park and loan services - link® system application 2011/c...link ® system key points on pal...

LINK® System Customer Interface

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Park and Loan Services

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Key Points on PAL Services

• The Park and Loan (“PAL”) service is a method available to shippers to manage imbalances and reduce cash-out exposure.

• PAL may be used to “park” extra gas or borrow needed gas. In other words, PAL may be used to address a Due Shipper (DS) or Due Pipe (DP) imbalance. For example, a shipper could move a DS balance into a park, or resolve a DP imbalance by taking a loan.

• As an interruptible service, PAL will be available only when

operationally feasible.


Basic Structure of Park and Loan

R/D

PAL POT

The park and loan service is a point specific service. All park and loans will

be “anchored” to a specific point.

Pipeline


Basic Structure of Park Deals

R/D

PAL POT

To park gas, a nomination is submitted under a park deal to move gas from the park’s

anchor point to the corresponding Park and Loan Point of Transaction (PAL POT). For

example, on TE, a park from a receipt point in South Texas must use the South Texas

PAL POT. To remove the gas from a park, a “park withdrawal” nomination is

submitted under the same park deal to move gas from the corresponding PAL POT back

to the anchor point.

Daily park charges will accrue as long as a park balance exists. No transportation,

injection, or withdrawal charges are assessed when moving gas into or out of a park.

Park Park

Withdrawal

Pipeline


Basic Structure of Loan Deals

R/D

PAL POT

To borrow gas, a nomination is submitted under a loan deal to move gas from the

corresponding PAL POT to the loan’s anchor point. For example, on TE, a loan to a

delivery point in M3 must use the M3 PAL POT. To payback a previous loan, a loan

payback nomination is submitted under the same loan deal to move gas from the loan’s

anchor point to the corresponding PAL POT.

Daily loan charges will accrue as long as a loan balance exists. No transportation,

injection, or withdrawal charges are assessed when moving gas into or out of a loan.

Loan Loan

Payback

Pipeline


Valid Park and Loan Points

Company Operational

Impact Area

Park and Loan POT

TE STX 79611

TE ETX 79612

TE WLA 79613

TE ELA 79614

TE M1 24” 79615

TE M1 30” 79616

TE M2 24” 79617

TE M2 30” 79618

TE M3 79619

AGT n/a 87000

M&N US n/a 37003

ETNG n/a 50010

SESH n/a 89100

Here is a list of the PAL POTS used for the park and loan service:


Park and Loan Transaction Types Four transaction types support park and loans. TT 26 and 27 are used

with park deals, while TTs 28 and 29 are used with loan deals.


Park Nomination Example

Here is an example of

nominating from a

receipt point (meter

79618) to the Park POT

in M2 30”(79508). The

nomination was made

under a park deal, as

indicated by rate

schedule IPS

(Interruptible Park

Service). The

transaction type for a

park is TT 26. All

other park and loan

nominations look very

similar to this one.


Nominating Parks and Loans

• Nomination Limitations:

• A shipper cannot nominate in excess of their deals’ MPQ (Maximum Park Quantity) or MLQ (Maximum Loan Quantity).

• A shipper cannot submit a nomination which would result in a negative park or loan balance.

• Shippers can move gas between parks and loans that are anchored at the same point without being assessed transportation charges.

• To move gas between parks and loans which are anchored at different points, transportation is required.


Using PAL with TABS Pools (TE Only)

Service Point

PAL POT

On TE, to move gas between a TABS pool and a PAL POT, the POT must first

be "anchored" to a service point. The PAL POT and the service point must be

in the same zone. Gas can then be nominated from the service point to the

PAL POT by either a park nomination (or, in the case of a loan, a loan

payback). Moving gas out of the PAL POT is simply the reverse of putting

gas into it. Moving gas out of the PAL POT occurs by a park withdrawal (or

in the case of a loan, a loan nomination).

Park or

Loan Payback

Loan or

Park Withdrawal

Pipeline


Using PAL with TABS Pools (TE Only)

Service Point

PAL POT

When moving gas from a TABS pool into a PAL POT (regardless of whether the nomination is a park or a loan

payback), the holder of the TABS pool must nominate under one of their PAL deals. To implement this

requirement, the upstream contract number must be populated with any TABS contract held by the shipper entering

the nomination. The system will then identify the holder of the TABS contract by automatically filling out the

name of the upstream party. A on-line nomination validation will then check to see if the TABS owner is the same

as the owner of the PAL deal.

When moving gas from a PAL POT to a TABS pool (regardless of whether the nomination is a loan or a park

withdrawal), the downstream contract number must be populated with any TABS contract held by the shipper. The

system will then identify the holder of the TABS contract, and verify that the TABS owner is the same as the owner

of the PAL deal.

Pipeline

TABS contract in

upstream contract field.

TABS contract in

downstream contract field.


