The recent casualties of gas markets: how to avoid becoming one

A list of four recent gas marketing bankruptcies in Canada and their current status was reviewed. In 1996 and in early 1997 some gas marketers found themselves with an open position as a result of insolvency of their suppliers. Consequently, they faced huge losses in a market where commodity prices were rising significantly. A number of practical suggestions to deal with the losses and forestall receivership and/or bankruptcy have been discussed. One of the most important considerations is to protect oneself from the outset, i.e. to arrange for satisfactory security for performance. Dealing only with reputable parties and contracting for short term deals are some of the other measures that a marketer can take in advance. Security for performance was described as the most important issue in gas contracting today. It was seen as the only way to ensure that a company would not have to deal with insolvency problems. The legal implications of bankruptcy and insolvency were also discussed