By Peter Gilmore, Natural Gas and Power Market Industry Expert
“I’ve spent time on both sides of natural gas supply negotiations — as a marketer selling gas to large industrials and utilities, and then as a commercial manager for one of the largest gas buyers in North America. I now act as an independent advisor helping buyers evaluate what they’re actually being offered.”
— Peter Gilmore, PraxiChain Project Manager
Here’s what I’ve learned: most proposals are structured to make comparison difficult on purpose.
Pricing benchmarks that favor the seller’s position. Contract terms that limit your flexibility without flagging it explicitly. Pipeline timing that looks fine on paper, but quietly puts delivery risk on you. The people who write these proposals understand forward basis markets, transport optionality, and price exposure deeply. The people receiving them often don’t — and the sellers know it.
This isn’t a criticism of suppliers. It’s the nature of a negotiated market. But it means that if you’re an industrial buyer, a chemical manufacturer, or a project developer evaluating competing gas supply options, you’re often making a multi-million-dollar decision without the tools to evaluate it objectively.
What an independent evaluation actually looks like
The first thing I do when reviewing a gas supply proposal is restate every price in terms of a common forward basis benchmark. Proposals often use different pricing indices, different delivery points, and different hedge structures — making direct comparison impossible unless you normalize them. Most buyers don’t have the market data or the modeling fluency to do this. Their suppliers do.
Second, I look at contract flexibility provisions — minimum takes, swing rights, force majeure language, termination clauses. These are where real risk lives, and they’re often buried.
Third — and this is especially relevant for new-build projects — I check whether the pipeline interconnection timeline aligns with the buyer’s demand schedule. A supply contract that is priced well but delivers six months after you need it isn’t a good contract.
Why this matters right now
Gas demand is surging. New build projects — data centers, industrial expansions, fertilizer facilities — are signing long-term supply agreements in a market they don’t fully understand. At the same time, suppliers are operating in a highly competitive environment where basis spreads, transport costs, and storage values are changing rapidly.
The buyers who navigate this well will be the ones who either develop real gas market expertise internally or bring in someone who already has it.
That’s the work I do at PraxiChain.
If you’re evaluating a gas supply proposal and want an independent read, I’m happy to talk. Contact me here: https://praxichain.com/contact-us/
