agreement to move such “operational provisions” out of the definitionsand into an appropriate portion of the main body of the Agreement and inserting a crossreference to the appropriate section in lieu of the definition.

AdjACQ Alternative 2: Use this alternative where the Parties select the option to allowoperational flexibility under Article 9.2.1.4.

Definition for “Alternative Delivery Point : If the Parties elect to have alternate delive y points, the agreement must be modified to specify the location of such alternate delivery points and the conditions and limitations for such alternative delivery points.

Definition for “Approval”: The Parties should understand what Approvals (including all host government consents and approvals) are necessary and by what dates they must be obtained. Rather than specifying a single date, there may be multiple dates if Approvals will be obtained in phases, and the Parties may want to provide in the Agreement a list of anticipated Approvals and the applicable date by which each must be obtained. In addition, the Parties may wish to provide for an additional requirement that copies of certain Approvals and applications for such Approvals be provided or made available to the other Party.

Definition for “Base Price : The Base Price is set at the outset and remains unchanged throughout the term of the Agreement.

Definition for “BCM”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish system of measurement, then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.



Definition for “Btu”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

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Definition for “BASQ”: To be selected if the Parties wish to use the option for Carry Forward Credit.

Definition for “Buyer’s Facilities”: The Parties May wish to insert in an attachment a detailed description of pipeline, storage facility, generation, liquefaction, manufacturing or other plant, together with related measurement equipment and appurtenant facilities, owned and operated by or on behalf of Buyer downstream of the Delivery Point. The Parties should carefully consider how to define the facilities for the purposes of Conditions Precedent and Force Majeure under this Agreement.

Definition for “CFA”: To be selected if the Parties wish to use the option for Carry Forward Credit.

Definition for “CFCQ”: In certain circumstances it may be appropriate for Buyer to have the ability to reduce i s take or pay obligations in a given year by offsetting any quantities of gas that Buyer has purchased in excess of the AdjACQ in previous years. The Carry Forward Aggregate represents the accumulated BASQ. The notion of Carry Forward isoften seen as a way of “softening” the take or pay obligation. However, where Seller isprepared to allow Buyer to use accumulated Carry Forward Aggregate, Seller may still wish to limit the extent to which Buyer can reduce its take or pay commitments in any givenContrac Year. Two of the methods often adopted are limiting the number of years during which the Carry Forward Aggregate may accrue (i.e. 3 years and/or limiting the maximum amount of Carry Forward Aggregate that can be used in any Contract Year (i.e. 20% ofBADQ or ACQ). This is a matter to be negotiated between the Parties.

Definition for “Carry Forward Period”: To be selected if the Parties wish to use the option for Carry Forward Credit.

Definition for “Change in Laws”: The Parties may wish to delete or modify some of the following aspects of possible changes in law in light of the circumstances in which their Agreement will function, the applicability of the force majeure provision and the price adjustment provision to the circumstances.



Definition for “CP”: The Parties must agree to the period of time between Review Months during which each determination of the Con ract Price is in effect and the specific uni of currency to be used in their Agreement.

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Definition for “Control”: Under circumstances involving dealings among related entities, the Parties may want to set the level of “Control” at a percentage lower than fifty percent (50%).

Definition for “CF”: The Parties must agree the specific units of volume, energy amount,pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another

Definition for “CM”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

Definition for “DCQ”: If Seller is producing from a unitized area, which is subject to determinations of reserves, or if the Parties wish to provide for a mechanism to enableSeller to redetermine the reserves or if the DCQ is a function of the size of the reserves, then the Parties must include the enabling conditions and provisions in this definition.

Alternative 2 of definition for “DCQ”: If there will be significant seasonal variation in deliveries or takes of Gas, then he Parties may wish to specify seasonal DCQ’s in order to reflect these varying requirements during the year.

Option for definition for “DCQ”: The notion of Decline Period is clearly applicable to depletion contracts; however, the Parties should consider whether the notion of DeclinePeriod may be applicable to supply contracts under special circumstances, such as lack ofalternative sources of Gas.

Definition for Delivery Point : The following definition contemplates tha Seller’s Facilities connect directly to Buyer’s Facilities and that the Delivery Point is at the



interconnec ion. If the Parties use a Gas Transporter, the definition of Delivery Pointshould be revised to accurately reflect the intent of the Parties and any facilities plan or diagram should accurately reflect the Gas Transporter’s facilities. Similarly the Parties may need to add a definition for a Redelivery Point, where the Gas Transporter delivers custody of Gas to Buyer.

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Definition for “DTQ”: If the Parties intend to have no delivery tolerance then the Parties should set the percentage or amount to zero (0). The Model GSA is drafted so that theDTQ applies to all Properly Nominated Quantities (including the MinDCQ and MaxDCQ). The Parties may wish to consider whether he DTQ should apply to quantities less than the minimum and more than the maximum quantities and if not then the definitions and provisions referring to the MinDCQ and MaxDCQ should be modified accordingly.

Definition for “EGQ” and “ERQ”: The Model GSA is set up to treat excess Gas as though it is under a separate short term (e.g. spot sales) sales arrangement. As such this ModelGSA excludes excess gas quantities and Excess Requested Quantities from all calculations of AdjACQ and TOPQ, and may be excluded from BADQ, MUQ, CFCQ etc.

Definition for “Force Majeure Event”: The Parties should make sure that they considerhow the Force Majeure provision in their Agreement will operate in conjunction with the Force Majeure provisions of the Parties related granting instruments and other contracts.

First option for definition of “Force Majeure Event”: The Parties may wish to consider whether under the circumstances of the gas sale a Force Majeure Event should include or exclude events which are in the nature of unscheduled outages or repairs.

Second option for definition of “Force Majeure Event”: The Parties may wish to considerwhether under the circumstances of the gas sale a Force Majeure Event should include or exclude events arising from governmental action or inaction.

Fifth option for definition of “Force Majeure Event”: The Parties may wish to considerwhether under the circumstances of the gas sale a Force Majeure Event should include or exclude events which are in the nature of unscheduled outages or repairs.

Sixth option for definition of “Force Majeure Event”: The Parties may wish to consider whether under the circumstances of the gas sale a Force Majeure Event should include or exclude events arising from governmental action or inaction.

Seventh option for definition of Force Majeure Event”: The Parties may wish to consider whether under the circumstances of the gas sale a Force Majeure Event should include or exclude events arising from governmental action or inaction.

