Gas Gathering Agreement

Drafts a producer-gatherer agreement governing gathering services from receipt point to delivery point, with FERC compliance, industry-standard measurement, and mutual risk allocation.

Prerequisites

Party information — legal names, state of formation, FERC designations or operator numbers
Well/acreage description — well locations, dedicated acreage boundaries, production data
System description — gathering infrastructure scope (pipelines, compressors, meters, treating facilities)
Commercial structure — fee type (per-MMBtu/Mcf, percentage-of-proceeds, or hybrid), initial rate, escalation
Regulatory posture — jurisdiction (state PUC, FERC-jurisdictional or non-jurisdictional), environmental permits
Desired term — initial term, renewal structure, conditions precedent

If any prerequisite is missing, pause and ask — do not assume.

Output Structure

1. Parties & Recitals

Full party identification with organizational capacity and regulatory IDs
Recitals: producer's gas ownership, gatherer's system ownership, regulatory framework, compliance intent

2. Definitions

| Term | Content | |------|---------| | Gas / Natural Gas | Quality specs, composition, heating value, contaminant limits | | Gathering System | Pipelines, compressors, meters, dehydration/treating facilities | | Point of Receipt / Delivery | Custody and risk transfer locations | | Gathering Services | Scope: gather, compress, dehydrate, treat, transport | | Dedicated Acreage | Geographic scope with metes-and-bounds or plat reference | | Volume/Measurement | API MPMS or GPA standards [VERIFY current edition]; pressure base, temperature correction, Btu specs |

3. Grant of Rights & Services

Exclusive vs. non-exclusive dedication within contract area
Gatherer rights: construct, operate, maintain facilities; easements/ROW
Producer obligations: deliver conforming gas; scheduling and nomination protocols
Gatherer obligations: accept and transport subject to capacity and quality specs
MVC, take-or-pay, or ship-or-pay terms if applicable

4. Rates, Fees & Payment

| Element | Details | |---------|---------| | Fee structure | Per-MMBtu/Mcf; percentage-of-proceeds; or hybrid | | Escalation | Fixed annual, index-based, or periodic renegotiation | | Billing | Monthly; payment due [X] days after invoice | | Disputes | Written notice within [X] days; undisputed amounts paid timely | | Late payment | Interest at [prime + X%] or statutory rate | | Audit rights | Producer audit of meters on [X] days' notice |

5. Term & Termination

Initial term: 5–20 years (capital recovery driven); commencement date and conditions precedent
Renewal: Auto-renew [X]-year terms unless [X] days' notice of non-renewal
For cause: Material breach ([30]-day cure), bankruptcy, regulatory prohibition
For convenience: If available; notice period and early termination fee
Post-termination: Decommissioning, final settlement, survival of payment/indemnity
Dedication release: Acreage releases on termination; specify tail obligations

6. Representations, Warranties & Covenants

Producer: Title/right to produce; no conflicting dedications; gas meets quality specs; compliance with production laws

Gatherer: Authority to operate; permits current; system capable of handling dedicated volumes

Mutual: Due organization; no conflicting agreements; environmental compliance; prudent industry practices

7. Indemnification & Insurance

Mutual indemnity for each party's negligence/willful misconduct
Knock-for-knock structure if applicable
Address separately: environmental contamination, personal injury, property damage, third-party claims
Insurance: CGL, auto, workers' comp, employer's liability, pollution liability — all at $[X]M minimums [VERIFY market standards]
Carriers rated A- or better (A.M. Best); additional insured; 30-day cancellation notice

8. Force Majeure

Covered: Acts of God, war, terrorism, strikes, governmental action, fire, flood, epidemic
Excluded: Economic hardship, market changes, commodity prices, lack of profitability
Prompt written notice with description and estimated duration; duty to mitigate
Extended FM (>[6–12] months): either party may terminate without liability

9. Governing Law & Disputes

Governing law: state where system primarily located
Tiered: (1) executive negotiation [30 days]; (2) mediation [30 days]; (3) binding arbitration under AAA Commercial Rules [VERIFY current rules]
Prevailing party fees if applicable; jury trial waiver

10. Miscellaneous

Notices by physical address and email
Assignment: consent required except affiliates or asset sales; runs with the land
Entire agreement; written amendments only; severability; counterparts

11. Signature Blocks

Entity-appropriate blocks with name/title/date
Notary acknowledgment if recordable; e-signature compliance

Guidelines

FERC jurisdiction: Confirm jurisdictional vs. non-jurisdictional status — provisions vary significantly [VERIFY current FERC gathering exemption standards]
State PUC: TX, WY, CO and others impose gathering-specific rules; confirm applicable state requirements
AAPL forms: Reference AAPL model gathering agreement where applicable [VERIFY current editions]
Environmental: Include SPCC, Clean Air Act, and state compliance covenants; address produced water if applicable
Dedications: Confirm consistency with upstream lease, JOA, and mortgage/lien requirements — conflicts with senior liens are a common defect
Measurement: Specify API MPMS chapter and GPA standard editions in definitions [VERIFY current citations]
Out-of-spec gas: Address gatherer's right to reject, curtail, or treat at producer's cost
All regulatory citations must be verified against current editions before execution