Commercial Terms in Pipeline Transportation & Gas Proce

Commercial Terms in Pipeline Transportation & Gas Proce Commercial Terms in Pipeline Transportation & Gas Proce - Start

2017-09-01 77K 77 0 0

Download Presentation

Commercial Terms in Pipeline Transportation & Gas Proce




Download Presentation - The PPT/PDF document "Commercial Terms in Pipeline Transportat..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.



Presentations text content in Commercial Terms in Pipeline Transportation & Gas Proce

Slide1

Commercial Terms in Pipeline Transportation & Gas Processing Agreements

Dwight Howes

Partner

Reed

Smith LLP

dhowes@reedsmith.com

412-288-5933

Slide2

Long Term Firm Capacity Pipeline Transportation Agreement

Commercial terms for natural gas and natural gas liquids contracts are same – specifications are

different

A separate Interconnection Agreement may be

necessary

No Interconnection Agreement necessary if Receipt Point is the outlet flange of the processing plant or the interconnection between the gathering system and the

pipeline

Specified contract

volume

Shipper pays for capacity whether used or

not

No force majeure out for Shipper and limited remedies for shipper for Transporter force

majeure

Usually provides for making up volume shortfalls with deliveries above firm capacity if capacity available

Slide3

Long Term Firm Capacity Pipeline Transportation Agreement

Capacity shortfall make up typically limited in time

Usually cannot make up shortfalls with third party gas/product

Term typically 15 – 20 years

If FERC regulated, rates in accordance with tariff, adjusted annually by the FERC Index (but never below original rate)

If not FERC regulated, rate specified in contract, subject to annual adjustment (but never below original rate)

Monthly payment

Creditworthiness – Transporter can request adequate assurances of performance – letter of credit, pre-payment, etc.

Gas/Product specifications – heat content, water, other impurities

Slide4

Long Term Firm Capacity Pipeline Transportation Agreement

Indemnity for damage to pipeline for gas/product not delivered in accordance with spec

Shipper indemnifies Transporter for any encumbrance on title

Transporter indemnifies Shipper for third party claims due to Transporter negligence while gas/product under Transporter’s control

Mechanism for verifying meter accuracy and accounting for previous inaccuracies

Right for Shipper to observe meter verification

Transporter charges Shipper pro rata share for lost gas/fuel gas

Often a “most favored customer” provision

Significant limitations on Transporter’s liability

Slide5

Long Term Firm Capacity Gas Processing Agreement

Many terms similar to long term pipeline

transportation

agreement

Processor re-delivers residue (processed) gas to Producer at the outlet flange of the processing plant (interconnection with pipeline)

Processor will market for Producer’s account Producer’s raw make or fractionated products

Producer has right to take in kind

If Producer opts to take in kind, but fails to do so, Processor has right to sell

Per gallon fee or variety of per gallon fees that may off-set each other, depending on degree of processing/fractionation

Ethane as purity product or mixed with propane


About DocSlides
DocSlides allows users to easily upload and share presentations, PDF documents, and images.Share your documents with the world , watch,share and upload any time you want. How can you benefit from using DocSlides? DocSlides consists documents from individuals and organizations on topics ranging from technology and business to travel, health, and education. Find and search for what interests you, and learn from people and more. You can also download DocSlides to read or reference later.