Derivative instruments not designated as hedging instruments for accounting purposes are utilized to manage the Partnership’s exposure to commodity price risk. For derivative instruments not designated as hedging instruments, the gain or loss on the derivative is recognized currently in earnings.

The following table presents the Partnership’s derivative instruments that were not designated as hedging instruments for accounting purposes.


	September 30, 2020		December 31, 2019
	Gross Notional Volume
	Purchases	Sales	Purchases	Sales
Natural gas— TBtu (1)
Financial fixed futures/swaps	4	25	10	19
Financial basis futures/swaps	3	32	11	30
Financial swaptions (2)	—	8	—	2
Physical purchases/sales	—	1	—	6
Crude oil (for condensate)— MBbl (3)
Financial futures/swaps	—	540	—	990
Financial swaptions (2)	—	90	—	225
Natural gas liquids— MBbl (4)
Financial futures/swaps	1,395	1,410	2,490	2,415
Financial options	—	75	—	—

(1)As of September 30, 2020, 91.9% of the natural gas contracts had durations of one year or less and 8.1% had durations of more than one year and less than two years. As of December 31, 2019, 86.6% of the natural gas contracts had durations of one year or less and 13.4% had durations of more than one year and less than two years.

(2)The notional volume contains a combined derivative instrument consisting of a fixed price swap and a sold option, which gives the counterparties the right, but not the obligation, to increase the notional volume hedged under the fixed price swap until the option expiration date. The notional volume represents the volume prior to option exercise.

(3)As of September 30, 2020, 92.9% of the crude oil (for condensate) contracts had durations of one year or less and 7.1% had durations of more than one year and less than two years. As of December 31, 2019, 72.8% of the crude oil (for condensate) contracts had durations of one year or less and 27.2% had durations of more than one year and less than two years.

(4)As of September 30, 2020, 97.3% of the natural gas liquids contracts had durations of one year or less and 2.7% had durations of more than one year and less than two years. As of December 31, 2019, 72.2% of the natural gas liquids contracts had durations of one year or less and 27.8% had durations of more than one year and less than two years.

Derivative instruments designated as hedging instruments for accounting purposes are utilized in managing the Partnership’s interest rate risk exposures.

The following table presents the Partnership’s derivative instruments that were designated as hedging instruments for accounting purposes.

The following table presents the fair value of the derivative instruments that are included in the Partnership’s Condensed Consolidated Balance Sheets that were not designated as hedging instruments for accounting purposes.


		September 30, 2020				December 31, 2019
		Fair Value
Instrument	Balance Sheet Location	Assets		Liabilities		Assets		Liabilities

		(In millions)
Natural gas
Financial futures/swaps	Other Current	$	1	$	7	$	7	$	5
Financial swaptions	Other Current	—		4		—		—
Physical purchases/sales	Other Current	—		2		5		—
Financial futures/swaps	Other	—		—		—		1


Crude oil (for condensate)
Financial futures/swaps	Other Current	1		13		1		19
Financial swaptions	Other Current	2		—		—		—
Financial futures/swaps	Other	—		1		—		8

Natural gas liquids
Financial futures/swaps	Other Current	17		1		25		3

Financial futures/swaps	Other	1		—		11		2
Total gross commodity derivatives (1)		$	22	$	28	$	49	$	38

(1)See Note 11 for a reconciliation of the Partnership’s commodity derivatives fair value to the Partnership’s Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019.

The following table presents the fair value of the derivative instruments that are included in the Partnership’s Condensed Consolidated Balance Sheets that were designated as hedging instruments for accounting purposes.


		September 30, 2020				December 31, 2019
		Fair Value
Instrument	Balance Sheet Location	Assets		Liabilities		Assets		Liabilities

		(In millions)
Interest rate swaps	Other Current	$	—	$	5	$	—	$	1
Interest rate swaps	Other	—		2		—		2
Total gross interest rate derivatives (1)		$	—	$	7	$	—	$	3

(1)All interest rate derivative instruments that were designated as cash flow hedges are considered Level 2 as of September 30, 2020 and December 31, 2019.


	Amounts Recognized in Income
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(In millions)
Natural gas
Financial futures/swaps gains (losses)	$	(5)	$	2	$	(2)	$	10
Financial swaptions gains (losses)	(4)		—		(6)		—
Physical purchases/sales gains (losses)	(1)		1		—		1
Crude oil (for condensate)
Financial futures/swaps gains (losses)	—		(8)		12		(29)
Financial swaptions gains (losses)	—		—		2		—
Natural gas liquids
Financial futures/swaps gains (losses)	—		13		(1)		32
Total	$	(10)	$	8	$	5	$	14

For derivatives not designated as hedges in the tables above, amounts recognized in income for the periods ended September 30, 2020 and 2019, if any, are reported in Product sales.

The following table presents the components of gain (loss) on derivative activity in the Partnership’s Condensed Consolidated Statements of Income.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(In millions)
Change in fair value of commodity derivatives	$	(15)	$	(2)	$	(17)	$	(3)
Realized gain on commodity derivatives	5		10		22		17
Gain (loss) on commodity derivative activity	$	(10)	$	8	$	5	$	14

The following table presents the effect of derivative instruments that were designated as hedging instruments on the Partnership’s Condensed Consolidated Statements of Income.


	Amounts Recognized in Income
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

	(In millions)
Interest rate swaps losses	$	(2)	$	—	$	(3)	$	—
Total	$	(2)	$	—	$	(3)	$	—

Interest rate derivatives designated as hedges are recognized in income once settled. Settlement amounts recognized in income for the periods ended September 30, 2020 and 2019 are reported in Interest expense.

In the event Moody’s or S&P were to lower the Partnership’s senior unsecured debt rating to a below investment grade rating, the Partnership could be required to provide additional credit assurances to third parties, which could include letters of credit or cash collateral to satisfy its obligation under its financial and physical contracts relating to derivative instruments that are in a net liability position. As of September 30, 2020, under these obligations, the Partnership has posted no cash collateral related to natural gas swaps and swaptions, crude oil swaps and swaptions and NGL swaps and $3 million of additional