Eighth option for definition of “Force Majeure Event : The Parties should reconcile Seller’s standard of commercial conduct contemplated in the context of the definition of “Reasonable Efforts” and the availability of a Force Majeure Event arising from “commercial” circumstances.



Tenth option for definition of “Force Majeure Event”: The Parties should consider whether and to wha extent a third party failure to perform constitutes a Force Majeure Eventunder this Agreement.

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Definition for “Gas Transporter”: The basic concept is that if Seller owns the pipeline tothe delivery point then the pipeline is part of Seller’s Facilities and so the transportation to the de very po nt would be inc uded in the contract price However if the pipeline tothe delivery point is not part of Seller’s Facilities, then Seller must con ract with a third party to transport the gas to the delivery point and the costs of transport would be a separate line item charge under Article 15 and/or 17.

Definition for “GJ”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

Definition for “GHV”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

Definition for “Joule”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.



Definition for “MUQ”: The Parties could agree to allow make-up after the TOPQ is taken. This draft is based on the notion that since TOPQ is a fraction of the AdjACQ it is the Parties’ “worst case” expectation of cash flow. On the other hand the AdjACQ is the Parties “most likely case” expectation of cash flow. As such it seems that allowing make-up after the mos likely case rather than after the worst case was more likely to realize the expectations of the Parties.

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Definition for “MaxDCQ”: The definition of MaxDCQ may be modified to provide for different percentages of DCQ during Build-Up Period, Plateau Period and Decline Period.

Definition for “MCF”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

Definition for “MCM”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

Definition for “MJ”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

Definition for “MinDCQ”: In circumstances where the gas contract is the base load forinfrastructure development there may be a need to have a requirement to physically take a



minimum quantity. If there is a minimum take requirement the definition of MinDCQ should be modified to be either the minimum take quantity for a particular period or the Parties may determine that the MinDCQ should also fluctuate as a percentage of the applicable DCQ. This definition should only be inserted if the Parties elect to include the provisions relating to minimum nominations and/or minimum takes, which is an optional clause that requires Buyer to nominate and physically take a specified minimum quantityfor each specified period (e.g. Day, Month) during the Delivery Period. If this clause is to be included, and if the obligation is to be other than a daily obligation, the Parties should insert, in the defined term, the period for which such obligation applies. The Parties may also want to consider hav ng separate or additional consequences for Buyer’s failure to take the Minimum Daily Contract Quantity.

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Definition for “MMBtu”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify the English system of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then theapplicable units would be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another par . Another example, do not use cubic feet for volume amount and cubic meters in anotherpart.

Definition for “MMCFD”: The Parties mus agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify the English system of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then theapplicable units would be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement o of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another par . Another example, do not use cubic feet for volume amount and cubic meters in anotherpart.

Definition for “MMCMD”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify the English system of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then theapplicable units would be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement o of volume measurement or of pressure measurement in



their Agreement. For example, do not use Btus in one part and gigajoules in another par . Another example, do not use cubic feet for volume amount and cubic meters in anotherpart.

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Alternative 1 of definition for “Natural Gas”: For use where Gas to be made available isonly associated gas.

Alternative 2 of definition for “Natural Gas”: For use where Gas to be made available isboth associated and non-associated gas

Alternative 3 of definition for “Natural Gas”: For use where Gas to be made available isonly non-associated gas

Definition for “Newton”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify the English system of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then theapplicable units would be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another par . Another example, do not use cubic feet for volume amount and cubic meters in anotherpart.

Definition for “OFC”: Buyer may wish to have additional operational flexibility for scheduled third party events which will affect Buyer’s ability to take Gas, such as maintenance for Buyer’s offtaker’s facilities.

Definition for Pascal : The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify the English system of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then theapplicable units would be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another par . Another example, do not use cubic feet for volume amount and cubic meters in anotherpart.

Definition for “Proper Nomination”: In Article 10 Proper Nominations are defined for quantities not less than the MinDCQ and not more than the MaxDCQ.

Definition for “PSIG”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume,



pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

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Definition for “Seller’s Facilities”: The Parties may wish to inser in an attachment a detailed description of wells, platforms, pipeline, storage facili y, compression or other plant, toge her with related measurement equipment and appurtenant facilities, owned and operated by or on behalf of Se ler upstream of the De ivery Point The Part es shouldcarefully consider how to define the facilities for the purposes of Conditions Precedentand Force Majeure Events under their Agreement.

Definition for “Senior Executive”: To be used if Article 23.3.2 is selected.

Definition for “TOPQ”: This formulation assumes that the Take or Pay Quantity will beless than the Adjusted ACQ. If Buyer is to be subject to a 100% take or pay commitment, then the Take or Pay Quantity will be the Adjusted ACQ and the two terms can be merged.

Definition for “Tax”: The Parties may wish to expand the list of taxes based on the circumstances.

Definition for “TCF”: The Parties must agree the specific units of volume, energy amount, pressure, temperature, etc. to be used in their Agreement. If the Parties specify theEnglish sys em of measurement then the applicable units would be cubic feet for volume, pounds per square inch for pressure, Btus for energy amount and degrees Fahrenheit for temperature. If the Parties choose to use the metric system, then the applicable unitswould be cubic meters for volume, pascals for pressure, gigajoules for energy amount, and degrees Celsius for temperature. The Parties should not mix the systems of energy measurement or of volume measurement or of pressure measurement in their Agreement. For example, do not use Btus in one part and gigajoules in another part. Another example, do not use cubic feet for volume amount and cubic meters in another part.

Definition for “TCQ”: The concept of total contract quantity as it relates to an obligation of Seller o make available and of Buyer to take is generally relevant only for supply contracts.

Definition for “Transfer”: The Parties may want to consider including a change of control provision, especially if there is a possibility that Buyer’s transferee could be less creditworthy or that Seller could transfer an interest before completion and the transferee could be less creditworthy than Seller.

Article 2.2.1.10: Buyer may also consider negotiating for priority of availability for otherbuyers.



Article 2.2.3: The below is Buyer’s commitment not to purchase gas from other suppliers. The Parties should consider the effect of applicable anti-trust or anti-competition Laws on the enforceability of such commitment.

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Article 2.2.4: Seller’s commitment not to sell gas to other purchasers. The Parties should consider the effect of applicable anti-trust or anti-competition Laws on the enforceability of such commitment.

