Avoiding natural gas penalties

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Global Oil and Gas Company Draws on Summit’s Regional Expertise to Avoid Non-Compliance and Penalties

A leading global oil and gas services company, had just opened a new plant in the southern United States, and its unpredictable usage pattern raised a red flag for the company’s energy partner, Summit Energy.

Understanding the Nuts and Bolts of Local Pipelines Saves Money: When global companies open plants in new territories, it can be challenging to understand all the various nuances of regional and local energy regulations, such as operational flow orders. Worse, until they break the rules, these companies may not even be aware of the stiff penalties associated with non-compliance. Having insight and market knowledge about local energy suppliers’ operations can save tremendous amounts of time, resources – and money.

SITUATION
A leading global oil and gas services company, had just opened a new plant in the southern United States – its largest yet. For the first several months of the plant’s operation, the company would be testing new machinery and equipment, making the plant's natural gas usage vary widely during its start-up phase. The unpredictable usage pattern raised a red flag for the company’s energy partner, Summit Energy.

LEADERSHIP
Summit’s expert regional analysts knew that the natural gas supply for its client’s new plant came from a pipeline that had a reputation for issuing operational flow orders. The operational flow orders require the plant to shut off natural gas use with short warning and have severe penalties for non-compliance. Recognizing that plants with varying usage patterns and pipelines with strict penalties were a dangerous combination, Summit alerted its client to the potential issues and recommended a strategy for avoiding unnecessary penalties and cost.

Summit informed the company’s leaders of how best to respond to the operational flow orders and communicate with management about energy usage. By effectively explaining pipeline operations and terminology, plant employees better understood the significant penalties that could result from non-compliance.

RESULTS
As Summit predicted, in the two months following the training, two operational flow orders were called in for the oil and gas services company. Plant personnel were able to respond clearly and efficiently, allowing Summit to effectively manage the natural gas usage against supply purchases. Due to Summit’s regional expertise and industry insight, its client has avoided many penalties and saved hundreds of thousands of dollars.

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