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May 05, 2020
Brattle Publication Explores Disputes Connected to Hub-Indexed Gas Contracts in Europe

Over the last decade, hub indexation has largely replaced oil-indexed price formulae in natural gas contracts in Western Europe. This change addressed significant mismatches between the value of gas in the market and the prices in long-term gas contracts. While some have wondered if this shift will signal the end of gas contracts price disputes between buyers and sellers, it has only narrowed the scope of these disputes, not eliminated them entirely.

Brattle Principals Carlos Lapuerta, Dan Harris, and former Senior Associate Valentina Bonetti explore these issues in the new book, Gas and LNG Price Arbitrations: A Practice Handbook, Second Edition, edited by James Freeman and Mark Levy QC. In their book chapter, “The Potential for Price Disputes in Hub-Indexed Gas Contracts,” they explain that three main sources of conflict exist after parties adopt hub price indexation: transportation, market risk and margins, and market manipulation. The authors predict continued disputes related to gas contracts in Western Europe over the next few years.

The book is available for purchase here.