The legislation will come into effect following royal assent and proclamation. The price is calculated according to a netback formula which stipulates the transportation costs and marketing and other fees and of costs which will be deducted from the re-sale price to determine the price received by the producer for his gas. For purposes of the Natural Gas Marketing Act a producer is defined as a seller under a producer-shipper contract. The APMC issues such a finding after determination that the shipper has obtained a minimum degree of support for the resale of the netback gas. The shipper must issue a ballot to all producers supplying the netback gas, in proportion to the volume of gas provided by each producer.
Producers return ballots indicating acceptance or rejection of the sale.
Failure to return a ballot is counted as acceptance. A shipper is defined in the Natural Gas Marketing Act as a purchaser under a producer-shipper contract. The shipper typically purchases gas from the producer and obtains transportation to the point at which the gas is re-sold to a downstream buyer. For individual netback arrangements, the costs deducted from the re-sale price to determine the payment to producers are specified in the netback formula. The Natural Gas Marketing Act is amended by this Act.