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EXHIBIT 10.22
ENRON
TRANSWESTERN PIPELINE COMPANY
P. O. Xxx 0000 Xxxxxxx, Xxxxx 00000-0000 (000) 000-0000
January 3, 1994
Xx. Xxxx Xxxxxxxxx
Continental Natural Gas, Inc.
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Re: Interruptible Transportation Service
Agreement No. 20606
Dear Xxxx:
Transwestern Pipeline Company ("Transwestern") hereby offers
interruptible transportation rates ("IT Rates") to Continental Natural Gas,
Inc. ("Continental") for the interruptible transportation of natural gas
pursuant to the Interruptible Transportation Service Agreement between
Transwestern and Continental, Contract No. 20606 (the "Service Agreement").
Effective January 1, 1994 through and including June 30, 1994, the IT
Rates applicable for deliveries from Transwestern's Panhandle Zone to delivery
points within Transwestern's Panhandle Zone shall be the maximum rates
authorized by Transwestern's FERC Gas Tariff, as may be revised from time to
time, and shall include applicable ACA, GRI, and TCR surcharges. Provided
however, if Continental ships a minimum of 900,000 Dth during the six (6) month
term hereof, Transwestern shall credit Continental's account for up to a
maximum of 1,260,000 Dth on its invoice for the sixth month with the difference
between: (i) Transwestern's maximum rate for deliveries from the Panhandle Zone
to delivery points in the Panhandle Zone plus applicable surcharges and posted
fuel, and (ii) a rate equal to $.0772 plus applicable surcharges and posted
fuel. Any volumes shipped in excess of 1,260,000 Dth during the term hereof
shall be at Transwestern's maximum rates (or posted rates, if lower).
In the event Transwestern's production and gathering or field service
facilities are utilized Transwestern's then effective production and gathering
or field area service charge will be assessed.
For interruptible transportation services under transportation service
agreements other than the one referenced above, the IT Rates shall be the
maximum rates authorized by Transwestern's
Part of the Enron Group of Energy Companies
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Continental Natural Gas, Inc.
Interruptible Transportation Service Agreement No. 20606
Page 2
FERC Gas Tariff, as amended from time to time, plus all applicable surcharges
and fuel, or any other rates as otherwise mutually agreed.
Continental shall have the right to accept the lower posted rate in
the event that, at any time, Transwestern's posted interruptible rate for the
path(s) specified herein is less than $0.0772 plus applicable surcharges, for
such time as the posted rate remains lower than the rate hereunder.
If it is determined by Transwestern, as a result of any decision or
regulation issued by the FERC or other administrative agency or court of
competent jurisdiction that: (i) any discount provided to Continental by
Transwestern would, in effect, require Transwestern to provide similar
discounts to other shippers or that the providing of such discounted rates to
Continental provides Continental an undue preference or would subject other
shippers to undue discrimination, or (ii) Transwestern is required to allocate
costs to the service provided hereunder or recognize revenue as if it were
charging rates in excess of the discounted rates provided for herewith, then
Transwestern shall immediately notify Continental of any such determination,
and if Continental is not already paying the then effective maximum
transportation rate, then Continental shall, on a prospective basis, pay the
maximum rate provided for in Transwestern's then effective FERC Gas Tariff, as
revised from time to time, effective upon the date of said notice, without any
credit. In such event, Continental shall receive a credit as described in the
second paragraph of this letter agreement for up to 1,260,000 Dth, provided
that it has shipped a minimum of gas equal to 5,000 Dth/d multiplied by the
number of days during the term hereof which predate such notice date.
All interruptible transportation will be in accordance with
Transwestern's FERC Gas Tariff, Rate Schedule ITS- 1, as amended from time to
time, and the underlying Service Agreement between Transwestern and
Continental. Notwithstanding anything herein that may be interpreted to the
contrary, in no event shall the rates to be paid by Continental hereunder
exceed the maximum or be less than the minimum rates authorized by
Transwestern's FERC Gas Tariff, as amended from time to time. Transwestern
hereby reserves its right to seek FERC approval to change the rates on its
system.
This Agreement and the terms and conditions hereof shall be
confidential and shall not be voluntarily disclosed to third parties, other
than auditors and outside counsel, without prior written consent of both
parties; provided, however, that the parties expressly agree that disclosure
may be made if requested or required by or through any administrative,
regulatory, legislative, legal or judicial action (including, by way of
example, compliance with FERC reporting requirements), or in the event issues
arise which relate to the interpretation, applicability, or enforcement of this
Agreement.
Neither party may assign this Agreement or any rights and obligations
hereunder to any other entity in whole or in part without the prior written
consent of the other party.
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Continental Natural Gas, Inc.
Interruptible Transportation Service Agreement No. 20606
Page 3
This Agreement is subject to (1) all applicable laws, rules,
regulations, orders and decisions of regulatory bodies of competent
jurisdiction, and (2) SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS.
