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Inside this journey
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Pre-Discovery
Align the room on outcomes, decision process, and constraints before deeper discovery.
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Stakeholder Alignment
Confirm decision roles (marketing, commercial, CFO), timeline, and approval criteria for tolling, capacity, and credit exposures.
Alignment Questions
Start Here: Who's in the Room and What You're Betting On
- Please tell us your name, role, and primary responsibility related to NGL fractionation or cavern storage.
- What business outcome are you most trying to achieve by exploring fractionation or cavern storage right now?
- Which end-markets or offtake partners matter most for your purity products (please list up to three)?
- What time horizon is your team evaluating when considering commitments (how long must it make commercial sense)?
- Who inside your organization must approve commercial terms, credit, and operational onboarding for deals like this?
If You Could Snap Your Fingers, What Problem Would Go Away?
- What is the single recurring decision, constraint, or failure that quietly costs your team the most margin or creates the biggest operational headache?
- Tell us about a recent event where fractionation, storage, or connectivity issues directly harmed your P&L or customer relationships—what happened and what did you have to do?
- How often do these disruptive events occur for your business?
- When these problems show up, who on your team takes ownership and what temporary fixes do you typically lean on?
- Which downstream impacts from constrained fractionation or storage concern you most?
Let's Talk Dollars: What Return Are You Chasing?
- If a tolling partner delivered perfect operations but reduced your expected netback by 5%, would you still sign and why?
- Which pricing model do you usually prefer or try to negotiate for fractionation?
- What is the minimum fractionation spread or netback (in $/bbl or %) that makes a committed volume attractive to you?
- How important is cost predictability versus taking market exposure on separated products?
- Have you used cavern storage to time sales for seasonal or export premiums? Tell us an example and the realized value.
- Which economic risks keep you up at night when assessing a fractionation/storage partner?
Volume Shocks: How Much Swing Can You Live With?
- If inlet flows dropped 40% next quarter, how would that change your commercial stance toward committed capacity and why?
- How would you characterize your typical inlet volume variability?
- Describe your nomination cadence and how far in advance you can firm volumes (daily, weekly, monthly).
- Which operational flexibility features are must-haves for you when volumes swing?
- When capacity is constrained, what is your preferred mitigation—switch fractionators, sell mixed stream, use storage, or another tactic? Why?
What's Pure Enough? Specs, Tests, and Red Lines
- Would you accept occasional small off-spec tolerances in exchange for lower tolls—if so, where is your absolute limit?
- Which product specifications are non-negotiable for your offtakers?
- How do you currently verify product specs (internal lab, third-party lab, seller certificate) and what turnaround time is acceptable for disputes?
- What commercial remedies do you expect when deliveries are off-spec?
- Tell us about a past off-spec incident: what triggered it, who bore the cost, and how did it change your behavior?
Money & Trust: Credit, Terms, and the 'What Ifs'
- How much counterparty credit risk are you comfortable taking before requiring guarantees, collateral, or prepayment?
- What contract lengths are you willing to consider for fractionation and storage commitments?
- Which credit/security structures do you typically accept or prefer?
- Walk us through your internal approval path for a multi-year tolling agreement—what analyses, committees, or modeling do you require?
- How important are explicit SLAs for uptime, turnaround, and spec compliance when you're evaluating partners?
- What contingency clauses or remedies would you insist on for prolonged outages or force majeure events?
How Will We Know We Won? Metrics, Synced Ops, and Escalations
- If we could only agree on three success metrics, which three would make you comfortable committing long-term?
- Which KPIs do you currently track that you would want visible in a joint dashboard?
- Who on your side would own day-to-day operational coordination and who should be the commercial escalation contact?
- How often would you want joint performance reviews during ramp and steady-state operations?
- What specific reports, data feeds, or formats (e.g., volumetric reconciliation, lab certificates, nomination logs) would make decision-making faster for your team?
Deciding & Moving Forward: Timeline, Blockers, and Small Tests
- If all commercial and operational questions were answered today, what's the earliest realistic start date you'd sign up for and what is the single biggest blocker to that start?
- What is your organization's decision rhythm for transactions like this (procurement windows, board approvals, budget cycles)?
- What documentation or proof points would accelerate your internal approval (examples: sample SLA, performance history, credit package, audit reports)?
- Would you consider a short pilot (3–6 months) to validate operations and economics before committing to a longer-term agreement?
- Who else from your organization should we bring into the next conversation and what is the best way to prepare them?
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Current State Mapping
Document current NGL volumes, sales mix, pipeline interconnects, storage positions, and pain points that drive fractionation needs.
Current State
Start With Your Flow — Who’s on Deck?
- What is your role and primary responsibility for decisions related to NGL fractionation, storage, or product placement?
- Which purity products do you actively market or need to place from fractionation (select all that apply)?
