Overview of the Project
On August 6, 2018, EnLink Delaware Crude Pipeline, LLC (“Carrier”) issued a press release announcing an open season to obtain shipper commitments on its pipeline system (“Pipeline”) in the Delaware Basin, New Mexico (“Open Season”) that will gather and transport crude oil from origin points located in Lea County, New Mexico and Eddy County, New Mexico (“Origin Points”) to the Plains Thomas Station in Eddy County, New Mexico and the Plains El Mar Terminal and the P66 Gray Oak Pipeline in Loving County, Texas (“Destination Points”). The Open Season began at 8 a.m. Central Time on August 6, 2018, and will end at 5 p.m. Central Time on September 5, 2018.
Provided below is a summary of the key terms and conditions of service being offered in this Open Season. A more detailed explanation of the key terms and conditions of service is provided in the Open Season Procedures, which shall be available to any interested shipper upon the execution of a Confidentiality Agreement. The initial form of the Throughput & Deficiency Agreement (“T&D”) shall also be available to those interested shippers upon the execution of a Confidentiality Agreement.
- The Pipeline, which is expected to commence service by February of 2019, will provide gathering and transportation service from the Origin Points to the Destination Points.
- Carrier will retain at least 10 percent of Pipeline capacity for Uncommitted Shippers1 both in the context of this Open Season and during the term of the T&Ds, as further described in Carrier’s prorationing policy.
- Committed Shippers must execute a T&D and must commit therein to ship, or otherwise pay for failing to ship, a minimum volume of crude oil on the Pipeline over a specified period of time. A Committed Shipper’s volume commitment must be equal to or greater than 10,000 barrels per day. Committed Shippers may nominate incremental barrels in addition to their volume commitment, which may receive firm service, subject to availability of Pipeline capacity.
- The rates applicable to Committed Shippers will be set at a premium compared to the rates applicable to Uncommitted Shippers, and will consist of a separate rate for movements made on the gathering system portion of the Pipeline and movements made on the mainline portion of the Pipeline.
- The initial term of a Committed Shipper’s T&D will continue until February 1, 2029 (“Initial Term”). After expiration of the Initial Term, the Shipper will have the right to extend the Initial Term for two (2) additional five (5)-year Renewal Terms by notifying Carrier of such extension election at least one hundred twenty (120) days prior to the expiration of the Initial Term or the Renewal Term (as applicable). Following the end of both Renewal Terms (or if Shipper does not elect, within the applicable time periods, to extend the Initial Term or does not elect a second Renewal Term at the end of the first Renewal Term), the Term of the T&D will automatically extend for successive one (1) year periods until terminated by either Carrier or Shipper with written notice to the other at least one hundred twenty (120) days prior to the last day of the currently applicable Term.
- Committed Shippers will have a first right to obtain firm capacity on any expansion of the Pipeline.
- The T&D provides that Carrier shall have the right to add new origin points or destination points to the Pipeline during the term of the T&D and that each Committed Shipper shall have the right to ship products to or from the new points and agrees to support any filings necessary to effectuate the addition of such new origin points or destination points. Such revisions may include adding, at Carrier’s sole discretion, additional Destination Point(s) and/or Origin Point(s) on the Pipeline, services to or from which may be subject to a surcharge or additional charge.
- A Committed Shipper that executes a T&D will have the right to designate third party shippers to ship crude oil on behalf of the Committed Shipper, subject to the conditions set forth in the T&D.
Any party interested in obtaining a copy of the Open Season Procedures and/or the T&D should contact Keith Taylor at 713-739-3241 or firstname.lastname@example.org. Click here to download the Open Season Notice; click here to download the Confidentiality Agreement.
(1) Shippers that execute a T&D with Carrier are referred to as “Committed Shippers.” Shippers that elect not to execute a T&D with Carrier are referred to as “Uncommitted Shippers.”