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Anyone Know How Oil and Gas Pipeline Contracts WorK?

1,684 Views | 8 Replies | Last: 6 yr ago by Ulrich
kawood82
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AG
I know that pipeline contracts for Oil and Gas are pretty complicated. They involve very often dozens of spreadsheets and tabs. Was curious if anyone has a good link to a write up on how all these contracts/agreements work? Trying to get a rough idea for curiosity/potential opportunity. Sorry if this is the wrong board couldn't find a great fit.
helloag99
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https://www.plainsallamerican.com/customer-center/pipeline-tariffs

Google pipeline tariffs
kawood82
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AG
Thanks!
TxAg20
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AG
I'm guessing those are going to be published shipping rates for common carrier lines.

What exactly are you interested in? I'm on the upstream side, but currently working on a midstream project that will include both common carrier and contract lines. Narrowing down the scope of your interest would help someone on here help you if such a person exists. If you're looking for common carrier published rates, you may already have what you are looking for.
kawood82
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AG
Basically I'm working on developing a high level overview of Oil and Gas pipelines for potential technology solutions (particularly smart contracts). I know from my audit days and various interviews/conversations that there are many parties involved with many different pay out scenarios. I'm trying to provide a high level overview of this.

The basic question I am trying to answer is how could this be modeled and automated by a computer in order to create less friction for the marketplace/customers.
Goose06
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AG
Gas pipeline contracts can be very complex if you get beyond interstate pipelines. If you are gathering wellhead gas or even just picking up rich gas at central gathering points, the company gathering the gas in many cases is also processing the gas, fractionating the liquids, marketing the gas and liquids, etc. Maybe the producer gets a guaranteed fixed liquid recovery or maybe they take actual recoveries or % of proceeds. The producer might have a right to reject ethane which changes the contractual liquid recovery structure. In other cases it's just a gathering fee or maybe a gathering and processing fee with volume redelivered to some other location.

Interstate deals are generally a lot less complex. There are accounting systems that handle all of the complexities.
Bibendum 86
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AG
Goose06 said:

Gas pipeline contracts can be very complex if you get beyond interstate pipelines. If you are gathering wellhead gas or even just picking up rich gas at central gathering points, the company gathering the gas in many cases is also processing the gas, fractionating the liquids, marketing the gas and liquids, etc. Maybe the producer gets a guaranteed fixed liquid recovery or maybe they take actual recoveries or % of proceeds. The producer might have a right to reject ethane which changes the contractual liquid recovery structure. In other cases it's just a gathering fee or maybe a gathering and processing fee with volume redelivered to some other location.

Interstate deals are generally a lot less complex. There are accounting systems that handle all of the complexities.
Actually, Texas intrastate gas contracts are pretty simple. You just pay the pipeline company about double what their service is worth and that's it.
Goose06
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AG
Untimed Down said:

Goose06 said:

Gas pipeline contracts can be very complex if you get beyond interstate pipelines. If you are gathering wellhead gas or even just picking up rich gas at central gathering points, the company gathering the gas in many cases is also processing the gas, fractionating the liquids, marketing the gas and liquids, etc. Maybe the producer gets a guaranteed fixed liquid recovery or maybe they take actual recoveries or % of proceeds. The producer might have a right to reject ethane which changes the contractual liquid recovery structure. In other cases it's just a gathering fee or maybe a gathering and processing fee with volume redelivered to some other location.

Interstate deals are generally a lot less complex. There are accounting systems that handle all of the complexities.
Actually, Texas intrastate gas contracts are pretty simple. You just pay the pipeline company about double what their service is worth and that's it.


I should have said if you get beyond regulated pipelines.
Ulrich
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If you have to ask texags, why are you doing a presentation on this topic?
Ulrich
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If I understand what you're talking about the software already exists, though I'm sure there are still many companies using volumetric data aggregated piecemeal from various systems and mashed together in excel to generate manual entries. I'm not sure that a vendor who doesn't know the industry or how the contracts work is going to sell much software though.
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