- Approximately how many barrels per day (bpd) of mixed NGL inlet do you manage on average today? Please give a typical baseload number.
- How often does your team update volume forecasts that feed fractionation commitments?
- Who in your organization must approve multi‑month or >12‑month fractionation commitments?
Are You Willing to Accept Compression?
- When spreads compress, how often do you accept reduced netbacks just to keep material flowing?
- What is the approximate minimum netback (or maximum toll) per barrel that makes fractionation economic for your organization?
- Describe a recent period when fractionation tolling became uneconomic — what commercial or operational choices did you make instead?
- How do you currently mitigate spread risk? (select all that apply)
- How many consecutive months of sub‑economic spreads can your team tolerate before pausing commitments?
Where Does Your Volume Actually Come From?
- Are the volumes you call 'steady' actually steady, or are you masking swings that create operational strain?
- Please provide your typical baseload and peak bpd for the last 12 months (e.g., baseload: X bpd, peak: Y bpd).
- Roughly what is your inlet composition mix by percentage for ethane / propane / nC4 / iC4 / C5+ (if known)?
- Which upstream sources drive the largest swings in your NGL inlet? (select all that apply)
- How far out can your forecasting reliably predict volumes within ±10%?
How Connected — Really — Is Your Product?
- If a major pipeline constraint hit tomorrow, could you still get each purity product to its buyers without material disruption?
- Which pipeline headers, interconnects or outlets do you currently rely on or must access (select all that apply)?
- Do you hold firm transportation or storage capacity on any of those routes, or do you rely on spot nominations?
- Are there regular nomination windows, batching schedules, or timing constraints that limit your ability to move product? Please list specifics and frequency.
- Have you experienced curtailments, rejections, or diversion events at Mont Belvieu or upstream interconnects in the last 24 months? If yes, how often and what was the impact?
Where Are You Keeping Your Best Options?
- Is your current storage approach helping you capture seasonal or export premiums—or is it creating hidden costs?
- Do you have dedicated cavern/above‑ground storage capacity at Mont Belvieu or elsewhere? Please indicate volumes and whether it's owned, leased, or third‑party access.
- What are your typical injection and withdrawal rates (bpd) or cycle limits and how often do you actually use that flexibility?
- How often do you deliberately hold product in storage to capture better netbacks versus lifting immediately?
- What contractual, operational or scheduling constraints prevent you from using storage more effectively?
When Off‑Spec Hits, How Bad Does it Get?
- When a product misses spec, is it a one‑time nuisance or a recurring commercial headache for your team?
- Which product specifications are most critical to your buyers and what tolerances do they insist on (e.g., vapor pressure, composition, moisture)?
- How many off‑spec events have you logged in the past 24 months and what were common consequences (penalties, rejections, reblends)?
- What are the typical root causes when specs fail—upstream composition, processing upsets, contamination, sampling errors, or logistics?
- How do off‑spec deliveries typically affect your commercial relationships, cash flow timing, and buyer confidence?
If You Could Rewrite the Playbook
- If you could guarantee one outcome from a fractionation partner that would materially change your economics or operations, what would it be?
- Which KPIs would prove value to your team? Choose up to four priority metrics.
- What level of volume flexibility/tolerance do you need in contracts (e.g., +/- % windows, seasonal carveouts, swing capacity)?
- Which commercial structure would you prefer given market volatility: tolling (variable), fixed fee (stable), or a hybrid? Please explain the main reason for your choice.
- What contract length and renewal terms align with your forecast horizon and capital planning?
What Would Make Us Move Faster Together?
- If we could deliver one specific piece of information this week to help speed your internal approval, what would that be?
- Which internal stakeholders need to be engaged and what are the non‑negotiable approval criteria for volume commitments, tolling, and credit?
- Which supporting documents would you require to move forward (select all that apply)?
- What is your preferred decision timeline for selecting or committing to a fractionation partner?
- What would an ideal onboarding and handoff look like so your operations and commercial teams feel confident in day‑one performance?
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Customer Discovery
Clarify target economic outcomes, variability tolerance, product specs, and success signals for fractionation and storage commitments.
Discovery Questions
Quick Snapshot — What's Top of Mind?
- What's the primary business driver bringing you to consider fractionation and/or cavern storage right now?
- Tell us your role and the people who must sign off on a commercial commitment (names and titles helps us coordinate).
- Which purity products from fractionation matter most to you today?
- What's your typical average inlet volume (MMBtu or bpd NGL-equivalent) and the single largest monthly peak in the last 12 months?
- Do you currently use third‑party fractionators or self‑fractionate? If third‑party, who and what problems have persisted?
- If you could summarize your top 1–2 non‑negotiables for any fractionation partner, what would they be?
What If Your Volumes Weren’t Predictable?
