Quote:
Originally Posted by Azure
Do the pipeline operators make more money if the oil prices go higher in a year, or is it a set contracted transport rate?
If they do, could be a good few years ahead as prices are expected to stay higher.
|
It’ll be on a contract by contract basis but typically in most scenarios it’s based on a fixed toll. I’d be very surprised if there were variable tolls in those contracts but theoretically it’s possible. I just don’t see the producers giving any upside to the pipeline operators, and in my experience it’s very difficult and unlikely to get upside in the contracts as typically pipeline operators/ midstreamers are very risk adverse and don’t want any downside.