Take-or-pay – a common rule for natural gas supply contracts with major customers. The supplier undertakes to supply natural gas up to the maximum volumes stipulated by the contract, and the customer undertakes in any case to pay for the pre-defined portion of these volumes irrespective of the volumes this customer effectively used for the given period.

Take-or-pay principle allows for mitigating the supplier’s sale risk of not receiving the return on investment the supplier had to make to assure the maximum volume of supplies. In other case, these risks had to be included into the pricing formula by the suppliers.