Take-or-Pay Gas Contract

A take-or-pay gas contract is a long-term natural gas supply agreement in which the buyer commits to pay for a specified annual minimum volume whether or not the buyer actually takes delivery. The structure is the standard contractual form for large cross-border gas supply arrangements because it secures the producer's cash flow against the multi-billion-dollar field development cost and gives the buyer price and supply certainty.

Israel's principal take-or-pay contracts include the $35 billion Leviathan-Egypt agreement (130 bcm through 2040, signed August 2025) and the long-running Leviathan-Jordan NEPCO contract (approximately 3 bcm annually under a 2016 framework). Both contracts survived the February-April 2026 Hormuz war shutdown of Leviathan and Karish, though force majeure provisions were invoked.

Full context: The Jordan Gas Contract That Survives Every Political Cycle.