2010 was a year of change for Liquigas and New Zealand's LPG industry. Not only did the company's exclusive supply of Maui LPG end on January 1, but the start of production from the Kupe field brought new supply to the market.
Liquigas took a strategic decision to cease trading and instead moved to provide its storage facilities on an open access basis to any wholesaler who wished to contract for their use.
The total change in the nature of the Liquigas business had the potential to upset relationships with existing customers and involved renegotiation of nearly all the company's commercial and operating agreements.
But the company managed this by establishing a steering group to help administer the transition from sole LPG supplier to independent storage provider for a competitive market.
Using feedback from its customers, and with assistance from Minter Ellison Rudd Watts, Liquigas created a new access regime featuring the 93-page Liquigas Facilities Code, which sets out the rules for use and sharing of the company's assets.
It includes rules regarding inputs and uplifts from the ullage, customer forecasts, administration of the shipping slate and a pricing schedule. It works to clearly define the roles and responsibilities of each party, providing security of supply to customers and end-users.
At the same time, Liquigas worked with Orbit Systems to design the Slate and Allocation Model (SAM) software system to manage the information flows needed to aggregate users' demand forecasts and create a shipping schedule.
The custom-built SAM system tracks customer forecasts of inputs and uplifts over a three-month period, calculates actual usage, and reports daily to traders and customers. It is the only model of its type in the New Zealand LPG industry.
Users say SAM has now become a valuable planning tool, which allows them to look at broader trends in the industry, or quickly respond to delays in shipping, unplanned production outages and other one-off events.
In 2011 the Innovation in Petroleum award category was sponsored by ITL.