OpenLink’s cMotion revolutionizes
the integrated energy marketplace
By Matt Frye, Managing Director – OpenLink
S eamlessly integrated within OpenLink’s industry-leading
Endur framework, OpenLink’s cMotion is a new software
module designed as a comprehensive logistics solution
for crude oil, re ned products, coal, LNG, and soft commodities.
cMotion complements OpenLink’s existing logistics applications:
unit, and value. Any number of products can be con gured
into cMotion for each commodity type. Multiple transportation
types can be handled through con guration with a scheduling
module, such as VLCC vessels, lightering vessels, barges, trucks,
pipelines, and railcars.
gMotion for natural gas, and pMotion for electric power.
Endur is a full, cross-asset framework supporting Straight- New features create new advantages
Through-Processing (STP) from the front- through back-of ce In weighing the pros and cons of integrating cMotion into a com-
that delivers full functionality and product coverage for today’s pany’s business model, it is important to obtain a certain level
traders, risk managers, and operations professionals in the of control on the speci c advantages the module can o er.
energy marketplace. This new STP solution o ers visibility and cMotion enhances Endur’s already vast o ering of features as well as
single entry management of transactional data. When transac- those speci c to the transporting of crude oil, re ned products,
tional information changes, it is readily available throughout the coal, LNG, and soft commodities.
system. For instance, the user will be able to create volume strategies
cMotion was designed and developed by OpenLink’s trans- that will give ultimate exibility in managing trade volumes and
portation and petroleum industry experts for rail, truck, crude transportation. The new functionality allows the user to break
and products pipelines, barge, and vessels. These transpor- apart and strategize the transaction in the following ways:
tation modes share several things in common: the products • By location on a multi-location deal
transported have quality and quantity measurement require- • By period on a multi-month deal
ments; there is a time delay between receipt and delivery of the • By partial volume
product; the transactions for these products carry substantially • By complete deal in the strategy
more information than other types of transactions; and pricing is • By organizing similar trades by quality, location, or transporta-
sometimes based on events other than those typical to natural tion methods
gas or electricity. • By single or multiple waterborne voyages
• By single or trainload rail movements.
A comprehensive solution The system captures delivery ticket and inspection report
A diverse group of industries stand to bene t from cMotion , information for each loading or discharge event. All dates asso-
including large, integrated crude producers and re neries, pet- ciated with the receipts and deliveries of product are maintained
rochemical supply chain organizations, large integrated energy in the system. Quantity and quality measures are recorded.
rms that make hydrocarbon procurement activities in support of Pricing adjustments can also be made to the deal price, using
power generation, and independent trading rms or banks seek- quality-based conditions con gured on the transaction.
ing an integrated solution for energy and commodity products. Additionally, Endur has been enhanced to allow for the pric-
cMotion supports multiple commodities, grades, and trans- ing, valuation, and payment triggering to be based o of event
portation types, manages nominations and nomination group- dates such as bill of lading date, notice of readiness, commence-
ings, such as product commitments, transportation schedules, ment dates, or any other user-con gured event date. This func-
and inventory movements, while at the same time handling tionality allows for the settlement of large monetary liabilities,
dates, such as nomination dates and changes, and delivery dates based on events, not on the monthly billing cycle common to
supporting event-based pricing, valuation and payment. Addi- other products.
tionally, cMotion can record deliveries, such as actual quantity
/ quality and price adjustments, and ticket pricing / valuation, Calculating demurrage and delay
track action item “to-do” lists, and store documents and settle- Demurrage can best be de ned as the monetary penalty
ments. incurred from delays associated with the transportation of com-
Not only can cMotion manage multiple commodities types, modities. Most signi cantly among the types of demurrages
such as crude oils, NGL and LPG, re ned products, petrochemi- are those in connection with the movement of commodities by
cals, coal, LNG, agriculture, etc, but it can also track standard ocean going vessels. With cMotion , demurrage calculations
and reported quality measurements con gured into Endur for quantifying the signi cant delays, and resulting charges, can be
a given product. Each measurement line item de nes type, derived down to the minute.
