NAESB Natural Gas Supply Contract Pricing

In a dispute involving a Marcellus-area, long-term North American Energy Standards Board (NAESB) natural gas supply contract (Antero Resources Corporation v. South Jersey Resources Group LLC and South Jersey Gas Company), Brattle evaluated whether a Market Disruption Event had occurred. We reviewed the contract’s specific criteria for such an Event and analyzed the contemporaneous evidence regarding the underlying transaction composition of published natural gas price indices. Brattle also examined natural gas market conditions in the Marcellus area and the contracting parties’ pipeline transportation arrangements. Based on analysis of the evidence, Brattle concluded that a Market Disruption Event had not occurred and that the plaintiff was entitled to damages as a result of short-paying by the defendant.