If the foregoing is acceptable to Continental, please indicate your
agreement by signing two originals of this Agreement in the space provided
below and returning one fully executed original to the undersigned.
Very truly yours,
/s/
Xxx X. Xxxxx
Account Manager
Marketing - Transportation
AGREED AND ACCEPTED AGREED AND ACCEPTED
This 10th day of March, 1994 This 17th day of March, 1994
CONTINENTAL NATURAL GAS INC. TRANSWESTERN PIPELINE COMPANY
By: /s/ By: /s/
-------------------------- -------------------------------
Xxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx
Title: Vice President of Marketing Title: Vice President - Marketing
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TRANSWESTERN
PIPELINE
COMPANY
An ENRON Company
TRANSPORTATION SERVICE AGREEMENT - FORM K
RATE SCHEDULE ITS-1
(For internal use only)
Transportation Request Number: 1083
Effective Date: 11-26-91
Transportation Service Agreement No: 20606
THIS TRANSPORTATION SERVICE AGREEMENT ("Agreement") by and between
Transwestern Pipeline Company, hereinafter referred to as "Seller", and
Continental Natural Gas, Inc., a marketer, herein referred to as "Buyer",
covering the transportation of natural gas on an interruptible basis by Seller
for Buyer (on behalf of and in furtherance of a transportation service
performed by n/a, a n/a*) as more particularly described herein is entered into
in accordance with the following terms and conditions:
1. This transportation shall be provided pursuant to Subpart G of Part 284 of
the Federal Energy Regulatory Commission's ("Commission") regulations.
2. Maximum Daily Transportation Quantity (MAXDTQ): 15,000 Dth
3. Term: This Agreement shall become effective on the date of execution
hereof of Buyer and shall continue for a primary term of one (1) year and
month to month thereafter unless terminated at any time subsequent to the
primary term by either party upon thirty (30) days prior written notice to
the other party.
4. Rate: Unless Seller agrees to charge Buyer a lower rate, Buyer shall pay
Seller each month for transportation service rendered hereunder at the
maximum rates or charges in effect from time to time under Rate Schedule
ITS-1, or an effective superseding rate schedule on file with the
Commission.
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5. Address to Buyer:
for notices for invoices:
Continental Natural Gas, Inc. Continental Natural Gas, Inc.
X.X. Xxx 00000 X.X. Xxx 00000
Xxxxx, XX 00000 Xxxxx, XX 00000
6. This Agreement supersedes and cancels the following Transportation Service
Agreement(s) between the parties hereto:
None
7. Other Provisions:
None
8. Additional Terms and Conditions: The additional Terms and Conditions
listed on the reverse side hereof and the Appendices incorporated herein
are made a part of this Agreement.
This Transportation Service Agreement when executed by Buyer constitutes a
contract with Transwestern Pipeline Company for the transportation of
natural gas, subject to the terms and conditions appearing on the face and
reverse side hereof and the attached Appendices.
CONTINENTAL NATURAL GAS, INC., Buyer TRANSWESTERN PIPELINE COMPANY
By /s/
----------------------------------
Title /s/
-------------------------------
Executed this 10th day of December, 1991 By /s/
---------------------------------
Title /s/
Attest or Witness: ------------------------------
/s/
------------------------------------
*Clause added only if applicable.
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TRANSPORTATION SERVICE AGREEMENT - FORM K
TERMS AND CONDITIONS
SECTION 1 - TRANSPORTATION QUANTITY
1.1 Subject to the terms, conditions and limitations hereof and of Seller's
Rate Schedule ITS-1, Seller agrees to receive and transport, on an
interruptible basis, to or for the account of Buyer, quantities of gas up
to the MAXDTQ set forth on the face of this Agreement and to deliver
thermally equivalent volumes less the percentage of gas used by Seller in
providing the transportation service as specified in Seller's Rate
Schedule IST-1.
1.2 Seller agrees to transport natural gas for Shipper in excess of the MAXDTQ
on an interruptible basis provided that Seller has determined that it has
sufficient capacity to transport such excess volumes.
SECTION 2 - RECEIPT AND DELIVERY
2.1 Buyer agrees to tender, or cause to be tendered, gas for transportation at
the Point(s) of Receipt identified in Appendix "A" at pressures sufficient
to effect delivery into Seller's facilities not to exceed the maximum
allowable operating pressure; provided, however, Seller shall have no
obligation to provide compression and/or alter its system operation to
enable Buyer to effectuate said deliveries.
2.2 Seller agrees to transport and deliver gas to Buyer, or for Buyer's
account, at the Point(s) of Delivery identified in Appendix "B"; provided,
however, Seller shall have no obligation to provide compression and/or
alter its system operation to effectuate said deliveries.
