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Title: Spot Gas Sales From A Producers Point Of View
Author: Robert J. Clark
Source: American Gas Association 1986
Year Published: 1986
Abstract: Several months ago, spot sales appeared to be one of the fair alternatives available to producers to market their excess natural gas. Over the past few months, however, spot sales have become virtually the only available market. Although some direct sales to end users are grandfathered under FERC Order 436, indications are that many will terminate July 1, 1986, unless the interstate pipeline providing the transport has been approved by the FERC to be an open access carrier. Thus, in the short run, spot sales are esseniial for producers to market their gas. First, we must review the history of natural gas marketing and sales by a producer. Historically, producers did not concern themselves with marketing gas. The interstate pipeline negotiated sales contracts with Local Distribution Companies (LDCs) and satisfied these sales contract requirements by purchasing gas from producers via long-term purchase contracts. The interstate pipeline made both a margin on their purchase/sales arrangements and a return on their transportation investment.

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