- If your forecasted inlet volumes swung ±30% next quarter, how would that change your commercial and operational plan?
- How often do you experience multi‑week flow disruptions or surges (seasonal, outage, plant upsets)?
- When variability occurs, what has been the real cost to your business—quantify in $/month, lost volume %, or relationship impact if possible.
- Which strategies do you currently use to manage variability?
- What variability ranges can your commercial team tolerate for committed volumes before economics or credit triggers occur?
- Describe a recent variability event: what happened, how you responded, and what you wish had been available from a fractionator or storage provider.
When Fractionation Lets You Down — What Actually Breaks?
- Think of the worst fractionation or placement failure you've lived through — what aspect hurt most: the economics, customer relationships, operational scramble, or regulatory/compliance exposure?
- How frequently have you faced off‑spec product deliveries, and what are the typical causes in your experience?
- When off‑spec or late deliveries happen, what are the immediate downstream impacts for your team and customers?
- What contractual penalties or commercial outcomes have you seen applied (lost margin, rejection, reprocessing costs)? Please provide examples and ranges if possible.
- How do incidents like these affect your willingness to commit to longer term tolling or storage agreements?
- What emotional burden do these failures place on your team (stress, reputational risk, constant firefighting)? Describe in your own words.
Let’s Talk Money — Which Outcome Really Counts?
- If you had to rank outcomes from a fractionation partner, which matters most: immediate netback, predictability of receipts, product placement flexibility, or low operational risk?
- What netback (or spread capture) per product would make tolling an economically viable alternative to selling mixed stream today? Please list by product if possible.
- How much premium would you pay for secure cavern storage that lets you time product sales to seasonal peaks?
- Which commercial model do you prefer or are open to? (Select all that apply and add context below)
- Describe any internal hurdles (e.g., treasury, accounting, hedging constraints) that typically dilute expected economic benefits.
- Have you modeled multi‑year price scenarios and how tolling vs selling mixed stream affects your P&L under stress? If so, what key sensitivities matter most?
Product Specs & Acceptance — Where Are the Lines?
- If you could change one technical acceptance clause in a standard fractionation contract, what would it be and why?
- For each purity product, what are your minimum acceptance specifications (purity %, water content, sulfur, distillation cut, etc.)? Please list by product.
- How quickly do you expect off‑spec determinations to be communicated and resolved (hours, days)?
- What remedies do you expect when product fails spec (rejection, make‑good, price adjustment, reprocessing)? Select all that apply.
- Describe your lab/sample split and QA process — who decides final acceptance and what SLAs are non‑negotiable?
- How would you like specification compliance to be reported (real‑time dashboard, daily summary, monthly KPI pack)?
Timing, Logistics & Connectivity — What Breaks if It's Not Right?
- If your preferred pipeline header or truck/loadout isn't available when you need it, what are the operational and commercial consequences?
- Which header connections and downstream destinations are mission‑critical for your business (list top 3 headers and why)?
- What scheduling windows and nomination lead times do you require to keep your downstream contracts intact?
- How do you prefer to coordinate turnarounds or planned outages (joint schedule, 3rd‑party coordinator, vendor‑led)?
- What are your expectations for operational notification (e.g., derates, lineups, tank levels) during critical windows?
- If we proposed a phased ramp (pilot -> partial commitment -> full), what would an acceptable ramp profile look like (months and % of committed volume)?
Commitment, Credit & Contracts — Where Is Your Comfort Zone?
- What contract length do you prefer and why—short term flexibility or multi‑year certainty?
- What minimum committed volume or take‑or‑pay profile would your team consider reasonable to secure preferential tolling or storage terms?
- Which credit supports are you prepared to provide (letter of credit, parent guarantee, cash collateral) and what limits do your treasury policies impose?
- How important is contractual flexibility (e.g., seasonal allocation, swing volumes, reopener clauses) versus a fixed, predictable contract?
- What renewal mechanics would you accept—automatic renewal, open negotiation window, or market‑index adjustments?
- Describe a credit or contract term in past agreements that blocked a deal — what specifically made it unacceptable?
Success Signals — How Will You Know We Got This Right?
- If we delivered a year from now, what 3 measurable outcomes would make you call the relationship a success?
- Which KPIs matter most to your leadership: average netback, % of volumes within spec, uptime/downtime, or speed of placement to market?
- What reporting cadence and format will keep your team comfortable (daily operational, weekly commercial, monthly executive)?
- What tolerances would trigger an escalation (e.g., spec failures > X%, downtime > Y hours)? Please be specific.
- Beyond metrics, what qualitative signals would reassure you—customer praise, fewer firefights, or more predictable treasury outcomes?
- If a pilot period were offered, what minimum duration and data set would you require to validate success?
Deciding & Next Steps — What Would Make Saying Yes Easy?
- What single change to our standard offer would make your procurement or legal team sign faster?
