Aggregate Capacities Exceeding 20 MMTPA and 1 BCMA
Our lawyers have structured, negotiated, drafted, and advised on the implementation and amendment of a range of pipeline agreements, including:
Gas Pipeline Investment Agreement
An agreement with a sovereign state for the funding, design and construction of a gas trunk pipeline. The key issue for the investors was to ensure that no obligation or liability with respect to the pipeline arose prior to all permits, licenses, and approvals being in place, together with all contracts for the commercial operation of the pipeline.
Transportation Agreements for crude oil through cross-border pipelines
Agreements for the transportation of crude oil through trunk pipelines in the CIS. For crude from the same field, this has involved a joint transportation structure that eliminates consortium members achieving different netbacks - which would result in distortion to cost recovery - while allowing the individual owners of the crude to lift independently at the marine terminal, affording each consortium member the maximum flexibility in its trading activities. Such agreements tend to be closely linked to marketing agreements and managed by a joint operating or marketing company as agent for the owners of the crude. As the joint transportation mechanism invariably involved extensive under- and over-lifting, one of the complexities involved ongoing adjustments to lifting entitlements and tying those in to entitlements to crude under the production sharing contract. The agreements included provisions for the exchange of loading windows, the co-loading and pooling of entitlements and the co-loading of entitlements from other fields.
Preferential Pipeline Capacity Allocation Contracts
Agreements for the allocation of preferential capacity rights in a pipeline, held by the investors in the pipeline. In landlocked CIS countries, access to pipelines is fundamental to the viability of a project. Without such access secured, investment risk may be untenable. Guaranteed access rights, subject to line-fill and ship-or-pay conditions that are manageable by a producer and shipper should thereforebe agreed early on in the investment process.
Pipeline Interconnection Agreement
An agreement for the connection of two trunk-pipelines. The main issues were to ensure that the connections were designed, constructed and maintained so as to work smoothly together without hindering the flow of crude, with a clear allocation of liability.
Marine Lifting Agreements
Agreements for the lifting of crude from marine terminals. A particular difficulty in loading from CIS marine terminals can be the timing of the arrival of vessels during the inclement winter months, where missed loading windows could lead to the curtailment of acceptance of crude into a pipeline and the curtailment of production.
Fair Billing Policy
During the first six months of 2018 we carried out a survey of senior lawyers and general counsels in the oil industry and other industries. As none of these were clients, they were able to be frank.
The level of annoyance with services provided by the law firms was shocking. Most of the grievances boiled down to billing practices - in particular being billed for time that it was felt was unfair to bill for - such as internal law firm briefings, the client educating the firm and the client improving contracts drafted by the firm.
To address these concerns we have implemented an 8-point fair billing policy, under which we do not bill for time spent on these activities. This has been very well received and makes for a much better relationship.