A Gas Sale Agreement is a fundamental contract used in the South African energy sector to formalize the commercial relationship between gas suppliers and purchasers. This document is essential when establishing long-term gas supply arrangements, whether for industrial use, power generation, or distribution. The agreement must comply with South African regulatory requirements, including the Gas Act 48 of 2001 and NERSA regulations, while addressing commercial aspects such as pricing, delivery commitments, and quality specifications. It's particularly relevant in the context of South Africa's energy transition and growing gas market, incorporating provisions for both pipeline gas and LNG supply arrangements. The document typically includes technical specifications, measurement procedures, and risk allocation mechanisms tailored to the South African operating environment.
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1. Parties: Identification of seller and buyer with full legal details
2. Background: Context of the agreement, including seller's right to sell gas and buyer's intended use
3. Definitions and Interpretation: Detailed definitions of technical and commercial terms, and rules of interpretation
4. Sale and Purchase Obligation: Core obligation to sell and purchase gas, including take-or-pay provisions
5. Gas Quantity: Specification of contract quantity, including DCQ, ACQ, and flexibility mechanisms
6. Gas Specifications: Required quality and composition of gas to be delivered
7. Delivery Point and Title: Specification of delivery point and transfer of ownership and risk
8. Term and Termination: Duration of agreement, conditions for renewal, and termination rights
9. Price and Payment: Gas price, price adjustment mechanisms, invoicing, and payment terms
10. Measurement and Testing: Procedures for measuring gas quantity and quality
11. Nominations and Scheduling: Process for requesting and confirming gas deliveries
12. Transportation and Storage: Responsibilities for gas transportation and any storage arrangements
13. Force Majeure: Events excusing performance and related procedures
14. Representations and Warranties: Basic guarantees by each party
15. Liability and Indemnities: Allocation of risks and responsibilities between parties
16. Dispute Resolution: Procedures for resolving disputes
17. Governing Law: Specification of South African law and jurisdiction
18. General Provisions: Standard boilerplate clauses including notices, amendments, assignment
1. Import/Export Requirements: Required for international gas sales, covering permits and compliance
2. Carbon Credits/Emissions: Include when parties agree to allocate carbon credits or emissions obligations
3. Resale Restrictions: Include when buyer is restricted from reselling the gas
4. Government Approvals: Required when specific regulatory approvals are needed
5. Security Arrangements: Include when payment security or performance bonds are required
6. Gas Balancing: Required for agreements involving multiple buyers or shared facilities
7. Interconnection Arrangements: Include when specific connection points need to be established or maintained
8. Emergency Procedures: Required for critical supply arrangements or hazardous locations
1. Technical Specifications: Detailed gas quality specifications and testing procedures
2. Pricing Formula: Detailed price calculation methodology and examples
3. Measurement Procedures: Detailed procedures for gas measurement and reconciliation
4. Nomination Procedures: Detailed procedures for submitting and confirming nominations
5. Delivery Point Specifications: Technical details of delivery point facilities
6. Form of Bank Guarantee: Standard form for any required payment security
7. Contact Details: List of key contacts and notification details
8. Operating Procedures: Detailed operational procedures and requirements
9. Planned Maintenance Schedule: Schedule of planned maintenance periods
10. Transportation Arrangements: Details of gas transportation arrangements and responsibilities
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