Operational Balancing. KMLP agrees that it will negotiate with each entity that operates facilities interconnecting with KMLP at Receipt Points or Delivery Points (Balance Operator) in a good faith effort to reach an agreement to deal with imbalances at such Receipt Point(s) or Delivery Point(s). At Receipt Points, KMLP may rely on PDAs under Section 7 of these General Terms and Conditions, which OBA Agreement would be a form of a Predetermined Allocation, subject to the following conditions:
(a) Such agreement must set out a mutually agreeable procedure for dealing at the Delivery Point(s) or Receipt Point(s), as between KMLP and Balance Operator, with any difference between confirmed nominations and actual physical Gas flow caused by operational conditions; such an agreement may include imbalances charges and penalties, and/or limitations on the volume of imbalance which may be accommodated, but KMLP is not obligated to agree to include any provisions for cashout of imbalances;
(b) The Balance Operator must meet the same creditworthiness standards as Shipper;
(c) KMLP and Balance Operator must not have previously entered into such agreement which was terminated because of Balance Operator's failure to perform. Nothing herein is intended to restrict KMLP's right to terminate in accordance with its terms any agreement entered into hereunder, including without limitation the right to terminate for Balance Operator's failure to perform consistent with its obligations under the agreement.
Operational Balancing. Despite the efforts described above, the Parties acknowledge that (a) imbalances between receipts and deliveries and variances between scheduled quantities and actual quantities may occur and (b) the Transportation Contract may provide for the payment of penalties, including, without limitation, imbalance, cashout and scheduling penalties. Company shall be responsible for any penalties or charges assessed by Transporter(s) upstream of the Delivery Point, under the Transportation Contract.
Operational Balancing. Buyer shall be liable for any payments and balancing penalties assessed against Seller by the Receiving Pipeline or otherwise payable by Seller pursuant to its gas transportation agreements if and when Buyer fails to take delivery of any Conforming SNG that has been nominated for delivery to Buyer by Seller in accordance with the Scheduling and Nominating Protocol. All such imbalance payments and penalties incurred by Seller with respect to imbalances resulting from Buyer's failure to take deliveries of Conforming SNG that has been nominated to Buyer shall be added to the O&M Component of the Base Contract Price in the month incurred. Seller shall be liable for all imbalance payments and penalties incurred by Buyer, if any, with respect to imbalances resulting from Seller's failure to deliver SNG in the quantities nominated. Seller shall also be liable for all other such payments and penalties assessed in connection with the imbalances resulting from any or associated with the nomination of any Incremental Production. Seller shall use Commercially Reasonable Efforts to eliminate and/or mitigate imbalances with the Receiving Pipeline.
Operational Balancing. Seller shall enter into an operational balancing agreement or such other balancing arrangements with the Receiving Pipeline prior to the Commercial Production Date. Buyer shall have the right to review and comment on the operational balancing agreement or other balancing arrangements prior to execution by Seller. Buyer shall be liable for any payments and balancing penalties assessed against Seller by the Receiving Pipeline or otherwise payable by Seller pursuant to its gas transportation agreements if and when Buyer fails to take delivery of any Conforming SNG that has been nominated for delivery to Buyer by Seller in accordance with the Scheduling and Nominating Protocol. All such imbalance payments and penalties incurred by Seller with respect to imbalances resulting from Buyer’s failure to take deliveries of Conforming SNG that has been nominated to Buyer shall be added to the O&M Component of the Base Contract Price in the month incurred. Seller shall be liable for any payments and balancing penalties assessed against Buyer by the Receiving Pipeline or otherwise payable by Buyer, if any, with respect to imbalances resulting from Seller’s failure to deliver Conforming SNG in the quantities nominated. Seller shall also be liable for all other such payments and penalties assessed in connection with the imbalances resulting from or associated with the nomination of any Incremental Production. Seller shall use Commercially Reasonable Efforts to eliminate and/or mitigate imbalances with the Receiving Pipeline.