- Who are the final decision makers and what approval gates remain (procurement, CFO, board, risk)?
- What specific data or analysis would you need from us this week to advance to an internal term sheet or LOI?
- What timeline would your team need to execute (informal interest → term sheet → executed contract)? Please give target dates or ranges.
- Would you be open to a limited pilot or proof‑of‑performance before a full commitment? If yes, what volume and duration feel low‑risk?
- Finally, what would cause you to walk away from talks—list absolute deal‑killers so we can be transparent up front.
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Solution Experience
Walk through outcome-focused scenarios showing how inlet capacity, pipeline connectivity, cavern timing, and tolling impact netbacks and risk.
Experience Meetings
- Current State & Consequence Validation
- Model Run Workshop — Netback Scenarios
- Operational Risk & Contingency Simulation
- Commercial Trade-offs, Pricing Calibration & CFO Briefing
- Executive Synthesis & Go/No-Go
- Create a clear ask (LOI, term sheet approval, or pilot authorization) with next steps and owners.
- Customer to confirm or adjust price deck and variability tolerances used in scenarios.
- Identify two prioritized scenarios for deeper operational and commercial design.
- Operational Constraint Review
- Identify top operational failure modes and their financial effect on chosen scenarios.
- Agree a concrete contingency playbook with triggers, owners, and SLAs.
- Define the acceptance-test protocol and nomination/reconciliation schedule required before go-live.
- Operations to produce a nomination & metering flowchart with owners and lead times.
- Seller to draft a contingency playbook including trigger thresholds and the proposed SLA/penalty framework.
- Schedule an operational walkthrough at the plant and pipeline tie-points if additional clarity is needed.
- Executive Recap of Validated Outcomes
- Agree on a recommended commercial structure (toll vs fee, term, escalation) tied to modeled outcomes.
- Obtain CFO alignment on required financial metrics and acceptable credit exposure.
- Introductions & Meeting Objectives
- Seller to prepare a one-page term sheet showing pricing bands, credit requirements, and SLA highlights.
- Customer finance/CFO to provide formal approval thresholds and any required internal sign-off steps.
- If approved, legal and commercial to draft an LOI or commercial term sheet for mutual review.
- One-Sentence Current State, Consequence & Future-State
- Secure an explicit go/no-go decision or a committed next-step (LOI or schedule for Mutual Commit).
- If go, confirm timelines, owners, and immediate deliverables for contract/operational readiness.
- If no-go, capture precise disqualifying factors and next potential remedial actions.
- Customer sign LOI or provide formal written go/no-go with listed internal approvers and timelines.
- Seller to produce Mutual Commit checklist and timeline tied to the chosen commercial terms.
- Schedule Pre-Deployment Readiness checkpoint if decision is go.
- Produce and align on a crystal-clear one-sentence current-state description.
- Quantify the consequence (netback loss, risk, timing) from the current state in measurable terms.
- Agree one-sentence future-state outcome that the Solution Experience must prove.
- Secure required data and schedule the Model Run Workshop.
- Customer to deliver validated inlet volumes, sales mix, pipeline header mapping, and cavern inventory history (last 12 months).
- Seller to compute baseline netbacks and documented consequence metrics for the agreed current state.
- Schedule Model Run Workshop and circulate model assumptions template to customer.
- Recap Current/Future-State & Assumptions
- Produce quantified netback deltas and risk metrics for each scenario using customer data.
- Identify which scenario(s) materially resolve the customer's consequence and by how much.
- Agree the top two commercial structures and sensitivity tolerances to test in follow-up.
- Get explicit customer validation that model assumptions reflect reality.
- Seller to deliver detailed scenario output workbook with assumptions, line-item P&L, and risk metrics within 3 business days.
- Pricing Calibration — Toll vs Fee Sensitivity
- Top Scenario Outcomes (Executive Summary)
- One-Sentence Current State
- Model Setup & Assumption Validation
- Off-Spec & Outage Impact Simulation
- Recommended Commercial Ask
- Evidence Review
- Nominations, Timing & Reconciliation Flows
- Scenario A — Inlet Capacity Constraints
- Credit, Term & Renewal Mechanics
- Scenario B — Pipeline Connectivity Failures/Constraints
- Financial Metrics & CFO Questions
- Decision & Required Internal Actions
- Consequence Quantification
- Interconnect Prioritization & Alternate Routing
- Scenario C — Cavern Timing & Seasonality
- Contingency Playbook & SLA Definition
- Define Future-State Target
- Commercial Recommendation & Ask
- Next Steps & Schedule
- Validation Check & Next Steps
- Scenario D — Tolling Structures (Toll vs Fee & Escalators)
- Synthesis & Forced Validation
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Solution Scope
Define committed volumes, product specifications, pipeline ties, storage allocations, scheduling windows, and acceptance criteria.
