ALLIANCE PIPELINE LIMITED PARTNERSHIP by its General Partner, ALLIANCE PIPELINE LTD. ( Alliance Canada or Alliance )

Transcription

1 ALLIANCE PIPELINE LIMITED PARTNERSHIP by its General Partner, ALLIANCE PIPELINE LTD. ( Alliance Canada or Alliance ) BINDING OPEN SEASON March 28 May 30, 2018 For: Capacity Expansion, Capacity Turn Backs, and Term Extensions Note: Capitalized terms not defined herein have the definitions set out in Alliance Canada s NEBapproved Tariff. Binding Open Season Elements Capacity Expansion In response to expressions of interest from customers for additional capacity, Alliance Canada is conducting this open season for additional firm transportation services from one or more designated receipt points in either Zone 1 or Zone 2 to the Alliance Trading Pool ( ATP ) or to the point of interconnection between the Canadian segment and the USA segment of the Alliance Pipeline system (the border ), and from the ATP to the border ( Expansion Firm Service or Expansion Firm Services as the context requires). This open season is intended to provide interested parties with the opportunity to make firm commitments to Alliance Canada for Expansion Firm Services in support of an Alliance Canada expansion project, and will also provide a methodology for allocating the available volume amongst the interested parties should the sum of requested service volumes exceed the volumes made available as a result of an Alliance Canada expansion project. The Expansion Firm Services would be made available primarily through incremental compression along the Alliance Pipeline system to provide approximately 11, m 3 (400 MMcf) per day of Expansion Firm Service capacity. It is anticipated that the Expansion Firm Service capacity can be placed into service on or about November 1, Turn Back of Existing Firm Service Capacity In conjunction with this open season and in accordance with the rules of this open season document, Alliance Canada is also providing the opportunity for current shippers ( Shippers ) holding Firm Service to request to permanently relinquish ( Turn Back ) all or part of that service. In the event that Alliance Canada elects to proceed with a Capacity Expansion, and as part of that project accepts a request(s) for Turn Back of existing Firm Service capacity, any such Turned Back capacity would be allocated to Shippers and prospective shippers requesting Expansion Firm Service in this open season. Term Extension of Existing Firm Service Alliance Canada is also providing the opportunity for Shippers holding Firm Service to request to extend the term of their existing Firm Service contracts at Alliance s term-differentiated tolls approved by the NEB. 1

2 Binding Open Season Process Request for Expansion Firm Service This open season document describes how Shippers and prospective shippers may submit a request for Expansion Firm Service and the process Alliance will follow to evaluate the requests for service and to award service. As outlined below, the submission of a request for Expansion Firm Service ( Request for Expansion Firm Service ) (Attachment 1) by a Shipper or prospective shipper that has not been withdrawn prior to the Closing Time in accordance with 3(f) below will constitute a formal and binding offer to contract for any Expansion Firm Service that is awarded by Alliance to that Shipper or prospective shipper in accordance with this open season. Accordingly, any Shipper or prospective shipper that submits a Request for Expansion Firm Service and is awarded Expansion Firm Service in accordance with this open season will be obligated to execute and deliver a Precedent Agreement for Firm Transportation Service (Expansion Capacity) in the form attached to this open season document (Attachment 2) in respect of the service so awarded. Request for Turn Back of Existing Firm Service Capacity Current Shippers may submit a request to Turn Back their existing Firm Service using the Request to Turn Back Service form (Attachment 3). As with a Request for Expansion Firm Service, the submission of a Request to Turn Back Service will constitute a formal and binding offer on the part of the Shipper to Turn Back the service that may be accepted by Alliance in accordance with this open season. Accordingly, any Shipper that submits a Request to Turn Back Service which is accepted by Alliance will be obligated to execute and deliver, in the form provided by Alliance, an amending agreement to the Shipper s existing Firm Transportation Service Agreement (Firm Service Agreement) evidencing such Turn Back. Request for Term Extension of Existing Firm Service Current Shippers holding Firm Service may submit a request to extend the term of their existing Firm Service contracts for a minimum of 10 years from the in-service date of Expansion Firm Service using the form titled Request for Term Extension of Existing Firm Service found at Attachment 4. The submission of a Request for Term Extension of Existing Firm Service will constitute a binding offer on the part of the Shipper to extend their contract term, and accordingly, such Shipper will be obligated to execute and deliver, in the form provided by Alliance, an amending agreement to the Shipper s existing Firm Service Agreement evidencing such extended term. Decision to Proceed Notwithstanding any other term herein, the decision to proceed with any expansion to Alliance Canada s pipeline system pursuant to this open season, the volume of any expansion service capacity, the nature, size, configuration and timing of any required expansion facilities, the decision to accept any amount of Turn Back capacity, and the decision to accept any amount of existing firm service for term extension, will be determined by Alliance in its sole discretion based in part on the requests for service, requests to 2

