16 Apr 2013


April 2013 — Leadership for Energy Automated Processing (“LEAP”) is pleased to announce the publication of the LEAP Tank Truck and Tank Railcar Annex.  This “Truck and Railcar Annex” template is available for voluntary use by market participants in order to extend the scope of the LEAP Master Agreement for Purchasing and Selling Refined Petroleum Products and Crude Oil to include purchases and sales by tank truck and tank railcars in North America[1].  The document can be downloaded free of charge from the LEAP website at http://www.energyleap.org/document-downloads/.

Master agreements are utilized by counterparties for several reasons, including, to: (i) obtain agreement on legal, credit and operational terms; (ii) obtain transaction simplification; and (iii) facilitate the electronic matching of trades.

Where one party and another party buy and sell crude oil or refined products with each other regularly, it makes sense that they would want to obtain agreement on the general terms that govern their trades, like title transfer, buyer’s and seller’s remedies for each other’s noncompliance with the contract, and limitations of parties’ liability, among other terms.  Once a Master Agreement is executed, transactions become simplified because individual trade confirmations only need to include the economic terms of a trade.  In some cases, parties are able to forego paper confirmations altogether by using an online matching platform to confirm their trades.

The LEAP Truck and Railcar Annex was prepared by a Committee comprised of representatives from LEAP member companies and non-member participating companies.  The Committee believes that the Truck and Railcar Annex represents an unbiased set of terms and conditions that provide legal and operational clarity for the rights and obligations of the buyer and seller of covered transactions.  This annex joins two other annexes to the LEAP Master Agreement which expand the scope to cover transactions with deliveries in Canada and with waterborne delivery methods.

LEAP’s mission is to promote efficient and reliable transaction processing within the energy trading industry.  More information about LEAP and how to join, including our Limited Project Participation option, is available at http://www.energyleap.org.

Membership in LEAP is open to energy trading, service and association entities on a nondiscriminatory basis.  All members must be legal entities, not natural persons.

[1] The template may require revision and further customization by market participants depending on their individual commercial and legal objectives for each transaction.  Parties should consult their own legal counsel and other professional advisors when using the template to effect transactions.