Scope Configuration
- Fractionate mixed NGL into purity products
- Continuous custody transfer metering and composite sampling
- Issue product quality certificates and lab reports
- Inject purity products into connected NGL pipelines
- Load purity products to rail cars, trucks, and marine
- Allocate and operate underground cavern storage
- Inventory reconciliation and monthly product statements
- Condition and blend products to meet specifications
- Provide flexible throughput ramp-up and ramp-down
- Handle and segregate off-spec product streams
- Provide collateral and credit-support facilities (LCs, guarantees)
- Operate 24/7 control room and emergency response
- Perform preventive and corrective maintenance on trains
Scope Questions
Fractionate mixed NGL into purity products
- What is the expected average inlet volume to fractionation (specify units and period, e.g., bbl/day or bbl/month)?
- What approximate product split do you expect across ethane, propane, normal butane, isobutane, and natural gasoline (percentage by volume)?
- What contract term do you prefer for committed fractionation volumes?
- Do you require minimum throughput guarantees (e.g., MDQ, take-or-pay)?
- Will your inlet feed vary seasonally or have predictable peaks? If yes, please indicate peak factor (e.g., 1.5x baseline).
- Do you require dedicated train capacity or is shared/pooled capacity acceptable?
Continuous custody transfer metering and composite sampling
- Will you accept seller-provided custody metering or do you require customer-owned metering/verifications?
- What accuracy and calibration standards do you require for custody transfer metering (e.g., API, AGA, +/- %)?
- What sampling frequency and composite sample protocol do you require for product certification?
- Do you require chain-of-custody documentation and third-party lab confirmation for samples?
- Are there existing meter runs or sampling taps to tie into, or will new metering installations be required?
- Do you need electronic transfer of meter/sampler data into your systems (SCADA/EDI/API)? If yes, which formats?
Issue product quality certificates and lab reports
- What certificate elements are mandatory (e.g., BTU, RVP, vapor pressure, composition, impurity limits)?
- Do you require certificates from an independent third-party lab or are seller lab reports acceptable?
- What turnaround time do you require for issuing quality certificates and lab reports after sampling?
- Do certificates need to be delivered via specific electronic channels or integrated into invoicing/nomination systems?
- What off-spec thresholds trigger immediate notification, rejection, or remediation actions?
- Do you require historical certificate and lab-report retention for audits? If yes, specify retention period.
Inject purity products into connected NGL pipelines
- Which pipeline headers or carriers do you require product injection into (list specific pipelines if known)?
- What maximum injection rate or batch size do you anticipate per pipeline?
- Do you require firm injection slots or will you accept best-effort nominations?
- Are interconnect agreements, T&C confirmations, or pipeline capacity reservations already in place?
- Do you require scheduling support for nomination and imbalance management with the pipeline operator?
- Are there specific pipeline product specifications or blending constraints we must meet for injection?
Load purity products to rail cars, trucks, and marine
- Which transportation modes do you require (select all that apply)?
- What loading rate and batch sizes are needed for each mode (e.g., cars/day, truckloads/day, barge capacity)?
- Do you require dedicated loading windows or on-demand loading?
- Are there specific car/truck inspection, cleaning, or pre-condition requirements (e.g., previous cargo restrictions)?
- Do you need the seller to arrange transportation logistics and documentation (bills of lading, customs for export)?
- What HSE and loading acceptance checks are mandatory prior to loading (e.g., overfill protection, vapor recovery)?
Allocate and operate underground cavern storage
- Do you require committed cavern capacity (volume/working gas) or short-term storage access?
- What inventory turnaround (withdrawal/injection rates) do you require from cavern storage?
- What minimum and maximum inventory levels do you plan to maintain (bbls)?
- Do you require title transfer, ownership tracking, or lender/collateral reporting for stored product?
- Are there seasonal marketing or timing objectives driving storage use (e.g., capture winter propane basis)?
- Do you require injection/withdrawal scheduling, requalification testing after long storage, or product conditioning post-withdrawal?
Inventory reconciliation and monthly product statements
- What frequency and level of detail do you require for inventory reconciliation (monthly, weekly, daily)?
- Which line items are required on the monthly product statement (starting balance, receipts, fractionation yields, losses, ending balance)?
- Do you require automated electronic delivery (EDI/API) of statements and inventory data?
- What tolerance thresholds should trigger reconciliation investigations or dispute mechanisms?
- Do you need jointly-signed monthly statements and a formal SLA for reconciliation timelines?
- Are there specific accounting or audit requirements (GAAP, IFRS, lender reporting) that statements must satisfy?
Condition and blend products to meet specifications
- Which products require conditioning or blending prior to delivery (e.g., denaturing, RVP adjustment)?
- What specification targets must be achieved for each product (provide spec table or key parameters)?
