Crude Oil Transportation Agreement

Transportation and processing contracts remain one of the most complex oil and gas contracts. It is therefore not surprising that the calculation of the capacity charge has resulted in a number of commercial court litigations under the CRTA, one of which has been challenged in the Court of Appeal. (iv) the date on which the transport of this gas must begin without capacity; Removing M2E4 will reduce total growth investment by approximately $800 million in 2020, 2021 and 2022. Based on the projects currently sanctioned, we expect growth investments in 2020, 2021 and 2022, less contributions from joint venture partners, totalling approximately $2.8 billion, $1.6 billion and $900 million. These estimates do not include capital investments related to our offshore oil terminal (SPOT) project, which continues to be approved by the government. We do not expect to obtain SPOT`s approvals in 2020. Following the cancellation, Enterprise expects a write-down of approximately $45 million for the third quarter of 2020. At a time when many outdated transport and processing agreements had been developed, there was little consideration of managing cost-involved mechanisms. As with the CRTA, most cost-sharing plans do not come into effect until after 20 years. The first 20 years (or so) are governed by an agreed rate.

As a result, cost-involved mechanisms were not an immediate priority at the time of their development. This lack of prioritization now leads to various disputes over the interpretation and application of provisions that have not necessarily been imprecisely formulated. The two consequences are the agreement dc- gross transport contract 002-2014 In favour of the interpretation of TGTL: there are strong linguistic reasons to think that “the proposed transport time” in accordance with Article 4.6, point a) (vii), corresponds to the period between “the day when transport … “the estimated date on which it is proposed to end” in the sense of point 4.6 (iv) and v). This interpretation is consistent with the language of the clause and Article 4.6 does not mention any other “proposed promotion period.” Therefore, the maximum rate applicable at any time during the period covered by transport and processing agreements with third-party shippers (`TPP`) is set at 4.6 a) (vii) above. Quality specifications: the quality specifications that crude oil must have for pipeline transport, described in Schedule C of the agreement. The fact that transport and transformation agreements are developed and concluded over a long period of time poses particular challenges for draftsmen who wish to deal with events that could occur 20 years later. The transfer of a collective agreement-based mechanism to proportionate costs is a regular source of litigation concerning the categorization of costs. Many agreements provide limited guidelines for the implementation of the cost-involved phase, which, at the time of negotiation and implementation of the agreement, is often far removed from the immediate concerns of the parties. Second, the inflow of infrastructure funds and other new entrants into the ownership of transportation and processing facilities has altered the economic dynamism of the operation of these assets. Whereas in the past, traditional oil and gas companies may not have seen these assets as separate profit centres, but as a means of monetizing hydrocarbons, infrastructure funds and many other new entrants have invested in them as profit centres.

Infrastructure funds and many other new investors can therefore be expected to analyze existing agreements to ensure that they are exploited in a way that maximizes their return on this asset – which creates a risk of conflict – even if this does not correspond to the approach taken so far by existing parties.