2.3 Both Seller and Buyer recognize that due to variations in operating
conditions, daily and monthly deliveries hereunder by Seller may be
greater or less than the corresponding receipts less gas used by Seller
for transportation hereunder. Buyer and Seller agree that any excess or
deficiency in such receipts, less gas used, and deliveries shall be
adjusted or corrected in gas as soon as operating conditions reasonably
permit.
2.4 Buyer agrees to identify the corporate entity or entities ultimately
receiving the gas and include the names in Appendix "C" of the Service
Agreement if other than a local distribution company, interstate pipeline
company, or intrastate pipeline company purchasing the gas for system
supply. Buyer agrees to notify Seller in writing of any change in the
identity of the entities ultimately receiving the gas.
SECTION 3 - TERMINATION
3.1 Notwithstanding the "Term" set forth in paragraph 3 on the face of this
Agreement, this Agreement shall terminate upon written notice by Seller to
Buyer within forty-five (45) days
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from the effective date of this Agreement if Seller determines that
incomplete or inaccurate information has been submitted to effectuate this
transportation service which causes such service to not comply with
Seller's FERC Gas Tariff or the Commission's Regulations.
3.2 Notwithstanding any other provision in this Agreement to the contrary,
should Seller at any time in its sole discretion elect to terminate on a
non-discriminatory basis all transportation services commenced pursuant to
Part 284 of the Commission's Regulations on or after October 9, 1985, then
Seller may terminate Buyer's ITS-1 Transportation Service Agreement upon
five (5) days written notice to Buyer.
3.3 Termination of this Agreement shall not relieve Seller and Buyer of the
obligation to correct any volume imbalances hereunder, or Buyer to pay
money due hereunder to Transwestern. Accordingly, Section 2.3 of the
Agreement shall survive termination until all imbalances have been
eliminated.
SECTION 4 - GENERAL
4.1 This Agreement in all respects shall be subject to the provisions of Rate
Schedule ITS-1 as well as the General Terms and Conditions, if applicable,
contained in Seller's F.E.R.C. Gas Tariff Second Revised Volume No. 1, as
may be revised from time to time.
4.2 Seller shall have the unilateral right to file and seek Commission
approval under Section 4 of the Natural Gas Act (NGA) to change any rates,
charges or other provisions set forth in Rate Schedule ITS-1 or the
general terms and conditions of its FERC Gas Tariff from time to time and
to place such changes in effect in accordance with Section 4(c) of the NGA
and this Transportation Service Agreement shall be deemed to include such
changes and any changes which become effective by operation of law and
F.E.R.C. Order, without prejudice to Buyer's right to protest the same.
4.3 Seller's Rate Schedule ITS-1 is hereby incorporated by reference and made
a part hereof.
SECTION 5 - NOTICES
5.1 Any notice, statement, or xxxx provided for in this Agreement shall be in
writing and shall be considered as having been given if delivered
personally or if mailed by United States mail, postage prepaid, to Buyer
when sent to the address set forth on the face of this Agreement and to
Seller when sent to the following:
All Notices: Transwestern Pipeline Company
Attn: Transportation Administration
Department X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Payments: Transwestern Pipeline Company
Attn: Gas Accounting
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
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"APPENDIX A"
TRANSPORTATION SERVICE AGREEMENT UNDER ITS-1 RATE SCHEDULE
BUYER: Continental Natural Gas, Inc.
DATE: 11-26-91
1) Appendix A Receipt Points:
Receipt Points under this Agreement shall include all Receipt Points
listed by Seller in its Transportation Point Catalog, as amended from time
to time (the "Catalog"), on file and available for inspection at the
offices of Seller in Houston, Texas, which Catalog is hereby made a part
hereof and incorporated herein by reference.
2) At or prior to the time Buyer nominates gas at a Receipt Point not
previously utilized under this Agreement, Buyer shall provide the
following information to Seller for gas to be transported at said Receipt
Point:
a) The name of each produce and working interest owner from which
the gas was produced, and whether said party is affiliated
with Seller.
b) Provide the producer, region, state, and county from which the
gas is produced.
c) State whether a marketing affiliate of Seller is involved in
the transaction in any way, and if yes, the role of the
affiliate.
d) State whether any of the gas to be transported is subject to
take-or-pay relief, and if yes, the percentage of said gas
that is released gas from Seller's system.
e) Marketing affiliates of Seller must indicate if the gas is
being sold at a loss, and if yes, the amount of the loss.
3) In the event that Seller determines that it will no longer provide
interruptible transportation service under its "All Receipt Points"
program, Seller shall give to Buyer thirty days prior written notice that
effective on the first day of a designated calendar month, gas will be
transported for Buyer only from receipt points mutually agreeable to
Seller and Buyer and listed on an amended Appendix A to be part of this
Agreement. In the event Buyer fails to provide a list of mutually
agreeable receipt points at least five (5) days prior to the first day of
the designated calendar month, Buyer and Seller agree that this Agreement
shall terminate on the first day of the designated calendar month
newea Xxxxxxxx Xx. 00000