Article 2.2.5: Seller’s right of first refusal. The Parties should consider whether there should be additional compensation either integrated in the price or as a separate charge for a right of first refusal, such as follows.

Article 2.2.6: Buyer’s right of first refusal. The Parties should consider whether there should be additional compensation either integrated in the price or as a separate charge for a right of first refusal, such as follows. The Parties should consider the effect of applicable anti-trust or anti-competition Laws on the enforceability of such commitment.

Article 3: An indicative list of sample Conditions Precedent are se out below. These should be supplemented, modified or removed to have the actual conditions precedent reflect the applicable circumstances.

Article 3.1: The condition should address the specific Approvals required of Seller

Article 3.1.2: The condition should address the specific agreements required of Seller.

Article 3.1.4: The Parties should address the specific security arrangements necessary to finance and the concerns of each Party.

Article 3.2: The condition should address the specific Approvals required of Buyer.

Article 3.2.2: The condition should address the specific agreements required by Buyer.


Art c e 3 3: To be used if Se er or Buyer must contract w th a th rd party to transportGas to or from the Delivery Point.

Article 3.3.1: This provision should address the specific Approvals required of Gas Transporter.

Article 3.3.2: The condition should address the specific agreements required of Gas Transporter.


Article 3.6.1: The Parties may wish to consider whether a liquidated damages provision may be appropriate where a Party fails to make a good faith effor to satisfy the ConditionsPrecedent.



Article 4.5: The inclusion of some of these concepts may be beyond the basic notion of a long term sale and purchase arrangement.

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Article 4.8: If either Party engages a Gas Transporter the Parties should insert as appropriate representations and covenants reflecting the status of the Gas Transporter’s facilities.

Article 4.10.1: The Parties should consider whether the US Anti-Boycott Law is applicable and whether the following provision should be modified accordingly.

Article 5.2: The notion is that the Commissioning Period will be the actual period of timerequired to commission the Buyer’s Facilities and Seller’s Facilities (and, if applicable, the Gas Transporter’s facilities). The Parties may want to consider inserting actual criteriafor completion of commissioning such as Seller being able to maintain pressure at the Delivery Point or being able to deliver at the MaxDCQ for a period of time and Buyer being able to take at least the MinDCQ. The Commissioning Period could con inue beyond the Start Date, i.e. the beginning of the Build-Up Period.

Alternative 1 for Article 5.4: For supply type of contracts where there is no anticipated Decline Period.

Alternative 2 for Article 5.4: For other types of contracts where a Decline Period may occur.

Article 5.5: The Parties should consider whether references in the Agreement to a Decline Period and depletion are applicable.

Article 5.8.2.4: Use if the remedy for a Transfer not in compliance with Article 24.1 is the other Party’s right of termination.

Article 5.8.3.4: Use if the remedy for a Transfer not in compliance with Article 24.1 is the other Party’s right of termination.

Article 6.1: It may not always be necessary for Seller to install facilities in which casethis provision may be omitted.

Option for Article 6.1.3: A continuing duty to construct, repair and maintain is typicallyincluded in depletion type contrac s. The Parties should consider whether there is a need for continuing duty to construct, repair and maintain in a supply type contract.

Article 6.1.3.2: Buyer and Seller may wish to establish an economic test which must bepassed before Seller’s obligation to replace damaged facilities becomes effective. Such a test is intended to provide relief from this replacement obligation in the final years of the contract when it may be in both parties interest to seek a financial resolution and end the contract term early.

Article 6.2.1: It may not always be necessary for Buyer to install facilities in which case this provision may be omitted.



Option for Article 6.2.3: The Parties should consider whether Buyer should have a continuing duty to construct, repair and maintain.

Article 6.2.3.2: Buyer and Seller may wish to establish an economic test which must bepassed before Buyer’s obligation to replace damaged facilities becomes effective. Such a test is intended to provide relief from this replacement obligation in the final years of the contract when it may be in both Parties’ interest to seek a financial resolution and end the contract term early.

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Article 6.4: The Parties may need to also refer to right of way determination by Gas Transporter.

Article 7.1: The following provision contemplates that only Seller’s Facilities and Buyer’s Facilities are involved in the commissioning process. If the Parties use a Gas Transporter, which needs to build additional facilities, the commissioning process should be revised toaccurately reflect the intent of the Parties.

Alternative 1 for Article 7.1.1: Use if Alternative 1 of the definition for the CommissioningPeriod is selected.

Alternative 2 for Article 7.1.1: use if Alternative 2 of the definition for the Commissioning Period is selected.

Alternative 3 for Article 7.1.1: use if Alternative 3, 4 or 5 of the definition for the Commissioning Period is selected.

Alternative 1 for Article 7.1.2: For use where the Commissioning Period is fixed and theStart Date will occur and the Build-Up Period will commence on expiration of the Commissioning Period. In these circumstances, during negotiations, the Parties will need to consider whether the Take or Pay / Shortfall obligations will apply or be relieved and/orwhether liquidated damages should be payable by the party responsible for the delay.

Alternative 2 for Article 7.1.2: For use where the Parties agree to extend the Commissioning Period in the event of delay.

Article 7.2.3: If Expert determination is used in the below, then Article 23.4, which is an option, must be included in this Agreement.

Article 7.3.2: The Parties may wish to consider establishing a more lenient quality specification during the Commissioning Period and/or a separate remedy for failure to meet the Quality Specification during the Commissioning Period.

Article 7.4: The Parties should consider what tests are needed to properly commission their facilities, including the need to test to make available and take the MaxDCQ, forflexibili y of deliverability, and for conformance to Quality Specifications.

Article 8: The Parties may consider whether the Agreement should make provision for no scheduled maintenance by either Party on the basis that Buyer could shut down to effect its maintenance without liability in any contract year after it has taken delivery of the



annual take or pay quantity and Seller could effec its maintenance by modulating production across multiple facilities.

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Article 8.1.1.1: Insert specified periods during which Scheduled Maintenance may not occur.

Article 8.1.1.2: The Parties should determine if there are any times during which Scheduled Maintenance should not be permitted, and modify the definition of the above “specified periods” accordingly to reflect only those times during which Scheduled Maintenance (e.g. the reduction in DCQ or MaxDCQ) is allowed. In addition the Partiesmay wish to modify this provision to allow each Party to carry-forward to the next Contract Year or Years, any unused maintenance Days, or similarly, to “borrow” maintenance Days from a future Contract Year for use in a current Contract Year.

