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Gas Sale Agreement for Hong Kong

Gas Sale Agreement Template for Hong Kong

A comprehensive agreement governed by Hong Kong law that establishes the terms and conditions for the sale and purchase of natural gas or other gaseous fuels. The document covers essential aspects including pricing mechanisms, delivery specifications, quality requirements, measurement procedures, and operational protocols. It incorporates Hong Kong's specific regulatory requirements, particularly those under the Gas Safety Ordinance and related regulations, while addressing commercial terms in accordance with Hong Kong contract law principles. The agreement includes provisions for supply security, force majeure events, and dispute resolution mechanisms specific to the Hong Kong legal system.

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What is a Gas Sale Agreement?

The Gas Sale Agreement is a crucial commercial contract used in Hong Kong's energy sector for establishing long-term gas supply arrangements. This document is essential when parties seek to create a binding framework for the sale and purchase of gas, whether for industrial use, power generation, or commercial distribution. The agreement must comply with Hong Kong's regulatory framework, particularly the Gas Safety Ordinance and related regulations, while addressing commercial aspects such as pricing mechanisms, delivery terms, and quality specifications. It's particularly relevant in Hong Kong's evolving energy landscape, where gas plays an increasingly important role in the transition to cleaner energy sources. The document typically includes detailed technical specifications, measurement procedures, and operational protocols, along with provisions for supply security and force majeure events tailored to Hong Kong's legal and business environment.

What sections should be included in a Gas Sale Agreement?

1. Parties: Identification of the seller and buyer, including full legal names and registered addresses

2. Background: Context of the agreement, including brief description of parties' business and purpose of the agreement

3. Definitions: Detailed definitions of technical and commercial terms used throughout the agreement

4. Sale and Purchase Obligation: Core obligations regarding the sale and purchase of gas, including take-or-pay provisions if applicable

5. Quantity: Specified quantities of gas to be delivered, including daily contract quantity (DCQ) and annual contract quantity (ACQ)

6. Quality Specifications: Detailed specifications of gas quality requirements and testing procedures

7. Delivery Point and Title: Specification of delivery point(s) and transfer of title and risk

8. Term: Duration of the agreement, including commencement date and conditions for extension

9. Price and Payment: Pricing mechanism, payment terms, invoicing, and dispute procedures

10. Measurement: Methods and procedures for measuring gas quantity and quality

11. Operating Procedures: Day-to-day operational procedures including nominations and scheduling

12. Force Majeure: Definition of force majeure events and consequences

13. Liability and Indemnity: Allocation of risks and responsibilities between parties

14. Termination: Grounds for termination and consequences

15. Governing Law and Dispute Resolution: Choice of law and dispute resolution mechanisms

What sections are optional to include in a Gas Sale Agreement?

1. Transportation: Required if seller is responsible for gas transportation to delivery point

2. Minimum Take Obligations: Include if buyer must take minimum quantities or pay regardless

3. Make-up Gas: Include if there are provisions for taking previously paid-for but undelivered gas

4. Capacity Reservation: Required if specific capacity needs to be reserved in transportation system

5. Environmental Compliance: Include if specific environmental obligations need to be addressed

6. Security: Include if payment security or performance bonds are required

7. Anti-corruption: Include for international deals or when required by corporate policy

8. Change in Law: Include if regulatory changes could significantly impact the agreement

What schedules should be included in a Gas Sale Agreement?

1. Technical Specifications: Detailed technical specifications of gas quality and measurement

2. Pricing Formula: Detailed pricing calculations and adjustment mechanisms

3. Delivery Points: Technical description and diagrams of delivery points

4. Testing Procedures: Detailed procedures for testing gas quality

5. Nomination Procedures: Detailed procedures for gas nomination and scheduling

6. Contact Details: List of key contacts and authorized representatives

7. Form of Payment Security: Standard form of any required payment security

8. Operating Procedures Manual: Detailed operational procedures and requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Hong Kong

Publisher

Genie AI

Document Type

Affidavit

Cost

Free to use

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