A Model for Price Optimization in Iranian Gas Sales Agreements Based on Value of Volume Flexibility Analysis

Natural gas sales and purchase agreements include a variety of contractual terms in commercial, financial, technical, and legal areas. Some of these are volume constraints. These terms have a value of flexibility and the degree of flexibility of these volumes ​​has a monetary value and influences the financial regime of the contract, including the applicable gas price.The purpose of this study is to optimize contractual volume flexibility and gas prices, while determining the optimal flexibility range for the constraints, focusing on gas export data to Turkey for the period 2010-2019.   We optimize our mathematical model based on the cost-plus approach. The results show that the optimal output values for the variables of minimum and maximum daily contract quantities, percentage of take-or-pay and make-up gas quantity and carry forward will lead to optimal contract prices.