Article 9: This Article provides for Seller to give non binding projections of its averagedaily capacity on an annual basis, except that during the Decline Period some of the projections are binding. In general Seller is obliged to have the capacity to make the MaxDCQ available for delivery. This provision is intended to notify Buyer of additionalquantities of Gas available for delivery under this Agreement. Under certain circumstances it may make sense for Buyer to furnish its forecast first. Also if a Party does not timely submit its forecast, then the other Party should not be relieved of itsresponsibility to furnish a timely forecast. If the energy content of Gas may vary significantly from the Quality Specifications and/or if there will be significant variations n qua ty from t me to t me then the Part es may des re for Se er to also forecast theenergy content, components and quality of Gas.

Article 9.1.1: The one year forecast specified in Article 9.1.1 could be adjusted to longer periods as appropriate.

Option for Article 9.1.4: The Parties may wish to include a procedure for revising the DCQ from year to year or quarter to quarter during the Decline Period. The Parties need odecide whether the DCQ(s) during the Decline Period will be given on a Monthly, Quarterly or Yearly basis. If the decline rate is severe, then the Parties may prefer that the DCQ during the Decline Period be given on a month to month basis.

Article 9.1.4.4: If Expert determination is used in the below, then Article 23.4, which is an option, must be included in this Agreement.

Article 9.2: This Article provides for Buyer to give non-binding p o ections of its average daily requirements on an annual basis.

Option for Article 9.2.1.4: The Parties may wish to provide for downward flex in the calculation of the Ad ACQ, which may be appropriate where there are predictable annual fluctuations in Buyer’s ability to take gas arising from third party operations, such as where there are discrete liftings of LNG, methanol or other liquids from Gas (as opposed to continuous deliveries of liquids by a third party. The Parties may also wish to condition



use of downward flex to circumstances arising from such third party operations in orderto differentiate downward flex from Scheduled Maintenance.

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Option for Article 9.3: This Article provides for Seller to give non binding pro ections ofits daily capacity on a quarterly basis. If the energy content of Gas varies significantlyfrom the Quality Specifications or if the quality characteristics of Gas vary significantly from time o time, then the Parties may wish to specify that Seller will also forecast the energy content and/or quality characteristics of its Gas.

Option for Article 9.4: This Article provides for Buyer to give non-binding pro ections of its daily requirements on a quarterly basis.

Article 10: This Article provides for Buyer to give binding nominations before the commencement of a Month or Week for each Day of that Month or Week. However, this is by way of example only - there will be cases where Nominations on a different timeframe are applicable, such as on an hourly, daily or quarterly basis. Also, depending uponBuyer’s requirements p ofile, the nomination form could provide for varying volumes during the applicable nomination time frame, e.g. to allow Buyer to nominate different hourly quantities during a Day.

Article 10.1.5: If the Parties agree that Buyer will have a MinDCQ, then the Parties should determine what exceptions if any, such as “zero nominations”, are allowed.

Article 10.2: The Parties may wish to consider whether the deemed nomination should bedeterm ned based on an average of severa prior per ods or on the same per od in a pr orContrac Year.

Option for Article 10.3.5: The Parties may wish to use this option to provide for situations when Seller has relied on Buyer’s forecast of a period of lower nominations to reduce Seller’s capacity during such period.

Alternatives for Article 10.4.2.2: The PNQ is the standard by which the consequence, ifany, is determined for a period of inability. Because the period of inability could extend beyond the period for which Buyer made its most recent nomination, then in order to avoid gaming of he situation several alternatives are provided which specify the PNQ for the remainder of such period of inability.

Article 11.1: this Agreement contemplates a single Delivery Point.

Option for Article 11.1: If multiple Delivery Points are available, then the Parties may wish to provide for primary Delivery Points as well as substitute Delivery Points. The Model GSA is set up on the basis of one Delivery Point. If the Parties wish to provide for substitute or multiple Delivery Points, then those Delivery Points and the conditions and circumstances for their use must be reflec ed throughout the Parties’ negotiated agreement.

Article 11.2: Under English law title in goods cannot pass where the goods are co-mixeduntil the goods are ascertainable and made divisible (e.g. by an allocation agreement in the



context of gas). The Parties may wish to consider whether allocation arrangements areneeded in the case where there are multiple sellers or buyers.

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Option for Article 12.1.1: Under special circumstances, such as base loading an infrastructure project, the Parties may want to consider having a minimum take obligation, as well as a minimum nomination obligation. If there are no negative consequences to Buyer’s Facilities or to Seller’s Facilities or the Reservoir, then this provision need not be included in the Agreement. If the Parties agree to have a minimum take obligation then a remedy for non-compliance must be addressed.

Option for Article 12.1.2.2: Under special circumstances, such as base loading an infrastructure project, the Parties may want to consider having a minimum take obligation, as well as a minimum nomination obligation. If there are no negative consequences to Buyer’s Facilities, Seller’s Facilities, or the Reservoir, then this provision need not be included in the Agreement. If the Parties agree to have a minimum take obligation then a remedy for non-compliance, in addition to payment, must be addressed.

Article 12.1.3: The rate of delivery will depend upon Buyer’s requirements, which may vary within a Day and therefore, not necessarily be uniform and constant. Buyer’s nominationrights under Article 10 should also track Buyer’s requirements’ profile. If the Parties provide for intraday changes in rate of delivery, the Parties may wish to limit the rate of change of the rate of delivery by an applicable amount or percentage that reflects thecapacity of the reservoir, the number of producing wells, and the capacity of Seller’s Facilities . In addition, if a third party transporter is involved in delivering Gas to Buyer, this provision should also address the range of transporter-caused fluctuations in delivery rates which will be acceptable.

Article 12.2: The ability to make available and take will be affected by numerous physical factors. The Parties may want to consider making a provision for tolerance for the quantities delivered. The DTQ may be set to zero.

