Initially, gasTrading only operated the Spot Market which provided a fully interruptible supply, with curtailments applied firstly to the lowest priced purchasers, and then moving up the price curve of the purchases.
While many customers enjoy the freedom and flexibility offered by the Spot Market and no take or pay obligations, some clients need the certainty of supply associated with a firm gas supply arrangement for at least part of their supply. Now, gasTrading offers such Firm Gas Supply alternatives.
gasTrading has developed a template contract for the trading of firm gas supply, similar to the Spot Market agreement. These are available upon request. gasTrading acts as an agent for the sellers, who have each committed to underwrite a portion of the quantity on a firm basis (Underwritten Quantity). Sellers under this arrangement have the added flexibility that, should they wish to avoid supplying gas on a particular day, or for a period, gasTrading may substitute other sellers. However, if no other sellers are available, the Firm Seller is obliged to supply its Underwritten Quantity. Similarly, if a purchaser is unable to take all of the gas it has agreed to purchase, gasTrading offers seamless integration into the Spot Market to place the unwanted supply.
For their own reasons, some sellers may find it difficult trading through an agency agreement. Consequently, a new company has been formed, Agora Gas Pty Ltd, which acts as an aggregator in the market. Agora Gas accumulates a number of gas loads that are typically too small to attract larger sellers. Larger sellers often find dealing with smaller customers difficult as the transaction cost of dealing with uses of small gas quantities is similar to that of a larger gas user but the revenue returned is considerably smaller.
gasTrading and Agora Gas work closely with the customer to create a tailored natural gas supply to meet the client’s needs. Whereas gasTrading acts as an agent for the seller and facilitates the transfer of gas from the seller to the purchaser, Agora Gas takes an equity position by purchasing the gas and on-selling the gas to the purchaser. gasTrading is of the view that a blend of firm and spot gas supply is often the best solution, but the mix should always be assessed on a case by case basis. Please contact us if you would like to explore your Firm Gas Supply options with gasTrading.
Whilst Agora Gas is acting as an aggregator and creating a new relationship with gas sellers, Agora Gas sells its product through gasTrading just like any other seller. Thus, from a purchaser’s point of view, the transaction is unchanged, only the identity of the seller changes.