Rules for NGLs Taken In-Kind by Customers
Safe and Reliable Operations. In order to provide safe and reliable operations, Blue Racer Midstream, LLC (“BRM”) has developed these rules that are applicable to anyone marketing, e.g., customers of BRM and/or their marketers (jointly, “Marketer”), natural gas liquids (“NGLs”) at the tailgate of the Natrium fractionation facility. These rules have been developed to insure that those marketing NGLs have a reasonable opportunity to do so without adversely impacting plant operations or other customers. Failure to follow these rules may result BRM denying access to Natrium to remove NGLs. These rules are subject to change by BRM from time-to-time.
Qualifications. Anyone desiring to market NGLs out of Natrium must be and remain a qualified marketer as determined in BRM’s sole but reasonable discretion. While more than one qualified marketer may be appointed, BRM requires that customer provide a single point-of-contact who is responsible for communication and coordination regarding all of customer’s NGLs taken in-kind.
Facility Access and Use. Before being granted access to Natrium to remove NGLs, Marketer is required to enter into a Facility Use Agreement (provided separately) with BRM.
Annual Forecast. To facilitate planning by BRM, customer shall submit an annual projection of NGLs to be taken in-kind that includes the volume of NGLs to be removed each Month broken down by pipeline, rail and truck. This forecast shall be submitted to BRM by February 15th of each year and shall cover the time period from April 1 of the same year to March 31 of the following year. BRM will review the forecasts from all Marketers and then confirm for each Marketer whether they need to adjust how they plan to sell the NGLs. Marketer thereafter may submit a request to modify a previously-confirmed plan for a given Month by submitting a written request to BRM by the 15th day of the previous Month, and BRM will allocate available capacity proportionately among requesting parties.
Ratable Removal of NGLs. Marketer is responsible to make timely arrangements for the removal of their NGLs on a ratable basis throughout each Month.
Options to Remove In-kind NGLs. NGLs may be removed at the tailgate of the fractionator by rail car, truck, or pipeline, based on availability and at BRM’s operational discretion. Barge access may be granted upon request at BRM’s sole discretion.
- For NGLs removed by rail cars or trucks, the condition and the handling of such rail cars and trucks must comply with the standards required by Title 49 of the Code of Federal Regulations, including such standards applicable to the type of rail car and truck to be used for removal of NGLs. For NGLs removed by rail cars, BRM shall notify Marketer of the number of rail cars required to be kept in inventory at Natrium each Month.
- NGLs removed by pipeline must be done in accordance with each pipeline’s tariff. This includes, but is not limited to following batching schedules, making timely nominations to BRM and the pipeline companies of the volumes planned to be moved by pipeline and for making timely changes to nominations when volumes changes.
Procedures to Remove NGLs. Marketers are responsible for making arrangements for removal of all NGLs in accordance with the following procedures:
- No later than two Business Days prior to the 15th Day of each Month, Producer or Marketer must notify BRM of the estimated volume of gas (in Mcf) by day to be nominated for delivery to BRM for the next Month (“Production Estimate”).
- Within 3 business days of receiving the Production Estimate, BRM will notify Marketer of the net amount of NGLs that will need to be removed during the next month. The net amount will be determined based on the Production Estimate; the historical composition of each customer’s gas, adjusted for known or reasonably anticipated changes; plant recovery factors for each NGL; and, any NGL imbalance from previous Months.
- After notification by BRM of the amount of NGLs to be removed during the next Month, Marketer shall make arrangements for them to be removed ratably from the tailgate of the Natrium Plant. Marketer must coordinate such arrangements with BRM as follows:
- No later than the 15th day of the Month, Marketer must nominate to BRM the estimated daily quantity of each NGL that Marketer desires to have removed during the next Month broken down by rail, pipeline and truck. On or before the 25th day of the Month, BRM shall provide Marketer with the daily quantity of NGLs to be removed in the following Month. Once notified, Marketer shall adjust the quantities of each rail, pipeline, and truck nomination as needed.
- Marketer is responsible for making timely nominations to all downstream pipelines. BRM will notify Marketer of the volume that has been confirmed. To the extent a pipeline nomination is not accepted, alternate arrangements need to be made by Marketer.
- After the beginning of the Month, a Marketer may request that its initial pipeline nomination and schedule be changed. BRM will accommodate such requests to the extent it is reasonably practicable without adversely impacting service to other customers or plant operations.
- Loading will be done in accordance with BRM’s loading schedule and if Marketer’s planned loading cannot be accommodated, Marketer must make alternative arrangements. BRM is under no obligation to alter its operations or staffing levels solely to accommodate producer TIK requests, e.g., add loading staff or work overtime.
- All loading is subject to the availability of a Marketer’s NGLs at the time scheduled to be loaded and to operational issues that may cause a delay or change in planned loading.
- Any NGLs not ratably shipped by pipe or loaded onto rail cars or trucks by Marketer may be sold by BRM.
- If Marketer does not provide adequate cars whose last content matches the NGLs to be loaded, BRM may use any available car of Marketer to load NGLs and Marketer will be responsible for any contamination, e.g., the overall product in the car becoming off spec.
- Trucks will be loaded on the day of arrival and rail cars will be loaded based on the approved schedule, to the extent operationally feasible.
- In the event that a rail car or truck does not arrive timely as provided in the approved schedule or is not in an acceptable condition, the NGLs will be handled as provided in the producer’s processing agreement, the Facility Use Agreement or as otherwise mutually agreed in writing.
- Upon notification by BRM that a rail car or has been loaded and is ready for release, or is empty due to an interruption in production, Marketer will enter the BOL into the Ship CSX system to move such rail car within 12 hours.
- If Marketer utilizes a pipeline to remove NGLs:
- Unless other arrangements are made, Marketer will remove its NGLs utilizing Marketer’s capacity rights on such pipeline.
- Marketer is responsible to manage pipeline imbalances each day.
- Marketer is responsible for all costs, fees and obligations associated with transporting its NGLs from the tailgate of the Natrium fractionator to and through the pipelines. Such costs and obligations may include, but are not limited to, those related to transportation, scheduling, marketing, imbalance fees and penalties, line fill, and other requirements.
- Any interruption to transportation or curtailment of transportation on a product pipeline through which Marketer has elected to transport its NGLs may, at BRM’s reasonable discretion, require (1) an alternative mode of transportation, and/or (2) a reduction in the production of such NGLs.