E ne r g y Tr a d ing & R is k M a na g e m e nt ◆ www.og .com
This statement of excess time or “lay time statement” can be management system, or store the document completely in the
quickly generated by cMotion. This statement can then be com- Endur database. This gives the user added information at his/
pared to similar documents presented by vessel owners. Also, her ngertips, speci c to the job function being performed.
the demurrage calculator will prove helpful when attempting to cMotion was designed to capture and manage all of the
pass these charges through to commercial counterparties who information required for the extensive noti cation and report-
may consequently be responsible for the delays. The cMotion ing processes within this industry. Standard reports required for
demurrage calculator will assist with the all phases of calculating, logistics noti cations; contract noti cation and con rmations
invoicing, tracking, and organizing demurrage claims in the vari- are part of the system. Most importantly, these reports are
ous stages of the contentious settlement process. customizable by the client. cMotion provides the tools needed
to quickly and accurately report information for external and
Mark-to-intent valuation, action items, internal purposes.
and inventory management Companies seeking to streamline business and maximize ef -
The concept of mark-to-intent is to calculate the mark-to-market ciency are encouraged to explore this new functionality in Endur
valuation of a product at an intended location other than the and to take advantage of these cutting edge technological tools
location on the deal -- at a delivery date later than the load date in the marketplace. As the global energy market becomes more
on the original supply deal. The mark-to-intent valuation gives competitive, the cost of lagging behind can quickly erode a
a better representation of the movement of crude oil, re ned leveraged position that means the di erence between pro t and
products, coal, LNG, and soft commodities because of the time loss. OpenLink’s cMotion is the next generation for scheduling
delay in delivering the product. Natural gas and electricity on and control, and the future for the integrated energy market-
the other hand, can be modeled as concurrent receipts and place.
Extensive noti cations and documentation are required when About the author
dealing with the physical movement of commodities. To better Matthew Frye is managing director of OpenLink’s Houston divi-
aid commercial and operations personnel in the arduous process sion. He has 20 years of experience in energy markets, including
of a ecting a physical commodity transaction, cMotion employs trading, risk management, and operations software. Frye leads
an Action Item list or “To Do List.” This list serves as a means of a team of business analysts and software engineers focused on
automatically communicating data at the completion of a trans- dynamic, integrated solutions for energy trading rms. He can be
action or other signi cant event such as a scheduling nomination. reached at 713-655-9600, or firstname.lastname@example.org.
Notices to concerned parties can be con gured, customized and
conveyed to commercial counterparties, operators, transporters, About OpenLink Founded in 1992, OpenLink is a leading
inspectors, etc. cMotion uses the list of actions to ensure that no developer of energy and nancial trading, risk management, and
activity falls through the cracks. operations processing software solutions. The company’s Next
cMotion also greatly enhances Endur in the area of inventory Generation eXtensible (NGX) platform supports the most rigor-
management/valuation. Endur will now handle di erent inven- ous business requirements of rms trading in crude products,
tory accounting methodologies, such as: energy, interest rate derivatives, xed income securities, foreign
exchange, money markets, metals, softs and other commodities.
LIFO – Last In, First Out OpenLink’s global client base includes 70+ clients such as Banco
FIFO – First In, First Out
de Mexico, Bank of America, Bank for International Settlements,
Bank of Canada, HBOS Treasury Services, Bridgeline Holdings,
The value of delivery into the inventory tier/average will be Citigroup Global Market, Inc., Deutsche Bank, Enbridge, Nexen,
the cost of the supply plus transportation, adjusted for any unac- Shell, Statoil and Vattenfall Europe Trading. Headquartered in
counted for volumes. Long Island, New York, and with of ces in London, Houston,
New York City, Berlin, Sydney, and São Paulo, OpenLink employs
Simple, custom solutions more than 370 professionals worldwide.
cMotion gives a client the ability to blend products together
to yield a di erent product, often with the intent of meeting a
minimum commercially accepted quality. Blending and tracking
of inventories by quantity and quality can be managed using
cMotion ’s Inventory Manager, thus simplifying this burdensome
Another simpli cation comes in the area of document OpenLink
management. OpenLink has enhanced Endur to include linking 1502 Reckson Plaza
15th Floor, West Tower
documents to key areas of the system. These areas include Uniondale, NY 11556
contracts, transactions and nominations. The user can create a www.olf.com
link to any type of stored document, a hyperlink to a document 516-227-6600
www.og .com ◆ Energy Trading & Risk Management 13