13.01.2010

Refers to a supply of gas which the seller is not permitted to interrupt. Covers both tariff supplies and firm contract supplies.

It is gas sold on a continuous basis and generally on long term contracts.

A firm contract provides power plant operators with an agreed-upon capacity for the producer or pipeline to supply natural gas, establishing a high priority for fuel requested by the power plant. The supply or delivery of natural gas cannot be curtailed under a firm contract except under unforeseeable circumstances.

In contrast, interruptible contracts (also called nonfirm contracts) are lower-priority fuel supply and transportation arrangements. Under these contracts, the flow of natural gas to a power plant may be stopped or curtailed if firm contract holders use the available capacity or if other interruptible customers outbid the power plant. These contracts are generally set up for short periods, often for next-day delivery. Interruptible contracts are less expensive than firm contracts, reflecting the higher risk of disrupted fuel receipts.

Gina Cohen
Natural Gas Expert
Phone:
972-54-4203480
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