Article 12.4: Buyer is generally obligated to pay for all Gas made available and taken. however, in certain situations where Seller is able to increase quantities of Gas made available without Buyer’s immediate knowledge, such as increasing pressure at the Delivery Point and hence increasing quanti ies delivered into a pipeline, then Buyer may not be required to pay the full contrac price for such overage, at least above a specified tolerance level. Similarly, in certain situations where Buyer is able to increase quantities of Gas taken without Seller’s immediate knowledge, such as decreasing pressure at the Delivery Point and hence increasing quantities taken from a pipeline, then Buyer may berequired to pay a premium over the full contract price for such overage, at least above a specified tolerance level. This provision contemplates that the over-delivery quantity will be balanced by offsetting any Shortfall Quantity in money in the Mon hly Statement.

Article 12.5: The concept of shortfall applies only to Properly Nominated Quantities. Because an ERQ is a request not a proper nomination, if for any Day for which Buyer has



requested an ERQ, Seller shall have met its obligation if it makes available the MaxDCQ - DTQ. Seller’s inability to make a portion of the ERQ available shall not constitute a shortfall.

Alternative 3 to Article 12.5.1: This alternative is the equivalent of “cover”, the purpose of which is to keep Buyer whole (e.g. no better and no worse off than had Seller performed) and is appropriate in situations only where Buyer has access to alternative energy supplies. The Parties may wish to itemize the types of Buyer costs and expenses that will be covered by this payment.

Article 12.5.2: The above alternatives are examples and other alternatives may be constructed by the Parties to meet their particular circumstances.

Article 12.6: In certain circumstances it may be appropriate for Seller to impose Monthly or even Daily minimum paymen obligations on Buyer. However, the Model GSA is structured for annual not Monthly or Daily minimum payment obligations.

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Article 12.7: The take or pay provision in this Model GSA is set up to enable make up on an annual basis. The Par ies may also wish to consider having monthly or Quarterly minimum quantities and allowing make-up on a monthly or Quarterly basis. If the Parties wish to have take or pay on a Monthly or Quarterly basis the Model GSA definitions affecting such calculation will need to be modified to enable a period shorter than a Contract Year. The Parties may also want to consider providing for estimated payments if Buyer is behind in taking Gas and is unlikely or unable to take the AdjACQ.

Article 12.7.1: As an alternative, the Parties may wish to account for recovery of any Make-Up Aggregate as a “paper transaction”. That is, as part of the Annual Statement such that if during the Contract Year Buyer has taken and paid for Gas at the Contract Price in excess of the AdjACQ, then Buyer would be entitled to a credit equivalent to the Make-Up Aggregate multiplied by the Contract Price that could be applied in future years under conditions agreed to by the Parties.

Option for Article 12.8: In certain circumstances i may be appropriate for Buyer to have the ability to reduce i s take or pay obligations in a given year by offsetting any quantities of gas that Buyer has previously purchased in excess of the AdjACQ in previous years. The Carry Forward Aggregate represents the accumulated BASQ. The notion of Carry Forward is often seen as a way of “softening the take or pay obligation. However, where Seller is prepared to allow Buyer to use accumulated Carry Forward Aggregate, Seller may still wish to limit the extent to which Buyer can reduce its take or pay commitments in any given Contract Year. Two of the methods often adopted are limiting the number of years during which the Carry Forward Aggregate may accrue (i.e. 3 years) and/or limiting the maximum amount of Carry Forward Aggregate that can be used in any Contract Year (i.e. 90% of BACQ or 20% of ACQ). This is a mat er to be negotiated between the Parties.

Third option for Article 13.3.5: This option should be selected only if the Parties agreeunder Article 10.4.5 to give Buyer the right to acquire an alternative source of supply.



Article 14.2.1: If the Metering Party is not Seller, then the Parties should reconsider the allocation of the burden of proof for measurement and sampling and the allocation of liability.

Article 14.3: This Model GSA specifies general principles. Detailed methods and type ofinstruments used for measuring and/or calculation of the quantity, composition and physical properties of Gas, the procedures for verification and calibration, the methods and criteria by which measurement corrections will be made and other items relevant to the measurement of Gas including a quality assurance system for management and maintenance of the measuring equipment and processing of the measurement results, should be mutually agreed by the Parties and set out in a mutually agreed “Measurement Manual”.

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Article 14.4.3: The same percentage of error should be specified in Articles 14.4.3, 14.4.5 and 14.4.6.

Article 14.454: The same percentage of error should be specified in Articles 14.4.3, 14.4.5 and 14.4.6.

Article 14.4.6: The same percentage of error should be specified in Articles 14.4.3, 14.4.5 and 14.4.6.

Article 14.7.1: Depending on the expected or actual variations of the Gross Heating Value of the sales flow, the Parties will decide whether to adopt continuous quality measurements or quality determination through sampling.

Article 15.1: The goal of the pricing mechanism is to try and reconcile the very differinginterests of the buyer and seller in the long term and to produce a price which shares the risks in an equitable manner. For the seller the aim is to have a price that reflects the value of the gas in the marketplace from time to time and to have a price mechanism that provides confidence and predictability for it to make substantial long-term upstream nvestments From the po nt of v ew of the buyer, it is essential that the price of gasreflects that of the other fuels which gas competes with in the specific marketplace. It should be noted, in less developed countries, competing fuels may be subsidized and therefore should be closely scrutinized.

For example, if selling to a power plant, typical indices favored by buyers will be fuels that compete with natural gas (especially if the power plant has fuel switching capabilities), such as oil products and coal. It may also be desirable for power plant projects to include a power index. However, if Buyer is a municipality and the gas is to be used for residen ial purposes, it may be more appropriate to use a Producer Price Index in combination with several fuel indices such as crude oil and natural gas.

Producers (sellers) typically do not want to take pricing risk because they need predictability of pricing to underwrite development of their production projects. A “basket” of indices (2 or more indices) may be desirable because it is not as likely to have significant fluctuations (multiple indices dampen the volatility).



The frequency of determining/applying an index can be monthly, quarterly or yearly and is a matter of negotiation. If both buyer and seller are concerned that the price of gas should as closely as possible reflect the price of compe ing fuels in the marketplace, then ideally the price should be recalculated as frequently as possible. However, if the price is recalculated on a quarterly or monthly basis, then the average price payable over the life of the contract will be slightly higher than if yearly price escalation is used (assuming the indicators rise and do not fall).

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The base (initial) value for each Index is also important to cons der In part cu ar thebase value should be determined when the value of the index is already published. Alsoconsideration should be given to the long-term trend of the index in the short-term to be sure the base value is not below/above trend or it may substantially impact the gas price in the future.

