Counterparty risk is a significant concern in natural gas hedging transactions. This article explores strategies for identifying and managing this risk, including thorough due diligence, credit assessments, and the use of collateral agreements. Contractual safeguards, such as margin requirements and netting agreements, can also mitigate counterparty risk. The article provides practical examples of how companies manage counterparty risk to ensure the effectiveness of their hedging strategies and maintain financial stability.