Schedule K in the SSC has been designed to provide greater comfort, simplicity and flexibility to both Lenders and Borrowers who want to use third party finance for purchasing gas to store in Rough. The arrangements reduce the risk for the Lender by providing the Lender the ability to trigger (at any time) the expedited assignment of the storage capacity.
The expedited Capacity Assignment will be completed within five business days. In contrast, the standard arrangements for Capacity assignment (set out in clauses 22 and 23 of the SSC) require the Assignment Notice to be provided to CSL on the 1st day of the month, with the assignment to take effect one month later. The expedited mechanism provides banks or other financing institutions with the certainty and security regarding access to the underlying asset (capacity and gas in store) in order for them to provide financing to storage customers on more attractive terms.
In order to take advantage of the expedited Capacity Assignment facility, CSL must receive a Notice of Finance signed by the Borrower in accordance with the provisions of Schedule K. Customers are under no obligation to sign the Notice of Finance. However, without a Notice of Finance, customers will be subject to the standard Capacity Assignment arrangements set out in clauses 22 and 23 of the SSC.