Park and Loan is Lower in Priority than

Interruptible Transport

Note that park and loan nominations may be scheduled off because they are lower in

priority than Interruptible Transport (IT). Nominations of new parks and loans, or

nominations to remove existing parks or pay back existing loans may be scheduled off.

However, if a shipper is unable to remove an existing park or repay an existing loan,

they have several options, depending on the pipeline:

Option 1: Suspend the charge and extend the term of the park or loan deal by one day (the default).

Option 2: Trade their park balance with a loan balance belonging to another shipper (or trade their loan balance with a park balance belonging to another shipper) which resides at the same anchor point.

Option 3 (AGT Only): Cash out the park or loan balance at current market prices.


Notice Requirements

• A notice from the pipeline to reduce or eliminate nominations of new parks or new loans does not require any lead time.

• If operational conditions warrant, the pipeline can require shippers to remove existing parks or repay existing loans. For TE, M&N US, ETNG, and SESH the required lead time for this notice is:

24 hours for M&N US, and ETNG

72 hours for TE

Note that under the AGT tariff, lead time is not required when issuing a notice to remove existing parks or replay existing loans.

Under the SESH tariff, time stated per notice with a minimum of 24 hours.


Penalties for Violating PAL Notices

• If TE, AGT, and M&N US shippers do not comply with the notice to

remove parked gas or replay loans, and if operational conditions

warrant, the pipeline can:

Confiscate Parked Gas

Cash-out Loaned Gas at 150% of Market

• If ETNG shippers do not comply with the notice, and if operational

conditions warrant, the pipeline can:

Cash-out Parked Gas at 90% of Market

Cash-out Loaned Gas at 110% of Market


Only Allocated Volumes Count!

One key point about parks is

the following: The amount of

gas allocated to a park is

determined by the PDA at

the park’s anchor point.

Additionally, there are no

imbalances on park

nominations, so whatever is

allocated to the deal at the

deal’s anchor point is the

amount of gas posted to the

deal’s park balance.

For example, lets say a

shipper nominates to move

1,000 Dth of gas to be put

into a park, and that this

amount is scheduled. At the

end of the day, only 900 Dth

was allocated to the deal at

the deal’s anchor point. In

this case, only 900 Dth of

gas will be parked.


Only Allocated Volumes Count!

The loan works the same

way. The amount of gas

allocated to a loan is

determined by the PDA

of the loan’s anchor

point. Additionally,

there are no imbalances

on nominations made

under deals, so whatever

is allocated to the deal at

the deal’s anchor point is

the amount of gas posted

to the deal’s loan

balance.


New Contracts and Deals • All Parks and Loans for a shipper will be set up under one “parent”

contract. This contract will contain only minimal information.

• Parks and Loans will then be executed as exhibits to the parent contract, and set up as "deals" in LINK. These will have deal-specific information, consisting of:

• The only two valid points on the deal - the anchor point, and the appropriate PAL POT)

• The deal’s MPQ or MLQ

• The effective begin and end dates of the deal

• The deal rate


Viewing Existing Park and Loan Deals

The Deal List screen will

list all valid park and loan

deals. You can select any

row to bring up details on

any individual deal.

Note: Deal List screen

can only be viewed in the

following business units:

Bobcat Gas Storage

(BGS), MHP Moss Bluff

(MBHP), Egan Hub

Storage (EHP), Ozark

Gas Transmission (OGT),

and Steckman Ridge (SR)


Termination of Parks and Loans

If a park or loan deal reaches its termination date, and there is still a balance, the park or loan balance may be subject to one of the following, depending on the pipeline and operating conditions

For TE and M&N US Parks:

If operating conditions warrant, a park balance which exists after a deal's termination date can be confiscated. Otherwise, the park will be subject to the maximum tariff rate until the balance is removed.

For TE and M&N US Loans:

A loan balance which exists after a deal's termination date may be cashed-out, regardless of operating conditions.


Termination of Parks and Loans For AGT Parks and Loans:

A park balance which exists after a deal's termination date can be confiscated, or a loan balance can be cashed out at 150% of market. Confiscation or cashout is not dependent on pipeline operating conditions.

For ETNG Parks and Loans:

A park or loan balance which exists after a deal's termination date will be subject to the maximum tariff rate until the end of the month, at which time it will be cashed out. Parks will be cashed out at 90% of market, while loans will be cashed out at 110%. These provisions are not dependent on pipeline operating conditions.


Termination of Parks and Loans For SESH Parks and Loans:

Any parked quantity not nominated for removal within the time frame specified by

notice from the pipeline or a minimum of 24 hours will become the property of the

pipeline. Any loaned quantities not nominated to be returned within the time frame

specified by notice from the pipeline shall be sold to Shipper at Pipeline’s Cashout

Price at the >25% Imbalance Level for Imbalances Due Pipeline.

park and loan services - link® system application 2011/c...link ® system key points on pal...

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