What is a take-or-pay offtake agreement?

Under the take-or-pay clauses, the customer – buyer of a supplier/seller is required to either pay the price corresponding to certain pre-agreed quantities of natural gas and offtake said quantities or pay their corresponding price regardless of whether it purchases them.

When to Use take or pay contract?

Take or pay is a type of provision in a purchase contract that guarantees the seller a minimum portion of the agreed on payment if the buyer does not follow through with actually buying the full agreed amount of goods. Take or pay provisions can commonly be found in the energy sector, where overhead costs are high.

What is take-or-pay revenue?

Under a take or pay clause, buyers are required to make periodic payments for a fixed quantity of the product whether or not they take those quantities. The buyer is entitled to demand delivery of the product paid for in subsequent years provided certain conditions are met.

What is a ship or pay contract?

“ship-or-pay” contracts – a provision in gas contracts by which a buyer agrees to pay for contracted transportation capacity regardless of actually transported gas volumes; The buyer is entitled to take paid and not taken volumes of gas at a later date.

What is offtake agreement?

The offtake agreement is the agreement pursuant to which the off-taker buys all or a substantial portion of the output from the facility and provides the revenue stream supporting a project financing.

What are the types of contract?

On the basis of validity or enforceability, we have five different types of contracts as given below.

• Valid Contracts.
• Void Contract Or Agreement.
• Voidable Contract.
• Illegal Contract.
• Unenforceable Contracts.

Is offtake a contract?

An offtake agreement is essentially a binding contract between a company that produces a particular resource and a company that needs to buy that resource. It formalizes the buyer’s intention to purchase a certain amount of the producer’s future output.

What are the three types of off take agreements?

Types of Offtake Agreements

• Take or Pay Contracts. Offtake Agreements are typically Take or Pay Contracts that require the off-taker to pay for the products on a regular basis whether or not the offtaker actually takes delivery of the products.
• Take-and-Pay Contracts.
• Throughput Contract.
• Power Purchase Agreements.

What are the 3 types of contracts?

The three most common contract types include:

• Fixed-price contracts.
• Cost-plus contracts.
• Time and materials contracts.

What are the 3 types of contracts in law?

Types of Contracts On The Basis Of Validity

• Valid Contracts. The Valid Contract as discussed in the topic on “Essentials of a Contract” is an agreement that is legally binding and enforceable.
• Void Contract Or Agreement.
• Voidable Contract.
• Illegal Contract.
• Unenforceable Contracts.

What is a take off agreement?

What is meant by off taker?

Related Content. As used in project financing, this is the party who buys the product being produced by the project or who uses the services being sold by the project (for example, electricity, mined copper or a pipeline).

What is the definition of a tolling agreement?

The tolling agreement definition is when a potential plaintiff and potential defendant make a formal agreement to extend the statutory limitations time period on the plaintiff’s claim, typically so that parties will have more time to settle their dispute without going to court.

When do you have to pay in a take and pay contract?

A contract of sale in which the buyer becomes legally obligated to pay for the goods or services purchased in the contract upon delivery or upon the buyer’s agreement to take delivery. The buyer incurs a penalty if he/she does not pay for the goods or services at the time. It contrasts with a take-or-pay contract.

How much is a tolling fee per barrel?

Tolling Fee means $4.00 per barrel of Stock that is refined into Product, as adjusted pursuant to this Agreement.

When does the tolling fee go into effect?

Tolling fee is subject to annualized adjustments based upon the National CPI to be reviewed each December starting 1/1/08 for implementation in the following quarter.