consider how and when pipeline by pipeline to System Use Gas is allow each pipeline scheduled too. operator to assess the The team came to a high credit worthiness of level view on allocation the counterparties. agreements, as detailed This will depend on in the right hand column. the platform and In forming this view, the auction design. team considered: Any reference to Whether shippers to be replaced ‘penalty’ could be deemed to be with in ‘charge’ a party to allocation relation to imbalance agreements in the and overrun. OTA. There were concerns this may be The team agreed for allocations: open to dispute. The allocation Pipeline operators may procedures terms in the also have to seek OTA could reflect APA’s at each general term per point to allow – ‘as deeming, and this multi-shipper agreement could be complex for or pro-rated by some. nomination’ as a starting Whether all allocation point. There is to be agreements could be transparency included as schedules requirements for in the OTA. The team specifying who to contact considered this was and where shippers likely to also be complex and time should go to sign up to consuming to set up, an allocation agreement. and may not be possible. Pipeline operators are not currently typically privy to agreements where they are not the allocation agent, and there could be confidentiality issues to add all these to the OTA. Further complexity could also be introduced if an allocation agreement is to be changed in the future if all shippers on the pipeline are automatically a party on every allocation agreement. Similarly, if shippers are party to all allocation agreements, there may be unnecessary reporting introduced. Regardless of the allocation agreement arrangement, shippers will be required to be set up in the pipeline operator systems at the relevant points prior to trading, and secondary shippers will have to
consider how and when System Use Gas is scheduled too. The team came to a high level view on allocation agreements, as detailed in the right hand column. In forming this view, the team considered: Whether shippers could be deemed to be a party to allocation agreements in the OTA. There were concerns this may be open to dispute. Pipeline operators may also have to seek at each point to allow deeming, and this could be complex for some. Whether all allocation agreements could be included as schedules in the OTA. The team considered this was likely to also be complex and time consuming to set up, and may not be possible. Pipeline operators are not currently typically privy to agreements where they are not the allocation agent, and there could be confidentiality issues to add all these to the OTA. Further complexity could also be introduced if an allocation agreement is to be changed in the future if all shippers on the pipeline are automatically a party on every allocation agreement. Similarly, if shippers are party to all allocation agreements, there may be unnecessary reporting introduced. Regardless of the allocation agreement arrangement, shippers will be required to be set up in the pipeline operator systems at the relevant points prior to trading, and secondary shippers will have to pipeline by pipeline to allow each pipeline operator to assess the credit worthiness of the counterparties. This will depend on the platform and auction design. Any reference to ‘penalty’ to be replaced with ‘charge’ in relation to imbalance and overrun. The team agreed for allocations: The allocation procedures terms in the OTA could reflect APA’s general term – ‘as per multi-shipper agreement or pro-rated by nomination’ as a starting point. There is to be transparency requirements for specifying who to contact and where shippers should go to sign up to an allocation agreement.
20170620-21-Standardisation-Project-Team-Meeting-No-8-Minutes.docx