10 Jun 2015

LEAP VERSION 3.0 NORTH AMERICAN LIQUID COMMODITIES MASTER AGREEMENT NOW AVAILABLE FOR USE

June 2015 — Leadership for Energy Automated Processing (“LEAP”) is pleased to announce the publication of Version 3.0 of our flagship agreement, the Master Agreement for the Purchase and Sale of Physical Commodities Version 3.0 (the “LEAP Master Agreement Version 3.0”).  As part of this publication, LEAP also provides several Annexes to be used for trading specific commodity groups:  Annex A for Crude Oil; Annex B for Refined Products; Annex C for Natural Gas Liquids and Liquefied Petroleum Gases; and Annex F for Canadian Crude transactions.  LEAP expects to publish Annex D for Refined Product with Renewable Identification Numbers in Q3 2015 but has no plans to provide an update to Annex E for Marine transactions at this time.

The LEAP “suite” of master agreements and annexes provides a clear set of terms and conditions with which parties can document their purchases and sales of liquid commodities in North America.  LEAP and the Version 3 Master Agreement Committee believe that providing these documents will increase certainty regarding contract terms and reduce confusion, inefficiency, and risk among parties in the trade of liquid commodities.

Master agreements, like those found in the LEAP Master Agreement suite, are utilized by counterparties for several reasons, including, to: (i) obtain agreement on legal, credit and operational terms; (ii) simplify transaction documentation; and (iii) facilitate the electronic matching of trades.  Where two parties regularly trade liquid commodities with each other, it makes sense that they would want to establish in advance the general terms that govern their trades, such as payment netting, close-out netting, governing law and dispute resolution, set off, and credit support, among other matters.  Executing a LEAP Master Agreement substantially simplifies the process of documenting transactions because individual trade confirmations only need to include the economic terms of a trade and a limited number of other transaction-specific terms.

These documents are provided by LEAP for the free and voluntary use of market participants.  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/about-us/how-to-join/.

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.