Formula in Article 15.1: The Prices and the indices should be denominated in the same currency or an appropriate currency conversion mechanism should be agreed. The total of all of the weight factors must be 1.00. The number of indices and the type of each index are negotiable items. Each index is a defined term and as such should include the name of the index, where the index is published, applicable identifying specifications (e.g., location, type) and units. For each IndexM(i) the initial Monthly value should be the Monthly value for the Month in which the Effective Date occurs and such initial value will remain constant throughout the Term. Commonly used indices are typically related to fuels and include:

Oil Products (Heating/Fuel Oil) Index - Care should be taken to determine the appropriate reporting market for the oil products index as they may vary from inland markets to coasta markets and other markets High su fur fuel-o is genera y not perceived as acompe itor to gas and is therefore rarely used.

Coal Index – Coal sometimes competes with gas (more commonly for power projects). Power producer buyers generally find coal an attractive index. Sellers tend to perceive it as a low quality fuel and an index likely to grow less in price than other fuels in the longterm.

Crude Oil P ice Index – Sellers tend to relate to this index because typically they are also o producers. Buyers on the other hand tend to be opposed to using crude oil as an index because they do not compete with it in the specific marketplace.

Electricity Index – In some markets the principal competitor to gas is electricity. Fromthe buyer’s view, electricity is an attractive index. Sellers do not generally find the electricity index attractive because of concern that power (because of its close connection to governments) may represent a more regulated price than a true market price.

Natural Gas Index – Both buyers and sellers shy away from a gas index because of the fear that it might be circular and lead to price instability. However if the market has gas



on gas competition this may be appropriate. Care should be taken to define an appropriate market index for gas in the specific marketplace.

Producer Price Index – This index is attractive to buyers because i is relatively stableand predictable. Sellers also view this index favorably because of its predictability andbecause it can be a useful hedge against collapsing oil prices. This may be an attractive option for financed pro ects.

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Petrochemical Index – Such as fertilizers (e.g. ferticon) may be an appropriate index where natural gas is a feedstock for the petrochemical (e.g. methanol, ammonia, and urea).

Transportation Fuels Index including Next Generation Fuels (e.g. GTL and CNG) - This index may be appropriate in a highly developed market where transportation fuels are a competitor.

Internal Inflation Index – This index may be attractive in countries where prices and/orcurrency conversion is regulated.

Article 15.2.3: Note that depending on the alternative used in respect to the remedy for Shortfall Quantity the Shortfall Gas Price may be used to determine a charge or alternatively a credit.

Article 15.7.4: If Expert determination is used in the below, then Article 23.4, which is an option, must be included in the Parties’ Agreement.

Option for Article 15.9: There are several approaches to a price reopener provision. One common approach is to review at regular intervals (e.g. 3-5 years). Review may be initiated by either Buyer or Seller provided that such Party can demonstrate that the price is nolonger appropriate in light of the current market conditions. Another approach is to leave the base price, frequency of escalation, review period and base period intact and reviewthe indicators used to escalate the price. In this case either side would be able to introduce a new price index into the pricing formula or vary the weighting of the existing indices if they can demonstrate that the indices have changed significantly since the contract was signed. A third alternative would require the Parties to agree on a new base price.

The advantage of this type of price reopener provision is that it allows the Parties to adjust the pricing provisions over time and protects both sides against the risk of losingmoney in the long-term. The disadvantages are that these clauses tend to be extremelycomplex and difficult to draft and negotiate. They can also lead to disputes.

Explanatory Note re Currency: In some countries the gas price and amounts invoiced under this Agreement may be required to be stated and paid in local currency and not U.S. Dollars or other hard currency. In this event, an Article for currency conversion and currency stabilization (protection from currency inflation) may be appropriate. To stabilize the price for currency, the following formula may be used; but this may not be



adequate if currency fluctuations are relatively large and/or the time between the invoice and the actual payment date is relatively long:

Payment Amount = Contract Amount x [C/D]

Where:

C = the exchange rate of local currency to USD on the date of invoice or the Day before the date when payment is due.

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D = the exchange rate of local currency to USD on the effective date of the Parties’ negotiated agreement.

Consideration may also need to be given to the convertibility of the currency and/or exchange restric ions.

The Parties may also want to consider issues such as: (1) monetary floors and ceilings to making a Change in Law claim; (2) ability as to when a Party can make a Change in Law claim (once a year, once in three years etc.); (3) need to list the presently applicable Laws and Taxes to set a reference point; (4) setting a date from when the Change in Law clause will be applicable (usually the date of setting the price/tariff, which can at times be beforesigning of the agreement); (5) ability/inability to claim certain Change in Law claims (e.g., in instances where certain Taxes are out of the Change in Law claim, because the government is directly obligated to otherwise compensate a Party (by say a State Support Agreement ; and (6) when in reality will the Change in Law claims be paid/lead to change in Contract Price, e.g., post resolution of any increase in tariff claims under the relevant PPA or immediately.

In any event the Parties need to consider and agree what are to be the conditions underwhich a Party may initiate a Base Price revision, the rights to audit, and the effective date of any such revision to the Base Price. The Parties should also consider whether it is appropriate for both Parties or only one Party to have the right to initiate a price reopener.


Article 15.10: Additional charges, such as for transportation or treatment of Gas, are anegotiable item and depend on the specific facts and arrangements. Typically if a Party has control (e.g. ownership) of the pipeline delivering Gas or the treatment facility processing Gas, then the transportation or treatment charges will be for that Party’s account. If the transportation or treatment is controlled by a third party, then the Parties will negotiate who pays the transportation to the delivery point, or other applicable location or the treatment charge. Any such charge shou d be stated in the contract toavoid any misunderstanding.

Article 16: The determination of the Daily Gas Value is a decision tree dependent on nominated and requested quantities on each Day and the actual quantities made available



and taken on each Day. This Article establishes a decision tree of applicable scenarios with a condition statement at the beginning of each section and nested conditions at the beginning of each subsection and sub-subsection. If the condition statement (includingthe nested conditions of the subsections) is not met, then the pricing in that clause is not relevant and should be skipped. For example, after the Start Date, Article 16.1 will nolonger apply to any Gas delivered. Furthermore, for any given Day only one of the DailyGas Value formulas in this Article 16 will apply. The decision tree and formula set out inArticle 16 are based on the inclusion of delivery tolerance. If the Parties do not elect to have a delivery tolerance, then the references to DTQ may be deleted or DTQ set to zero (0).

