اثر حذف شرط مقصد بر تابع سود فروشنده در قراردادهاي بلندمدت گاز(LNG)

The Impact of Deletion of Destination Clause on Sellerʹs Profit Function in Long-Term Gas Contracts

The European Commission and Algeria, on 11th July, announced that they had reached an agreement based on the Sonatrachʹs concession to delete the destination clause from all Algeriaʹs existing LNG contracts with the European buyers so such LNG contracts would not include similar clauses in the future. The destination clause assures sellers that the buyers could not resale the purchased cargo in elsewhere in sellerʹs market territory and provides circumstances that sellers could benefit from market division and price discrimination. Therefore deletion of destination clause from LNG contracts could affect sellerʹs profit function. This study shows that inclusion of destination clause in LNG contracts with Asian countries has considerable impact on the sellerʹs profit function since these countries enjoy a different energy consumption model. But for European countries, because of deregulation and liberalization of markets leading to a more competitive, comparable and homogenous market structure, applying or deletion of the destination clause would not affect sellerʹs profit function. The analysis shows that the producers would profit from price discrimination if transport costs or demand elasticity in the regions are asymmetric.