- Do you require seller-supplied blending components or will you deliver blending streams?
- Are there approved blending recipes or quality control procedures that must be followed?
- Do you require pre-delivery conditioning testing and certificate of compliance for blended batches?
- Should off-spec remediation (e.g., re-run, reblend) be included in scope and who bears cost?
Provide flexible throughput ramp-up and ramp-down
- What ramp-rate flexibility do you require (e.g., % of MDQ per day/week)?
- Do you need guaranteed ramp windows for start-up and shutdown events?
- How much lead time can you provide for planned ramp-ups or planned reductions?
- Do you require staged ramp commitments (e.g., month 1 at 50%, month 2 at 75%)?
- Are there penalty or makewhole provisions desired for failure to ramp as committed?
- Will your supply profile include sudden drop-to-zero events (e.g., force majeure or shut-ins)?
Handle and segregate off-spec product streams
- Do you require dedicated segregation tanks or streams for potential off-spec product?
- What thresholds define off-spec that require segregation vs. in-line remediation?
- Who should bear the cost of testing, handling, and disposal of off-spec material?
- Do you require notification SLAs and incident reporting for off-spec occurrences?
- Should reclamation, reprocessing, or sale as lower-grade product be options for off-spec streams?
- Are there regulatory or downstream acceptance constraints that limit off-spec handling options?
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Mutual Commit
Finalize commercial terms (tolling vs fee), credit, SLAs for specification compliance, renewal mechanics, and operational contingencies.
Agreement Modules
- Statement of Work (SOW)
- Commercial Agreement (Tolling vs Fee)
- Product Specification & Compliance SLA
- Volume Commitment Schedule & Nomination Rules
- Credit, Security & Collateral Agreement
- Operational Service Level Agreement (Performance SLAs)
- Metering, Testing & Acceptance Protocol
- Interconnect & Pipeline Tie-In Agreement
- Operational Contingency & Force Majeure Plan
- Renewal, Pricing Escalation & Term Mechanics
- Insurance & Indemnity Schedule
- Governance, Communications & Escalation Matrix
- Change Order & Amendment Process
- Master Agreement Execution & Signatures
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Deployment
Operationalize the contract with readiness checks, scheduling, and validation.
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Pre-Deployment Readiness
Confirm interconnect paperwork, nominations process, line-ups, credit approvals, and contingency plans are in place before start-up.
Readiness Questions
Opening: Who You Are and What’s Urgent
- Which role best describes you in this decision?
- Which outcomes are you personally measured on for fractionation or storage decisions?
- What is your planning horizon for this project?
- Who are the mandatory approvers for commercial commitments and what is their single biggest concern?
- On a scale from 1–5, how urgent is resolving your fractionation placement or storage needs right now?
Where Your Feedstock Lives and Where It Needs to Go
- If your feedstock composition shifted by 10% ethane or butane tomorrow, how quickly would your current placement plan break down?
- What are your current average monthly inlet volumes to fractionation (bpd or bbl/d)?
- How is your sales mix typically split across products (ethane, propane, normal butane, isobutane, natural gasoline)? Please provide approximate % if possible.
- Which pipeline or header connections are essential for your placement strategy?
- Describe any seasonal or contractual swings in your supply that create peak days or troughs.
- What is your current storage position and flexibility—do you run a net-short, balanced, or net-long storage stance?
What’s Eating Into Your Margin That Nobody Talks About
- Which recurring operational or commercial issue most often turns an expected margin into a disappointment?
- How often have you had off-spec product incidents in the past 12 months and how were they resolved?
- What tolerance for product specification variability can your customers accept (e.g., dew point, butane split)?
- Which hidden costs (transport, inventory carrying, quality rework, nomination penalties) do you estimate erode your realized netback most?
- When these margin squeezes happen, how do they make you feel about your current partners and options?
If You Could Snap Your Fingers and Fix One Thing
- If one operational change could immediately improve your netback or reduce volatility, what would that be and why?
- Which of the following outcomes would move the needle most for you?
- What tradeoffs would you accept to secure that improvement (price, term length, minimum volume commitment, taking some specification risk)?
- What would be a clear, measurable signal of success after 3 months and after 12 months?
- How emotionally costly is the current state to your team—does it create constant firefighting, periodic stress, or occasional inconvenience?
The Connectivity and Ops Reality Check
- Which single pipeline, metering, or nomination constraint has been the biggest operational bottleneck for you in the last year?
- How mature is your nominations and scheduling process today?
- How confident are you in metering and reconciliation accuracy at your key interconnects?
- Who owns operational escalation internally and what is their contact/responsibility model?
- What lead time do you need for pipeline tie-ins, schedule changes, or storage nomination adjustments?
Commitment, Credit, and What You Can Live With
- If credit approval were the only hurdle, how likely is your organization to provide the support needed to sign a 12+ month commitment?