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Article 16.2.3: This assumes that the amount of a Shortfall Quantity is determined using Article 12.5.1 Alternative 1.

Article 16.3: Because the MUP will most likely be less than the CP, Buyer will have a pricing incentive to designate MUQ. In any Contract Year in which Buyer has taken the AdjACQ, Buyer would for the PNQ for each Day for the remainder of such Contract Year be likely to designate the entire PNQ as MUQ until Buyer has used all of its MUA.



Article 16.5: Because the MUP will most likely be less than the CP, Buyer will have a pricing incentive to designate MUQ. In any Contract Year in which Buyer has taken the AdjACQ, Buyer would for the PNQ for each Day for the remainder of such Contract Year be likely to designate the entire PNQ as MUQ until Buyer has used all of its MUA.


Article 17.1.1: In the Attachmen for the Monthly Statement there is a column for bothvolume and energy amount; because, even though the energy amount is used to calculatequantity and value in this Model GSA, the volume is used in determining the energy amount.

Article 17.1.6: Specify the VAT and other Taxes payable.

Article 17.1.8: Specify the VAT and other Taxes payable.

Variable “TMG” in formula in Article 17.1.9: For simplicity this formula assumes that thetaxes on the MGV are to be paid by Buye . If the Parties agree to an alternative allocation of taxes due, then this formula should be modified.

Variable “OBA” in formula in Article 17.1.9: Other amounts due whether from Seller orBuyer would include among others amounts due for payments made to a Gas Transporter.



Variable “OSA in formula in Article 17.1.9: O her amounts due whe her from Seller orBuyer would include among others amounts due for payments made to a Gas Transporter.

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Article 17.2.1: In the Attachment for the Annual Statement there is a column for bothvolume and energy amount; because, even though the energy amount is used to calculatequantity and value in this Model GSA, the volume is used in determining the energy amount.

Article 17.2.17: Specify the VAT and other Taxes payable

Article 17.2.19: Specify the VAT and other Taxes payable

Variable “ATG” in formula in Article 17.2.20: For simplicity this formula assumes that the Taxes on the BDP are to be paid by Buyer. If the Parties agree to an alternative allocation of Taxes due, then this formula should be modified.

Article 17.3: Any other annual adjustmen s should be added.

Article 17.4.2: The Parties may wish to consider crediting as opposed to paying the reconciliation of any Disputed Amount due to Buyer.


Article 18.1.1: The Parties may wish to alter the allocation of Taxes based on the circumstances.

Article 18.3: The Parties may wish to alter the allocation of Taxes based on the circumstances.

Article 20: In determining the need for requiring either or both Parties to maintain some level of insurance, the following may need to be evaluated:

• The type and amount of risk and/or liability imposed on each of the Parties by contractual obligation;

• The financial strength and security of the Parties and their ability to perform during a material or catastrophic unplanned event that impacts their Agreement;

• The availability, economics, security and ability to perform of any potential insuranceproviders, including captive insurers and State or host government insurance providers;

• The exposure, severity and frequency of risks that expose the facilities and projectsthat are part of or dependent on the Parties’ negotiated agreement.

Insurance requirements may include the following types of coverage:

• Property damage insurance during construction and opera ions;

• Business interruption insurance including “Delay in Start-Up” during the constructionperiod;

• Motor vehicle liability insurance covering owned and no-owned vehicles;



• Workers’ compensation (or local equivalent) and employe ’s liability insurance; r

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• Third party liability insurance and umbrella or excess liability insurance;

• Environmental liability insurance;

• Marine Hull & Machinery insurance;

• Protection and Indemnity insurance;

• Charterer’s legal liability insurance;

• Aircraft hull & liability insurance covering owned and non-owned aircraft; and

• Political risk insurance.

The specifics of risks presented by the facilities involved with their Agreement will impact the need for each of the above lines or types of insurance. For each line of insurance there may be specific requirements regarding the insuring form (the insurancecontract or policy), policy limits, and maximum deductibles allowable.

Article 20.1: Where the Parties’ respective Facilities are contiguous the Parties may want to consider whether each Party should be a co-insured on the other Party’s policies.

Option for Article 21.4: To the extent that the Parties intend that the Parties’ Agreement will be a sales agreement and not a joint venture and that remedies under this Agreement are limited to contract remedies, the Parties should carefully consider whether an exclusion of the limitations of liability for Willful Misconduct and/or Gross Negligence isappropriate. Alternatively, if normal remedies are inadequate, the Parties may considerimposing liquidated damages as the remedy for Willful Misconduct and/or Gross Negligence.

Article 23.1: The provisions of the Parties’ Agreement must be analyzed taking in o consideration the law chosen in this Article 23.1 and any other applicable law.

Alternative 2 to Article 23.2: Arbitration Agreement with Optional Provisions.

Article 23.2.2: These administered rules are listed in alphabetical order by institution and this order is not intended to reflect or suggest any hierarchy or order of preference for these rules.

Article 23.2.2: These non-administered rules are listed in alphabetical order by the issuing institution and this order is not intended to reflect or suggest any hierarchy or order of preference for these rules.

Alternative 2G to Article 23.2.3: Verify the consistency of the Administering Institutionwith the rules selected. If the Host Government is a Party to this Agreement, considerwhether the Rules of Procedures for Arbitration of the International Centre for Settlement of Investment Disputes (ICSID) would be appropriate; and, if so, an alternative arbitral institution should also be selected for disputes for which ICSID may lack jurisdiction.



Article 23.2.6: When administered rules are selected, the Arbitral Institution to appointan arbitrator when there is a default by a Party or other arbitrators in the appointment will be the Arbitral Institution administering the chosen rules. If the Parties select theUNCITRAL Rules, they should generally designate an appointing authority.

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Option for Article 23.2.17: Use Alternative 1 if the Parties to the arbitrations are thesame. A consolidation provision can lead to litigation over the right to and method of consolidation, delaying resolution of the Parties’ Dispute.

Alternative 2 to Article 23.1.17: Use Alternative 2 if the Parties to the arbitrations arenot identical.

Use Article 23.3.1 if Articles 23.3.2 and/or 23.3.3 are selected.

Article 23.3.3: These mediation and ADR rules are listed in alphabetical order by issuing institution, and this order is not intended to reflect or suggest any hierarchy or order of preference for these rules. To govern mediation under A ticle 23.3 consider choosing the mediation rules of the same institution whose arbitration rules are chosen to govern arbitration under this Agreement.