3 Turn Back service, if any, and requests for term extensions of existing firm service agreements, in response to this open season. Further, any expansion service and facilities shall be subject to the receipt of all required approvals from the National Energy Board ( NEB ), and from the Federal Energy Regulatory Commission ( FERC ) for the matching expansion capacity in the USA, and to the other conditions set out in the attached form of Precedent Agreement for Firm Transportation Service (Expansion Capacity) (Attachment 2). BINDING OPEN SEASON - DETAILS Capacity Expansion 1. Description of Service (a) Alliance intends to make available approximately 11, m 3 (400 MMcf) per day, in aggregate, of Expansion Firm Service, consisting of any combination of: i) Expansion Firm Receipt Service (EFRS) from a Shipper or prospective shipper-designated receipt point to the Alliance Trading Pool (ATP), together with Expansion Firm Delivery Service (EFDS) from ATP to the point of interconnection between the Canadian segment and the USA segment of the Alliance Pipeline system (the border ); and ii) Expansion Firm Full Path Service (EFFPS) from a Shipper or prospective shipper-designated receipt point upstream of ATP to the border. Both i) and ii) must be matched with corresponding service (EFT-1) on the USA segment of the Alliance Pipeline system, which EFT-1 service is being made available through the Binding Open Season of Alliance Pipeline L.P. EFRS and EFFPS capacity to be made available from Zone 2 may be limited at Alliance s sole discretion to less than 400MMcfd due to operational constraints. Expansion Firm Service will have no renewal rights upon expiry of an Expansion Firm Service Agreement, provided however that a Shipper or prospective shipper may request additional term by notifying Alliance one year prior to expiry of the term of its desire to renew, and Alliance may, at its discretion, accept the request to renew or agree to negotiate with the Shipper or prospective shipper to extend the term of the Shipper s or prospective shipper s Expansion Firm Service agreement. EFDS shippers will not be entitled to receive Rich Gas Credits or Debits. EFRS and EFFPS shippers will not be entitled to receive Priority Interruptible Transportation Service (PITS), or to request the staging of their Contracted Capacity. (b) All expansion service will commence on the later of (i) November 1, 2021 and (ii) the actual date that Alliance is able to commence providing such service. Where Alliance is able to provide a portion or all of the requested expansion service in advance of November 1, 2021, Alliance may allocate such capacity, on a pro rata basis, to those expansion shippers who wish to take the capacity earlier. (c) Although the new capacity is planned to be placed into service on November 1, 2021, Alliance does not guarantee any in-service date and will have no liability for any delay or change to any in-service date or for any cancellation or change in scope of any proposed expansion facilities. (d) The minimum term for the expansion service under this open season is 15 years. The expansion service will be awarded to prospective shippers in accordance with the procedures outlined in 4. below. 3

4 (e) No Shipper or prospective shipper may request or be awarded Expansion Firm Service in an aggregate amount exceeding 2, m 3 /day (100 MMcf/d) of capacity. This limitation applies collectively to each Shipper or prospective shipper and their affiliates, unless a participating affiliate has an independent business reason for submitting a bid, such determination to be in Alliance s sole discretion. In the event a Shipper or prospective shipper submits multiple bids for Expansion Firm Services, each bid will be deemed to supersede every previous bid and Alliance will evaluate only the last received bid from that Shipper or prospective shipper. 2. Transportation Tolls (a) Alliance will apply to the NEB for approval of the tolls specified in the Precedent Agreement for Firm Transportation Service (Expansion Capacity) found at Attachment 2. (b) Shippers and prospective shippers that are awarded firm service in this open season will be obligated to pay the actual NEB-approved tolls for that service, and such other charges as may apply from time to time, and provide fuel in-kind subject to the system receipt and delivery fuel requirements, all in accordance with Alliance Canada s NEB-approved Tariff. 3. Submission of Requests for Expansion Firm Service (a) In order to request Expansion Firm Service in this open season, Shippers and prospective shippers must complete and submit to Alliance by , a Request for Expansion Firm Service, in the form attached to this open season document (Attachment 1), at the following address: BD@alliancepipeline.com (b) Requests for Expansion Firm Service must be received by Alliance at the address specified above prior to 12:00 noon (Mountain Daylight Time) on May 30, 2018 ( Closing Time ). Alliance will not consider Requests for Expansion Firm Service that it receives after the Closing Time. Alliance reserves the right, in its sole discretion, to reject any Request for Expansion Firm Service that is incomplete, modified or otherwise fails to comply with the requirements of this open season document. (c) Alliance will, via and as soon as reasonably practicable following receipt of a Request for Expansion Firm Service prior to the Closing Time, either confirm to Shipper or prospective shipper Alliance s receipt of the Request for Expansion Firm Service and assign an identification number to the Request for Expansion Firm Service, or advise the Shipper or prospective shipper that the Request for Expansion Firm Service fails to conform with the requirements of this open season document and will not be considered. Alliance will have no obligation to provide any advice to a Shipper or prospective shipper when Alliance receives a Request for Expansion Firm Service within 3 hours or less of the Closing Time. (d) Shippers and prospective shippers must specify in the Request for Expansion Firm Service the requested Receipt Point(s) (e.g., AB33), or in the case of a new interconnection site, the location of the new receipt point, as well as the Contracted Capacity for the requested Expansion Firm Service. In each request for Expansion Firm Service that consists of a combination of EFRS and EFDS, the aggregate 4

