Gas Storage Agreements
Primer #gsa #gta #psa #natural gas #negotiations #processing #gathering #storage Overall, storage is a very good exercise in stretching software capabilities. In my experience, the multiple views you can have on a memory (from a market point of view, an injection is a short position, but from a memory point of view, it increases the balance), and the complexity of contractual conditions and volume movements are not fully covered in any system. There are three main aspects of a storage contract: the final step in the midstream value chain is gas storage. A gas storage contract is an exchange of funds for the right to store natural gas in a reservoir for a certain period of time (usually a tank of depleted salt submarines or groundwater). A gas storage operator also receives funds for the provision of gas storage services (compensation, pressure maintenance, etc.). Under a model of advanced razors (contract to meet seasonal demand), natural gas storage cannot be underground, but stored cryogenic in large tanks. Both models have terms and conditions similar to those of the other service agreements mentioned above (tariffs, fees, inventory commitments, etc.). The last point I will mention in the ATGs is the need to understand the balance. While this could be dealt with in another agreement, it is sometimes included in the GTA. A gas offset determination is the method used to confirm that a producer/shipper`s entry into the line corresponds to its actual deliveries. Since additional services are almost always billed in contracts such as this, the manufacturer/shipper will negotiate the payment of a fee to the carrier in order to hold the balance. The timing of these services is also crucial. The calculations can be done from one hour to a month.
The more unbalanced a system is, the greater the impact on procedural efficiency and cash flow. If necessary, Gazprom leases additional gas storage capacity to third-party companies. Intrinsic Value – This is the price difference that the owner of the memory object can achieve in light of the current spot price. The futures price is intrinsic value. Intrinsic value is influenced by the level of injection and collection relative to the stock. As a result, seasonal spreads primarily affect the intrinsic value of storage, as a large margin between summer and winter prices offers a higher value for the storage service. There are currently three large independent listed storage companies, AAP Natural Gas Storage (PAA), Niska Gas Storage Partners (NKA) and Crestwood Equity Partners L.P. (CEQP).
AAP is part of the Alerian MLP ETF (AMLP), while CEQP is part of the Global X MLP ETF (MLPA). What is unique about a gas storage project is that the ancillary and real estate rights must be purchased jointly.