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October 18, 1999

Scheduling-Tracking System Keeps Oil Flowing
Pipeline companies let refiners plan and monitor deliveries via the Web

By Clinton Wilder

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reaking new ground for online business in another old-line industry, four oil and gas pipeline companies have launched a system that lets oil refiners schedule and track shipments of refined fuel products on the Web.

The system, called Transport4, is operated by Transport4 LLC, a joint venture of four pipeline companies that collectively handle transportation of about one-third of the gasoline, fuel oil, diesel fuel, and aviation kerosene used in the United States. Trans- port4 has about 350 registered users from companies such as BP/Amoco, Chevron, Citgo, Marathon/Ashland, and Texaco.

The scheduling of pipeline deliveries is a highly interactive process, traditionally handled by multiple phone calls and faxes. An oil company that wants a shipment delivered from Texas to New Jersey, for example, must inform several pipeline companies serving the various regions along the route about the shipment size and desired dates, a transaction known as nomination. If the carriers have capacity available, they confirm the scheduled dates, a process called "issuing a ticket."

Transport4 lets oil and pipeline company administrators initiate those transactions from a Web browser, while also bringing standardization to multiple data formats used in the industry, such as company, product, and location codes. However, the online system doesn't alter the basics of the refiner-carrier relationship--a key factor in Transport4's quick acceptance by the industry.

"The system has the flexibility to allow companies to still maintain their own business rules, so they can operate the way they always have," says Buster Brown, VP of Transport4 and business development coordinator of Colonial Pipeline Co. in Atlanta, the acting manager of the joint venture. Also participating are Buckeye Pipe Line in Macungie, Pa., Explorer Pipeline in Tulsa, Okla., and TE Products Pipeline (also known as Teppco) in Houston.

Transport4 built the system in conjunction with Web integrator Proxicom Inc. Using business objects built with Microsoft Visual Basic, Visual InterDev, and Active Server Pages, the system runs on Microsoft platforms, including Windows NT, Internet Information Server, Trans- action Server, and SQL Server. A key component is the translation of legacy data formats from the four participating pipeline companies, most of which use Oracle databases.

Transport4 is free to users; members of the joint venture hope the system will pay for itself in reduced processing costs and, more importantly, increased utilization of their pipeline services. The carriers also hope that other pipeline companies will join the system.

Also, Harbinger Corp. and the Sun-Netscape Alliance said they will jointly develop a Web-based procurement and marketplace service for the industry. Harbinger hopes to leverage its market position as a leading provider of electronic data interchange to oil companies. Sun-Netscape hopes to gain the momentum in the procurement market that has largely eluded it, outside of Netscape's large E-procurement contract with John Hancock.

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