Netthruput inc ntp
Sponsored Links
This presentation is the property of its rightful owner.
1 / 16

NetThruPut Inc. (NTP) PowerPoint PPT Presentation

  • Uploaded on
  • Presentation posted in: General

NetThruPut Inc. (NTP). PRMIA Luncheon May 31/06. NTP Introduction. NTP is an electronic exchange that allows energy market participants to buy and sell online the most commonly traded crude oil types in Western Canada (physical volumes).

Download Presentation

NetThruPut Inc. (NTP)

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript

Netthruput inc ntp

NetThruPut Inc.(NTP)

PRMIA Luncheon

May 31/06

Ntp introduction

NTP Introduction

  • NTP is an electronic exchange that allows energy market participants to buy and sell online the most commonly traded crude oil types in Western Canada (physical volumes).

  • Customers are Canada’s largest oil producers, marketers, refiners, and financial participants.

  • Full clearing anonymous exchange.

  • Originated within Enbridge in 1997 – commercial trading commenced Jan/99.

Ntp trading region

NTP Trading Region




Milk River


Source: Canadian Energy Pipeline Association – March 7, 2005

Ntp operations

NTP Operations

  • Trade approximately 260,000 bbls/day of physical oil (no financial products). Record volumes of 375,000 bpd for June/06

  • Annual notional value of Cdn$5-6B (primarily goes to delivery)

  • NTP’s system currently resides on 355 desktops at 90 companies in Canada.

  • NTP administers all pipeline nominations to ensure physical delivery.

  • List 40 oil grades at 5 trading hubs.

  • Complete clearing services.

Ntp trading screen

NTP Trading Screen

Ntp s clearing operations

NTP’s Clearing Operations

  • NTP administers open and secured lines under Board approved Credit Policy.

  • Unsecured credit lines primarily available to investment grade counterparties only. Remainder post margin to cover positions.

  • All open lines approved by insurer (EDC). Insurance will cover MtM and Contract Value losses.

  • System automatically halts any trades that would exceed credit limit.

  • No events of payment default in 7 year history.

Risk management

Risk Management

  • Risk management model based on industry best practices. Standard metrics used (contract value, MtM and VaR)

  • NTP system does not allow trades that could result in excess position.

  • Virtually all index based deals (i.e. WTI +/- a negotiated differential). Price movement risk limited to movement in differential.

  • Limited forward curves available for Canadian crude oil differentials.

Ntp clearing model

NTP Clearing Model

Benefits of netting

Benefits of Netting

Netting cont d

Netting Cont’d

Risk measurement example

Risk Measurement Example


Other risk factors

Other Risk Factors

  • Conservative VaR (99% and 5-10 days liquidation). Result of relatively illiquid market.

  • Customer reporting – shows summary credit usage by Contract Value, MtM and VaR

  • NTP building a forward curve for Canadian crudes– slow process! Use NTP price for MtM and prompt month VaR

  • U.S. Market - Platt’s and Argus pricing provides market in spot – nothing forward (proxy with Nymex rolls)

Risk benefits to shippers

Risk benefits to shippers

  • Allows them to mitigate credit risk through netting and diversification.

  • L/C participants get much more leverage – able to do more business.

  • High oil prices and few counterparties = unacceptable risk exposure

  • Reduces costs of capital, L/C fees, and use of bank lines.

  • Attractive to financial participants – further diversification.

  • NTP can also clear bilateral OTC transactions.

Future outlook on risk items

Future Outlook on Risk Items

  • Will do back-testing to see how well VaR measurements are covering movements

  • Look for correlations between various crude types to determine VaR offsets.

  • Continue to use NTP figures to enhance spot and forward curves for Canadian crudes.

  • Likely increase usage of margin to secure positions.

Netthruput inc ntp1

NetThruPut Inc.(NTP)


May 31/06

  • Login