Energy crisis makes multi-year contracts fashionable again
Are they now? Is this just because prices are high again and everybody seeks ways to wiggle free? Long-term agreements are here for one of two purposes. First – they give the producer of gas a safe offtake contract from a reputable and creditworthy company against which he can run his project financing. And second – they give the buyer certainty that the cargo will always be forthcoming, usually at a predictable price. Buyers need to be aware that in times of low demand, they will have to take the volumes all the same. You cannot have it both ways. Make up your mind.