Pipeline Throughput Commitment Clause Samples
A Pipeline Throughput Commitment clause establishes a minimum volume of product that a party agrees to transport through a pipeline over a specified period. In practice, this means the shipper is obligated to reserve and pay for a certain capacity, regardless of whether they use the full amount, and may face penalties or fees if the commitment is not met. This clause ensures predictable revenue for the pipeline operator and allocates the risk of underutilization to the shipper, thereby supporting the financial stability and operational planning of the pipeline system.
Pipeline Throughput Commitment. During each Calendar Quarter pursuant to the terms and conditions of this Schedule and the Tariff, Shipper shall tender at any of the Origin Points an aggregate average of at least 70,000 Barrels per Day of Product for transportation on the Pipeline System, in approximately ratable quantities (such average, the “Minimum Quarterly Commitment”) to the Delivery Point and Carrier shall transport and ship or cause to be transported and shipped such Product on the Pipeline in accordance with the terms of this Schedule. Except as expressly provided in the Agreement for an Outage, a Carrier Force Majeure or a Shipper Force Majeure, if during any Calendar Quarter, Shipper fails to meet its Minimum Quarterly Commitment during such Calendar Quarter, then Shipper will pay Carrier a deficiency payment (each, a “Quarterly Deficiency Payment”) in an amount equal to the volume of the deficiency (the “Quarterly Deficiency Volume”) multiplied by the Transportation Rate in effect for the relevant Calendar Quarter. The dollar amount of any Quarterly Deficiency Payment paid by Shipper may be applied as a credit against any amounts incurred by Shipper and owed to Carrier with respect to volumes of Product tendered at any of the Origin Points in excess of the Shipper’s Minimum Quarterly Commitment (or, if this Schedule expires or is terminated, to volumes tendered to the Origin Points in excess of the applicable Minimum Quarterly Commitment in effect as of the date of such expiration or termination) (such excess volume during any Calendar Quarter is referred to in this Section as the “Quarterly Surplus Volume”) during any of the succeeding four Calendar Quarters, after which time any unused credits will expire. This Section 7 shall survive the expiration or termination of this Schedule, if necessary for the application of any Quarterly Deficiency Payment against any Quarterly Surplus Volume as set forth herein. Carrier shall provide transportation services to Shipper in excess of the Minimum Quarterly Commitment on an “as available” basis, and any use of such excess capacity shall be subject to the Transportation Rate in effect at the time of the tender.
Pipeline Throughput Commitment. During each Calendar Quarter pursuant to the terms and conditions of this Schedule and the Tariff, Shipper shall tender at any of the Origin Points an aggregate average of at least 50,000 Barrels per Day of Product for transportation on the Pipeline System, in approximately ratable quantities (such average, the “Minimum Quarterly Commitment”) to the Delivery Point, or in the case of Product delivered via the NuStar ▇▇▇▇▇▇▇ Pipeline, to the NuStar ▇▇▇▇▇▇▇ Station for transportation on NuStar ▇▇▇▇▇▇▇ Pipeline to the NuStar delivery point (which is the upstream flange of the receipt header at the Refinery), and Carrier shall transport and ship or cause to be transported and shipped such Product on the Pipelines in accordance with the terms of this Schedule and the Tariff. Except as expressly provided in the Agreement for an Outage, a Carrier Force Majeure or a Shipper Force Majeure, if during any Calendar Quarter, Shipper fails to meet its Minimum Quarterly Commitment during such Calendar Quarter (a “Deficiency”), then Shipper will pay Carrier a deficiency payment (each, a “Quarterly Deficiency Payment”) in an amount equal to the volume of the deficiency (the “Quarterly Deficiency Volume”) multiplied by the Tariff Rate in effect for the relevant Calendar Quarter. In the event of a Deficiency for purposes of calculating the Quarterly Deficiency Payment, the Minimum Quarterly Commitment shall be deemed to require no less than 25,000 Barrels per Day of Product to have been shipped on the Pipeline System to the Delivery Point, and the Tariff Rate to be applied (where the ▇▇▇▇▇▇▇ Tariff Rate is not subtracted from the Tariff Rate for volumes transported to the Refinery via the Pipeline System and the ▇▇▇▇▇▇▇ Tariff Rate is subtracted from the Tariff Rate for volumes transported to the Refinery via the NuStar ▇▇▇▇▇▇▇ Pipeline) shall be based on a minimum volume of no less than 25,000 Barrels per Day of Product to be shipped on the Pipeline System to the Delivery Point. The dollar amount of any Quarterly Deficiency Payment paid by Shipper may be applied as a credit against any amounts incurred by Shipper and owed to Carrier with respect to volumes of Product tendered at any of the Origin Points in excess of the Shipper’s Minimum Quarterly Commitment (or, if this Schedule expires or is terminated, to volumes tendered to the Origin Points in excess of the applicable Minimum Quarterly Commitment in effect as of the date of such expiration or termination) (such excess v...