- Which commercial model do you prefer for fractionation economics?
- What contract length and renewal mechanics would your CFO consider acceptable?
- What forms of credit support are you willing to provide?
- What financial or reporting metrics would your finance team insist on including in the agreement?
Early Warning, Contingency, and How You Want to Be Notified
- If an unplanned outage removed 25% of capacity for a month, what would your first three actions be?
- Which contingency arrangements are most important to you?
- What SLA or penalties would make you feel comfortable that your partner is serious about uptime and specs?
- Who should be on the incident escalation list (roles, not names) and what are your preferred notification channels?
- How do you prefer contingency costs to be allocated when both parties share some responsibility?
Deciding Together: What We Need to Move Forward
- What is the minimum evidence or deliverable that would convince your CFO or procurement team to progress to commercial terms?
- Which of these items can you provide quickly to accelerate evaluation?
- Would you prefer an initial pilot (short-term committed volume) or to move straight to a longer-term commercial agreement?
- Who else should be at our next workshop to make decisions (roles and disciplines)?
- Realistically, when can your team commit to a follow-up meeting to review a proposed commercial and operational plan?
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Deployment Enablement
Schedule and coordinate pipeline tie-ins, storage allocations, train sequencing, and operational handoffs with clear owners and milestones.
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Validation Checklist
Verify product specs, metering, nomination flows, invoicing, and acceptance tests to confirm readiness and rectify gaps.
Validation Questions
Start Easy — About You and Your Team
- What's your primary role in decisions about fractionation, storage, and product placement?
- Who else on your team needs to be involved for commercial and operational decisions (names or roles)?
- What is the typical contract approval timeline at your company—from initial commercial discussion to CFO sign-off?
- How do you prefer we engage during discovery—high-level commercial first, or jump straight into technical specs and nominations?
- Is there anything about your organization (internal approval quirks, timing windows, recent reorganizations) we should know up front to make conversations productive?
If Fractionation Stopped Being Reliable, What Breaks First?
- If your fractionation access were interrupted for a month, what commercial or operational outcomes would you expect (lost revenue, displaced volumes, downstream constraints)?
- Which of these risks has the biggest immediate impact on your P&L when realized?
- How often do unplanned operational disruptions at fractionators or pipelines materially affect your volumes?
- Tell us about the last time an operational issue hit you—what happened, who scrambled, and what did it cost (time or dollars)?
- When disruptions occur, which internal frustrations come up most—forecast mismatch, reconciliation disputes, or lack of real-time visibility?
Are You Trading Volume Predictability for Price Exposure?
- How confident are you in your 30/60/90-day inlet volume forecast to a fractionator?
- What percentage of your feed volumes are committed versus ad-hoc spot flows today?
- Which products in your mixed-NGL stream matter most to your commercial strategy?
- How much intra-month variability do you experience on average (as a % of monthly volume)?
- Give a concrete example of when forecast variance forced a change in your downstream plans—what did you do?
What’s Getting in the Way of Clean Specifications?
- When was the last time a purity or spec failure caused demurrage, rejection, or significant rework?
- What spec thresholds are non-negotiable for your offtake partners (e.g., ethane purity, RVP limits for C5+)?
- How do you currently handle off-spec production—disposition back to processor, reblend, or paid penalties?
- Who in your organization signs off operationally on acceptance testing, and how long does that review typically take?
- How important is third-party metering/custody transfer independence to you versus operator internal meters?
Which Single Bottleneck Would Break Your Plan Tomorrow?
- If you could point to one choke point—connectivity, linepack, storage, or nominations—which would be the most damaging if it failed?
- Which pipeline headers and interconnect points are critical for your movement to Mont Belvieu (list headers or common receipt points)?
- How often do you face physical constraints moving product to your preferred header?
- What storage profile do you prefer—steady drawdown, seasonal bulking, or just-in-time minimal storage—and why?
- Describe a logistics workaround you've used during a constrained period—what worked and what didn't?
What Would You Trade for Lower Tolling?
- Would you accept a lower toll in exchange for more rigid scheduling, or pay more for operational flexibility?
- Which commercial model do you prefer or currently use—tolling per bbl, percentage-of-product, or fee+performance structure?
- How long are you comfortable committing volumes before needing renewal protections (terms)?
- What credit terms or protections are must-haves for your finance team (letters of credit, parent guarantee, netting)?:
- Tell us about a past commercial clause (escalator, renewal, early termination) that caused friction—what would you change?
How Will You Measure Success (and How Soon)?
- If this partnership exceeded expectations, what three measurable outcomes would you point to in the first 12 months?
- Which KPIs matter most to you: netback per product, downtime frequency, specification compliance rate, or invoice/reconciliation speed?
- What cadence and format of reporting would make you feel in control—monthly P&L, weekly nominations dashboard, or real-time telemetry?
