The Crude Oil Logistics Committee Established in 1993

Forecasting Procedures - Section 5

Initial Shipper Notice of Shipment

5.1 Supply - App.F. Adjusted Battery Receipts (Form C - to each shipper)

Shippers shall use the "App.F. - Adjusted Forecast" total provided by the receiving facility or pipeline on the Form C forecast.

Shippers shall provide the downstream system (feeder pipeline) and upstream system (gathering pipeline, other connected feeder pipeline, truck terminal and cleaning plants) with a notice of shipment, that shall confirm acceptance of deliveries from the upstream system. This notice of shipment shall be equal to the volume provided to the shipper on the Form C forecast.

5.2 Supply - Shipper To Shipper Transfers

Where transfer volumes between shippers within a facility or a gathering or feeder pipeline do not balance, the facility or pipeline shall contact the shippers involved. If unable to resolve the imbalance, the facility or pipeline shall ensure that the transfer volume is set at the lower of the two parties stated volumes. The facility or pipeline shall notify the two shippers of the volume the facility or pipeline has set for the transfer. No change shall be allowed to this forecast transfer volume once the downstream trunk line(s) have been notified of verified volumes until the affected receiving trunk lines have completed their apportionment calculations and have announced apportionment levels. At that point, any changes made shall be subject to post-apportionment rules on the affected trunk line(s).

Where a shipper delivers from a facility or pipeline to more than one disposition point or to one disposition point, but to more than one receiving party, the shipper shall designate one ore more delivery points or recipients to be swing disposition(s). Any change in such a shipper's supply shall be reflected in the shipper's disposition to the designated swing disposition(s).

If the shipper has not designated a swing disposition, the facility or pipeline shall prorate any change in supply over all the indicated disposition points.

5.3 Supply - From Inventory

Shipper's balance (or Equivalent) inventory imbalances (other than inventory that the shipper/producer has in tankage) shall be handled in the month immediately following (e.g. March imbalance to be handled in April business). The facility or pipeline shall make known to the shipper, as soon as possible, any imbalance and the shipper shall adjust supply and disposition accordingly.

Where a facility or pipeline chooses another method for dealing with shipper's balance (or Equivalent) imbalances, that facility or pipeline shall notify all of its shippers (or non-shipper, customers) and the Crude Oil Logistics Committee of the method it has chosen for dealing with these imbalances. The facility or pipeline shall then consistently apply its published method across its system. No changes to this method shall be made without prior written notice to all affected parties.

Any inventory the shipper/producer has in tankage shall be identified separately on the original Form A forecast and/or notice of shipment. This volume shall be subject to acceptance and/or verification by the receiving facility or pipeline if an increase in capability is required to accommodate the inventory volume. If the inventory does not require an increase in capability, it shall be accepted without verification as part of current production.

5.4 Dispositions

Dispositions shall be identified by the shipper on the initial notice of shipment to the facility or pipeline and shall equal total identified supply.

Where the supply is not fixed, the shipper shall identify at least one "swing" disposition.

5.5 Imbalance - Supply versus Disposition

Failing a balance between shipper indicated supply and disposition, the facility or pipeline shall attempt to resolve with the shipper. If unable to resolve within twenty-four hours, the facility or pipeline shall adjust the supply and/or disposition, at the facility or pipeline operator's discretion, to bring volumes into balance. This may result in either shut-in volumes (see Section 5.6) or a reduced delivery for the shipper at one or more of the shippers indicated disposition points.

If the shipper involved has indicated a delivery to one or more swing disposition(s), the reduction in supply shall be reflected in the shipper's disposition to the swing disposition(s).

If the shipper is not delivering to one or more swing disposition(s), the facility or pipeline shall prorate the reduction in supply over all the shipper's indicated disposition points.

5.6 Shut-In

Where shut-in is required for lack of sales or pipeline apportionment, shippers shall advise facilities or pipelines of volumes and locations to be reduced. Lacking shipper direction, shut-in shall be carried out pro rata at shipper connected locations.

Pipelines shall also advise the connected facility operator of reduced production levels.

Feeder Pipelines shall hold oil out of the system presumably due to contravention of tariff rules and regulations (i.e. invalid Notice of Shipment). Based on available information pipelines shall call on pipeline-connected facility operators to restrict deliveries. Unless advised by the shippers otherwise, volumes shall be prorated to facilities delivering crude in the name of the problem shipper or prorated to a pre-arranged facility shut-in schedule as submitted by the shipper in advance, and agreed to be the feeder pipeline.

Pipeline connected battery operators, truck terminal operators and pipeline connected cleaning plant operators shall hold oil out of the pipeline as instructed by the pipeline. In addition they shall determine the sources of production behind shipper volumes and either advise producing entities to reduce volumes or advise producer volumes shall be held in facility tankage. Additional suggested voluntary procedures are detailed in Section 5.7.

Producing battery operators (producers), on advisement by the pipeline connected battery operator, shall cut volumes to equal the offending shippers, volume and advise all shippers affected.

5.7 Battery Operators - Shut-In

These additional procedures are suggested to enable affected parties to be treated equitably.

Pipeline connected battery operators, truck terminal operators and pipeline connected cleaning plant operators:

  • Production entities should be selected for reduction on the basis of having the least impact on the volumes of other shippers (i.e. high shipper interest properties first).
  • In the case of joint working interest properties the total property should be restricted by the required volume. Working interest owners (or unit participants) should transfer oil or store oil amongst themselves to satisfy the working interest agreements and minimize the effect on each other.
  • Production interest ownership at the well, not battery operational control, should be the determining factor in allocating shut-in.

Producing Battery Operators (Producers):

  • Contact their shipper(s) to ascertain why they are not performing their required duties.
  • Meet with shipper(s) and pipeline-connected facility operator to understand why and how action was taken.
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