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Long-term contracts and take-or-pay clauses in natural gas Markets

Creti, Anna; Villeneuve, Bertrand (2004), Long-term contracts and take-or-pay clauses in natural gas Markets, Energy Studies Review, 13, 1, p. 75-94

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Type
Article accepté pour publication ou publié
Date
2004
Journal name
Energy Studies Review
Volume
13
Number
1
Publisher
Berkeley Electronic Press
Pages
75-94
Metadata
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Author(s)
Creti, Anna
Villeneuve, Bertrand cc
Abstract (EN)
This paper surveys the existing theoretical and empirical research on long term contracts inspired by the American experience. We analyze the role of take-or-pay clauses and price indexation rules, questioning whether regulation distorts optimal contract duration. The models we summarize allows us to discuss the economic fundamentals of the ED provisions on long-term contracts in the natural gas industry, pointing out that the ED position on long-term contracting seems to mix up contract duration and flexibility.
Subjects / Keywords
Natural gas markets; Natural gas industry; regulation; EU
JEL
C61 - Optimization Techniques; Programming Models; Dynamic Analysis
L51 - Economics of Regulation
Q32 - Exhaustible Resources and Economic Development
L95 - Gas Utilities; Pipelines; Water Utilities