- How will your organization decide this was worth doing—cost savings, improved reliability, or strategic optionality?
- What timeline would you need to see early wins before committing to longer-term terms?
Small Bets — What’s the Easiest Way to Start?
- What is the least risky first step you'd accept to test working together (pilot volume, seasonal option, or operational SLA trial)?
- What paperwork or approvals do you need before a pilot can start (interconnect agreements, credit approval, nominations setup)?
- Who would need to sign off on a pilot and who would own day-to-day execution from your side?
- What concerns would make you hesitate to run a pilot, and what mitigations would reduce that hesitation?
- If we proposed a 90-day pilot, what acceptance criteria would make you consider it successful?
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Success
Confirm achieved economics and operational performance, reconcile volumes and payments, and maintain a joint channel for issues and improvements.
Success Reviews
- Success Review Kickoff
- Economics & Netback Reconciliation
- Operational Performance & Volume Reconciliation
- Issues & Continuous Improvement Forum (Recurring)
- Outcomes & Renewal Planning (Lessons Learned)
Issues & Enhancements
- Owners to update issue tracker entries with RCA and planned remediation dates before the next forum.
- Ensure all economic adjustments are traceable to source transactions and owners are assigned for unresolved items.
- Define clear deadlines for invoice corrections or credits to be issued.
- Seller to produce transaction‑level product sale confirmations and storage withdrawal confirmations for disputed line items.
- Buyer to provide counterparty trade confirmations or hedging adjustments that affect realized prices.
- Finance owners to prepare proposed invoice adjustments and circulate before the agreed deadline.
- One‑Sentence Operational State
- Mutually agree the delivered volumes and operational events for the period, and document any agreed adjustments affecting billing.
- Assign owners and timelines for corrective actions tied to identified root causes.
- Establish a short list of operational KPIs to monitor next period to prove improvement.
- Operations to supply daily meter runs, outage logs, and acceptance test certificates for the reconciliation window.
- Joint technical team to complete root‑cause analysis on any off‑spec event within X business days.
- Agree and publish an operational KPI dashboard to be reviewed at the recurring Issues & CI forum.
- Review One‑Line Current State Update
- Keep a transparent, prioritized backlog of issues with clear owners and delivery dates.
- Validate that corrective actions materially reduce the risk or recurrence of issues.
- Ensure both parties have a living list of process improvements to reduce future reconciliation burden.
- Introductions & Objectives
- Engineering to propose one operational automation (e.g., automated meter reconciliation) with estimated cost/time for review.
- Both parties to agree escalation contacts for high‑impact events and publish the contact matrix.
- One‑Sentence Outcome Statement
- Produce a clear recommendation for renewal or amendment grounded in reconciled economics and operational performance.
- Agree timeline and owners for negotiating and approving contract changes or renewals.
- Capture a short list of contractual clauses or SLA changes tied directly to quantified consequences observed.
- Commercial to draft recommended contract amendments (tolling, SLA, credit) with rationale tied to reconciliation outcomes.
- Finance and Legal to validate the financial and compliance impact of proposed amendments and return comments within agreed timeline.
- Communications lead to prepare an outcomes brief for executive stakeholders summarizing decisions and next steps.
- Create an unambiguous, shared current‑state sentence and one agreed future‑state sentence.
- Agree on authoritative data sources, owners, and a reconciliation timeline.
- Establish cadence and owners for the economics and operations meetings that follow.
- Seller to deliver the specified meter, nomination, invoice, and P&L extracts as agreed in the Data & Evidence Map.
- Buyer to confirm any alternate data sources and provide access credentials if needed.
- Project manager to circulate meeting calendar invites and owners for each follow‑up meeting.
- One‑Sentence Current Economic State
- Reach agreement on the reconciled netback calculation for the period and identify any contested lines requiring follow‑up.
- Operational Consequences
- Consequences & Materiality
- Executive Summary of Economics & Operations
- Open Issues Review (Top 5)
- One‑Sentence Current State (Required)
- Lessons Learned (What Changed After Meetings)
- Consequence Summary
- Reconciliation Walkthrough (Diagnosis -> Proof)
- Metering & Nomination Evidence Review
- RCA & Fix Validation (Diagnosis -> Proof -> Validation)
- Tiebacks to Problems
- Proposed Commercial Adjustments
- Process Improvements & Backlog Prioritization
- Define Target Future State
- Off‑Spec & Acceptance Events
- Data & Evidence Map
- Decision Roadmap & Timeline
- Agree Volume Adjustments & Credits
- Validation & Sign‑off
- Risk Watch & Escalations
- Roles, Timeline & Decision Points
- Preventive Actions & Monitoring
- Agree Next Review & Deliverables
- Next Steps for Adjustments
- Close & Communication Plan