U.S. Pipeline and Tank Transfer Master Agreement: “The LEAP Master Agreement”

The Master Agreement for Purchasing and Selling Refined Products and Crude Oil Version 2.1, commonly referred to as “The LEAP Master Agreement”, was released by LEAP in April, 2009 for voluntary use in physically-settled transactions in the United States where oil title transfers within tanks or pipelines.  The release was the culmination of over 3 years of document drafting and negotiation among committee members who participated in the creation of the document, including representatives of Morgan Stanley, Glencore, Shell, BP, and Chevron.

The LEAP Master Agreement has also been used as the basis for the ISDA North American Crude Oil and Refined Petroleum Products Annex, a document created by ISDA in order to allow their members to leverage the common terms and clauses developed by LEAP within the ISDA documentation framework.  More information about ISDA’s work on Commodities documentation can be found at ISDA.

The LEAP Master Agreement has also formed the basis of several annexes and addendums, described separately on this site, to support the trading of crude oil and products delivered by other transportation modes in the US and Canada.

In general, master agreements simplify individual transaction documentation and facilitate the electronic matching of contractual economic terms.  To the extent that a company has executed master agreements across a large portion of their business, they also reduce the legal basis risk inherent in having purchase and sale trade activity on ‘mismatching’ terms.  In certain cases, master agreements also allow for the netting of default risk across transactions between two counterparties.

In the case of The LEAP Master Agreement, counterparties who have executed the agreement with each other are able to use the eConfirm service in order to electronically match their individual trade transactions and focus in a structured manner on discrepancies that may occur between the two companies’ understanding of the economics of an individual trade.

LEAP members assisted the eConfirm team in developing requirements for the creation of their service to support the electronic matching of physical oil transactions, and LEAP continues to dedicate resources, ideas, and initiatives to facilitate the expansion of electronic matching solutions to support wider segments of the trading market to benefit our members.

LEAP has also developed a User Guide to assist contract administration professionals in implementing The LEAP Master Agreement.

If you have any questions about its use or have suggestions related to expanding its scope or increasing its adoption, please contact at 203-354-4502