Frequently Asked Questions
- What is NetThruPut?
- What do you trade?
- How does a trade work?
- Levels of participation
- Where does the trading take place?
- How safe is my information?
- Help Desk
- Why do you have a credit group?
- Disputed Trades
- Other Information
- How are the NTP indices calculated?
What is NetThruPut?
NetThruPut (NTP) operates an electronic trading system for physical oil. It systems and processes keep a transaction's counterparties anonymous through the pipeline nomination, the crude's delivery and the transaction's settlement. NTP was established in 1999 and is controlled by Enbridge Inc, a leading North American energy company.
What do you trade?
NTP allows people to buy and sell physical crude oil in Canada and the United States for delivery up to 15 months out.
How does a trade work?
Clients who have been approved for trading status log into the trading system and view the market's postings. They can counter an existing bid or offer, enter a new bid or offer, or hit something on the screen. Once an order has been hit, both parties to the deal are notified electronically, the deal is shown on the Completed Trades screen, and their credit usage on the system is adjusted accordingly. When the crude's delivery month arrives the Seller transfers the volume sold to NTP on his Notice of Shipment (NOS) at the trading hub referenced in the transaction. The Buyer indicates on his NOS that he is getting the volume from NTP at that hub. For settlement, the cheques move the opposite direction: buyer to NTP, NTP to seller. In this was NTP cleared $4.5B worth of trades in 2005 with some of North America's largest energy companies.
Levels of participation
There are three levels of trading access, each with a different fee associated with it. The trader level has full access to all features of the trading system. The view level account can see the trading screens but cannot transact. The Producer level account can see certain historical reports that may help them price their production. Call the help desk (403) 538-3535 to hear the benefits of each level.
Where does the trading take place?
The ownership changes hands in tankage at Edmonton, Hardisty, Kerrobert, Cromer, Cushing, Clovelly, St. James and Midland. The drop down menus in the trading system limit orders to crude types and pricing options valid at these locations. If the crude type you want is not shown, there is insufficient trading liquidity for that to be a viable electronic market. If you disagree, let us know.
How safe is my information?
Very safe. The protection of the client data is a top priority for us and our processes and infrastructure is configured with this in mind. The communications connection is made to the system only after the customer has entered a unique username and password. The username has to match a 64 bit certificate stored on your computer making your password useless on any other machine. Once connected the data that is transmitted is encrypted. The NTP datacenter is protected with redundant firewalls and commercial grade intrusion prevention practices.
NetThruPut is regulated in Canada by the Alberta Securities Commission. In the US the Federal Energy Regulatory Commission has approved NTP as a qualified Multilateral Clearing Organization.
Help Desk
The help desk hours are from 8AM to 4PM trading days. Any question can be handled there or redirected to our other staff. Call 403.538-3535.
Why do you have a credit group?
NTP stands in the middle of every trade so we are responsible to pay the sellers. In turn we need to be assured that we will be paid. All companies who use the system are given a credit limit that they must operate beneath. Collateral is required if a company wishes to trade over their NTP established credit limit.
Disputed Trades
NTP the deals are firm with only minor exceptions. However if a counterparty notifies NTP immediately that a trade was made in error, AND the trade is more than $1 out of the money, the deal can be undone. If it is judged, at NTP's sole discretion, to be less than $1 out of the money, the deal may be undone only with the consent of the other party. If the other party declines to allow the deal to be unwound, it stands. All parties remain anonymous throughout the dispute process. Please refer to the contract for further information.
Other Information
Customers should make full use of the checks available in the trading system before sending commands to the live trading system. This is described in more detail in the NTP contract.
If any statement made in these FAQs conflict with the terms of the written trading agreement between NetThruPut and a customer, the terms of the trading agreement shall prevail.
How are the NTP indices calculated?
Customers that wish to transact financial instruments in the crude oil market can enter into
Swap Transactions on NTP. As a result of substantial market activity and price discovery for
the physical oil instruments available on the System, NTP is able to generate timely and
transparent price indices at specific locations. These price indices provide the basis from which
a financial contract for oil forward contracts has been developed by NTP in accordance with
Schedule D of the ESA (“Swap Trading Specifications”).