A natural gas marketing and trading firm faced inefficiencies in managing transportation costs across 45+ natural gas pipelines due to several challenges. Schedulers were not using the ETRM system for scheduling but instead relied on external tools and spreadsheets, leading to manual re-entry of nominations into the system, which consumed over 12 hours weekly. The complexity of pipeline tariff structures made it difficult to accurately configure rates in the ETRM system, resulting in discrepancies in transport cost calculations.

Additionally, pipeline invoices were issued after preliminary financial totals were booked, causing prior period adjustments (PPAs) and requiring the back-office team to spend an extra 20 hours per month on reconciliation. These factors, combined with errors in manual entry, undermined the company’s ability to accurately forecast transport costs and further complicated the financial close process.

KEY RESULTS

12+ Hours

Reduction in Manual Effort

Automating the nomination process eliminated the need for manual data entry, saving schedulers hours per week.

20 Hours

Faster Reconciliation

Automating the pipeline invoice reconciliation process saved the back-office team additional hours each month.

100%

Real-Time Cost Visibility

BI Dashboards provided schedulers with real-time tracking of transportation costs, allowing them to monitor costs throughout the gas day.

40%

Faster Implementation

Grouping pipelines by tariff type allowed for quicker deployment by reusing code with minimal customizations across pipelines.

A Strategic Approach to Project Success

Leveraging Value Creed’s advisory expertise, the firm implemented a fully automated system to optimize transportation cost calculation and streamline settlement processes. By integrating their ETRM system with external scheduling tools and advanced data analytics, the solution effectively addressed their operational inefficiencies. This comprehensive approach enhanced accuracy, reduced manual efforts, and improved reporting capabilities.

Advisory Services

EDI Integration for NAESB Pipelines
Scheduled quantities were automatically imported from each pipeline throughout the gas day using EDI (Electronic Data Interchange). This eliminated manual data entry into the ETRM system, significantly reducing the schedulers’ workload and saving over 12 hours per week.

Custom Code Development for Tariff Calculation
Value Creed recommended a custom code to pair imported scheduled quantities with stored tariffs in the system. This enabled accurate, automatic calculation of transportation costs, which were presented in real-time through BI Dashboards. The custom coding accounted for each pipeline’s unique tariff structure, ensuring the accuracy of transport cost calculations.

Data Analytics Integration & Visualization
By leveraging Microsoft Power BI alongside the ETRM system, the solution allowed for real-time visualization of transportation costs, tracking them cycle-by-cycle, by pipeline, contract, and variable. This integration empowered schedulers to view costs in real time, improving decision-making and operational monitoring throughout the day. The system also provided visual insights into cost variances, enhancing forecasting accuracy. Calculated transportation costs were seamlessly mapped back into the ETRM system, ensuring alignment with financial reporting and settlement processes.

Pipeline Invoice Reconciliation Automation
Custom BI Dashboards were designed to match each pipeline’s invoicing format. For pipelines offering EDI or CSV exports of invoices, the system automatically reconciled these with the ETRM system’s calculated costs. Discrepancies were flagged for investigation, reducing the need for manual intervention and saving the back-office team over 20 hours per month.

Tariff-Based Optimization
To optimize the automation process, pipelines were broken down by tariff type. The Value Creed team started with pipelines having similar tariff structures, such as those with zonal-based tariffs, reusing the base code with slight adjustments for customizations. This approach enabled economies of scale in code development, allowing for faster implementation across multiple pipelines.

Expertise on Demand

ETRM Integration
Value Creed implemented a flexible solution where data was consolidated within the company’s proprietary database, integrating inputs from both the ETRM system and an API for Nominations via EDI from each pipeline EBB. This setup, coupled with custom tariff code, enabled real-time transportation cost calculations, allowing a single cost entry per pipeline to be rolled into the ETRM, eliminating the need for manual nomination entry.

Value Creed Services Mobilized

Advisory Services

Our advisory services will guide your operations and help you achieve your vision, considering all stakeholders. With extensive lifecycle, functional, and technical expertise, our experienced team delivers frameworks and guidance for building reliable and scalable commodity trading businesses.

Expertise on Demand

Unlock operational efficiency and reliability with Value Creed’s services. Optimize performance with fast, accurate data extraction, reconciliation, calculation, and reporting.

Key Takeaways

Value Creed’s advisory expertise in automating transportation cost calculations and integrating data analytics tools empowered the firm to enhance operational efficiency and reduce manual workloads. Our tailored approach focused on understanding the unique challenges faced by the firm, leading to a streamlined implementation that significantly improved accuracy and real-time visibility in cost management. By leveraging our knowledge of ETRM systems and process optimization, we helped the firm position itself for better financial reporting and responsiveness to market changes.

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100% Real-Time Cost Visibility Transforms Gas Trading Firm’s Transportation Operations

Operational Enhancement

KEY RESULTS

12+ Hours

Reduction in Manual Effort

20 Hours

Faster Reconciliation

100%

Real-Time Cost Visibility

40%

Faster Implementation

A Strategic Approach to Project Success

Advisory Services

Expertise on Demand

Value Creed Services Mobilized

Advisory Services

Expertise on Demand

Key Takeaways

Recommended Resources

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