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Just in Time: EDI for Gas Nominations

Fortnightly Magazine - February 1 1996

a.m. Tuesday). If the shipper has already initiated flows under the contract, it can start to take at any time, but must initiate receipts within 8 hours of deliveries, or be subject to shutoff.

At 10 a.m. Monday, the shipper nominates deliveries to begin any time after the start (12 p.m. Monday) of the pipeline's delivery gas day one (12 p.m. Monday to 12 p.m. Tuesday). Meanwhile, the gas keeps flowing at full contract for the rest of receipt gas day zero and on into receipt gas day one (8 a.m. Tuesday to 8 a.m. Wednesday). At the end of delivery gas day one (12 p.m. Tuesday), the pipeline reads the meter and informs the shipper that it must schedule a specific amount of gas to flow on receipt gas day two (8 a.m. Wednesday to 8 a.m. Thursday), equal to the quantity that flowed on delivery gas day one. The shipper then nominates this quantity by 3 p.m. on delivery gas day two (3 p.m. Tuesday) to commence at the start of receipt gas day two (8 a.m. Wednesday).

In this way, the kinds of problems that we have today with imbalances and guessing simply never arise. In fact, the shipper's task becomes easier, because it is told at 12 p.m. exactly what it must nominate at 3 p.m. to begin to flow gas at 8 a.m. the next morning, to balance what was taken out in the 24 hours prior to the 12 p.m. notice. In short, the shipper replaces tomorrow exactly what was taken out through noon today.

By contrast, interruptible transportation would operate in the same manner it does today, except that gas would begin to flow into the pipeline at the start of the receipt gas day (8 a.m.), but would not begin to leave the pipeline until 12 noon on that day (i.e., at the beginning of the delivery gas day). Thus, gas would start to flow on Sunday morning for the Monday gas day, with calibration each day throughout the week for the difference between the scheduled and actual flows, and then slow to a crawl on Saturday morning, since all that would be needed would be the remainder of the

Friday evening (after 12 p.m.) burn (as netted against the week's ins and outs). If, on the other hand, the burn continued through the weekend, the daily scheduling and makeup would continue.

The Underlying Message

The point of all this is to make it easy for consumers to make gas their preferred and continuing source of fuel and power. Simplifying means standardizing the information and getting it out to the people who need it to make the whole process work. Reduce the guesswork; reduce the redundancy; make it easier to do business.

Depending on your point of view, these ideas may sound like communism, anarchy, or simple saneness but as a member of the third-party services sector, I urge pipelines and other transporters to look past the novelty to the underlying message. Don't view us as "barbarians at the gates," but rather consider us