Litigation partner James Rogers and associate Jay Zhang discussed natural gas contract pricing provisions in an article they authored for Law360. As the focus shifts to minimizing carbon emissions and promoting clean energy, many view natural gas – considered a cleaner fossil fuel – as a bridge fuel toward a cleaner global energy infrastructure. With this increase in natural gas production, transportation, and consumption in mind, Rogers and Zhang explore two key provisions of many natural gas contracts, take-or-pay and price redetermination, and review options that offer greater flexibility for both buyers and sellers when navigating post-pandemic pricing negotiation.
“Moving forward, it will come as little surprise that force majeure clauses will command a bigger seat at the table when negotiating supply contracts. However, both buyers and sellers can also be expected to seek increased flexibility to help manage both anticipated and unanticipated fluctuations in demand.”