The APMC is responsible for executing the royalty valuation of commodities and the validation of crude oil transportation allowances. Both are critical inputs into the determination of the Crown's royalty volume and marketing costs.
Reference Prices
The APMC determines a number of prices and allowances used in the calculation of the royalty volume and valuation. It sets the Oil Par Prices and Alberta Natural Gas Reference Prices which are published monthly.
Oil par prices are important components in the calculation of the Crown royalty rates for conventional crude oil. These prices are intended to represent provincial arm’s length netback market prices at the producing battery received by producers selling their Crown production. There are four categories of conventional crude oil (Light, Medium, Heavy and Ultra-heavy), each with its own par price. These categories were established by density ranges.
The Alberta Natural Gas Reference Price is a representative market price for natural gas bought and sold within the province, calculated using a simplified netback model. The Natural Gas Reference Price is a critical input into the valuation of the Crown's royalty volume.
Natural Gas Information Letters
Transportation Allowances
The APMC manages the submission of costs related to the Crown’s share of conventional crude oil, providing assurance of accurate disbursements each month.
The allowance, expressed as a unit cost in $/m³, is calculated by dividing the sum of the eligible cost components by the volume of oil delivered in the month. It is expected that the unit cost of trucking Crown royalty oil is identical to the actual eligible unit cost of trucking the lessee’s share.
There may be requests by the APMC for companies to provide proof of oil quality, third-party trucking invoices and tickets, or for information pertaining to the relationship between the producer and the trucking company (or companies) used. Periodically, batteries may be selected for an official audit where all of these documents would be required to validate a reported, or series of reported, rates.
Industry Reporting Deadline (APMC calendar and Petrinex calendar)
Submission Guidelines (Petroleum Marketing Regulation Guidelines s.1.8)
Each month, APMC receives tariff invoices from pipeline and terminal operators for services relating to the transportation of royalty crude oil in the preceding month. The invoices normally comprise of volumes shipped, tariff rates, specific pipeline receipt/delivery points, and other miscellaneous charges for admin services, among others.
The APMC system calculates the anticipated Tariff charges by matching royalty volumes submitted by the producers to shippers balance. A comparison between the “system-calculated amount” and the “invoiced amount” is performed; and any difference between the two amounts are investigated and accounted for.
Industry Reporting Deadline (APMC calendar and Petrinex calendar)
Submission Guidelines UT-Volumetric Submission (petrinex.ca)
Equalization statements from pipeline and terminal operators explain the Equalization charge or credit based on each shipper’s contribution to the blended quality of the stream in the pipeline. Equalization could be a payment or it could be a receivable. Each month, APMC receives Equalization statements for the purpose of settling the Crown royalty oil qualities blended in a pipeline or terminal.
Each statement is reviewed and verified prior to financial processing. APMC’s internal system matches royalty volumes submitted by the producers to the shippers balance and calculates the Stream and Shipper value for each facility. The overall Equalization amount is calculated by taking the difference between the weighted average shipper differential and weighted average stream differential, then multiplied by the Crown royalty volume. Validation is performed using parameters set out in the CAPP Equalization Procedures.
Industry Reporting Deadline (APMC calendar and Petrinex calendar)
Submission Guidelines UT-Volumetric Submission (petrinex.ca)