Article 23.3.4: The number of Days should be tied to the number of Days allowed abovefor Senior Executive Negotiations and/or Mediation. This Article 23.3.4, when used with Multi-Step Options, should replace Article 23.2.1.

Article 23.6: Confirm the authority of each Party to waive its sovereign immunity underapplicable local laws.

Option for Article 23.8: This Court selection clause should not be used with the provisions providing for binding arbitration – Article 23.1.

Guidance Note for Article 23.4

Agreements with NO Financing:

For gas sales agreements (“Agreement”) with no external financing involved as part of that Agreement or in the underlying structure of the producing, transportation or purchaserfacilities, the insurance requirements for each of the Parties and if applicable the Transporter becomes a subject of negotiations. Each Party to their Agreement will have a differing rationale for including or not including specific insurance requirements in theirAgreement. In addition to the negotiating position of each of the Parties, host government laws, Granting Instrument requirements, state oil company requirements and local custom and practice may impact the insurance decision.

Agreements with Financing:

In addition to considering the items outlined under the heading “Guidance Note: Agreements with NO Financing“, when external financing is provided (by either commercial lenders or government entities) as part of the Agreement, the lenders will impose insurance requirements on the borrower and perhaps on the other parties involved with



the delivery of Gas (i.e. Seller, Buyer, and Transporter). The size of the borrowing (or lenders commitment), the point of the initial borrowing and the period of the finance agreement will be major factors in determining the types, amounts and duration of thelenders insurance requirements. The insurance requirements may become part of one, all or selected agreements (Engineering Procurement & Construction, Sales, Transportation,Processing, Operating, etc.).

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Insurance is viewed by the lenders as an integral component of the financing. During the negotiating and drafting of the financing “term sheet”, significant or material insuranceissues should be identified, discussed and agreed “in principal” with the lenders. Typically, the lenders will appoint a “lenders Insurance Consultant” (Insurance Consultant) to advise the lenders on the scope and quantum of the insurance requirements to be included in the financing agreements. Additionally, the Lender’s Insurance Consultant may be instructedby the lenders to review the underlying contracts, financial security of any proposed insurers (and reinsurers), local laws, regulations, and local custom & practice involving insurance issues, etc.

Initially, the Lender’s Insurance Consultant will be the primary negotiator on insurance issues. Negotiation and agreement with the Insurance Consultant on the insurance issuesshould begin as soon as possible in the process of arranging the financing and proceed at a pace consistent with the other components of the financing. Unresolved issues may need to be referred to the lender for final resolution.

A schedule of minimum insurance requirements as initially proposed by Lender’s Insurance Consultant could include the following types of coverage:

• Property damage insurance during construction and opera ions;

• Business interruption insurance including “Delay in Start-Up” during the constructionperiod;

• Motor vehicle liability insurance covering owned and no-owned vehicles;

• Workers’ compensation (or local equivalent) and employe ’s liability insurance;

• Third party liability insurance and umbrella or excess liability insurance;

• Environmental liability insurance;

• Marine Hull & Machinery insurance;

• Protection and Indemnity insurance;

• Charterer’s legal liability insurance;

• Aircraft hull & liability insurance covering owned and non-owned aircraft; and

• Political risk insurance.

The specifics of risks presented by the facilities involved with the Agreement and eachcomponent of the financing will impact the need for each of the above lines or types of



insurance. For example, if there will be no aircraft (either fixed wing or helicopter) exposure, this coverage may be deleted from the requirements. For each line of insurance, lenders will have specific requirements regarding the insuring form (the insurance contract or policy), policy limits, and maximum deductibles allowable.

In addition to requiring specific types of insurance, the lenders will require a number of policy amendments. The structure of some of the amendments will be determined by the structure and the number of parties involved in the financing. The remaining amendments will be endorsements and coverage enhancements that provide additional protection forthe Lender. The more common of these endorsements can include:

• Severability of interests clause;

• Cross liability clause;

• Lenders will be named as additional insureds;

• All required insurance shall be primary and not contributory with any insurance or self-insurance maintained by the lenders;

• Project insurers agree to waive rights of subrogation against lenders;

• Lenders are not liable to the insurers or reinsurers for the payment of any insurance or reinsurance premiums;

• Lender to be provided with a minimum period of prior advance notice of cancellation or material modification of any required insurance. (30 Days or longer); and

• Lenders will receive copies of all policies and/or certificates of insurance.

Option for Article 23.4.5: If possible, the Parties should agree in advance to the form of such subordination agreement and attach such form as an Attachment to their Agreement.

Article 27.5: If one of the Parties is a Government entity the Parties may wish to provide expressly for fiscal stabilization of their Agreement.

Article 27.8: If English Law is the law chosen, consider whether an express reference should be made to the Contracts (Right of Third Parties) Act 1999.

If during a year Buyer takes a total quantity (excluding EGQ) < TOPQ, then such difference is designated as Buyer’s Annual Deficiency Quantity (“BADQ” = TOPQ – (AAQ – ∑EGQ)). As mentioned above, the Parties may wish to consider whether the ∑EGQ should be excluded from the take or pay calculation. The rationale for excluding the EGQ from the TOPQ is that making EGQ available is an option and not an obligation, but taking theTOPQ is an obligation. The BADQ is calculated and Buyer’s Deficiency Payment (“

BDP”) is

pa d on an annua bas s BADQ for each year will be aggregated w th BADQ if any from prior years to determine the Make-Up Aggregate (“

i l i . i , ,MUA”). If during a subsequent year

Buyer takes a total quantity (excluding EGQ) > AdjACQ, then depending on the alternative selected all or a portion of MUA may or shall be applied as a Make-Up Quantity (“

MUQ”), so long as Buyer nominates and takes the MUQ, at a price which is typically small compared



to the CP for a portion of quantities taken (excluding EGQ) > AdjACQ within limits agreed by the Parties. The MUA will be reduced by the amoun of any MUQ that has been taken or that has expired (MUA = ∑BADQ - ∑MUQ - ∑ExpMUA).

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Documents

GUIDANCE NOTES TO AIPN MODEL FORM GAS SALES ... - …rather than on the basis of discrete lifings, such as in an LNG sales contract. For this reason the Model GSA is not intended to