5 Contracted Capacity for EFRS must match the Contracted Capacity specified for EFDS (net of fuel). Alliance reserves the right to reject any Request for Expansion Firm Service if it determines, in its sole discretion, that a requested new interconnecting receipt point would not be operationally feasible, or not economically viable. (e) Shippers and prospective shippers must also specify in the Request for Expansion Firm Service the minimum Contracted Capacity that would be acceptable in the event that pro-rationing of Expansion Firm Service is required. Shippers and prospective shippers may indicate a minimum Contracted Capacity of any volume equal to or less than the maximum Contracted Capacity requested, down to and including zero (i.e., no minimum). (f) Shippers and prospective shippers may submit one or more Requests for Expansion Firm Service, provided however that each Request will be deemed to supersede every previous Request and Alliance will evaluate only the last received Request. A Shipper or prospective shipper that has submitted a Request for Expansion Firm Service may withdraw its Request for Expansion Firm Service at any time prior to the Closing Time by giving notice of withdrawal to Alliance. (g) All requests for EFRS-EFDS will be deemed to be conditional on the award to the same party or its affiliate, or to a counterparty with whom such party has made delivery arrangements, of corresponding transportation service on the U.S. Pipeline. All requests for EFFPS will be deemed to be conditional on the award to the same party or its affiliate of corresponding transportation service on the U.S. Pipeline. Shippers and prospective shippers must also indicate in their Request for Expansion Firm Service whether their gas will meet Alliance s tariff gas quality specification for hydrocarbon dewpoint, and if not, such request will be deemed contingent on the availability of firm rich gas service (FRGS). If, in Alliance s sole discretion, FRGS is available, such request will no longer be deemed contingent, but rather will be binding on the Shipper or prospective shipper, as applicable. Alliance will not consider any Request for Expansion Firm Service made by a Shipper or prospective shipper in this open season that is otherwise contingent or conditional. (h) The submission of a Request for Expansion Firm Service constitutes a formal offer by the Shipper or prospective shipper to take up any expansion service that is awarded to such Shipper or prospective shipper by Alliance in accordance with this open season, for a Contracted Capacity not exceeding the Contracted Capacity specified in the Request for Expansion Firm Service and not less than the minimum Contracted Capacity, if any, specified in the Request for Expansion Firm Service. Any Shipper or prospective shipper that submits a Request for Expansion Firm Service and is awarded Expansion Firm Service will be obligated to execute and deliver a Precedent Agreement for Firm Transportation Service (Expansion Capacity) in the form attached to this open season document (Attachment 2) and provide financial security as outlined in paragraph 5 below. (i) Alliance reserves the right to terminate, or extend the duration of, this open season, in its sole discretion, at any time prior to the Closing Time. 5

6 4. Allocation and Award of Expansion Firm Service (a) Subject to the qualifications below, Alliance will allocate the Expansion Firm Service first to the Request having the highest total economic value, and then to other Requests in descending order of total economic value until all the available capacity has been allocated or until all valid Requests have been accepted by Alliance. The total economic value of each Request will be the sum of the total economic value of the requester s Request for Expansion Firm Service and the total economic value of any such requester s corresponding Request for Term Extension of Existing Firm Service. The total economic value of each Request for Expansion Firm Service will be calculated as the specified firm toll (in the case of the EFRS-EFDS combination, the sum of both tolls), multiplied by the requested contract term and Contracted Capacity, and discounted to determine the net present value. The total economic value of each Request for Term Extension of Existing Firm Service will be calculated as the specified firm toll of the Existing Firm Service (and if applicable, as adjusted by term differentiation), multiplied by ten years and the Contracted Capacity being extended, and discounted to determine the net present value. (b) In the case of Expansion Firm Service capacity that is otherwise allocable to a Shipper or prospective shipper that has requested a new receipt point, and such receipt point has been determined by Alliance to be not operationally feasible, or not economically viable, Alliance may allow such Shipper or prospective shipper to select another receipt point that is feasible and viable for Expansion Firm Service, and Alliance will award the allocated Expansion Firm Service capacity to such Shipper or prospective shipper at the agreed receipt point. (c) In the case of Expansion Firm Service capacity that is otherwise allocable to a Shipper or prospective shipper that has designated an existing receipt point in its request, and the receipt capacity at the receipt point has been determined by Alliance to be not sufficient to accommodate the full amount of the requested Contracted Capacity, Alliance may allow such Shipper or prospective shipper to select an alternative or additional receipt point that is feasible and viable for Expansion Firm Service, and Alliance will award the allocated Expansion Firm Service capacity to such Shipper or prospective shipper at the agreed receipt point. (d) In the case of Expansion Firm Service capacity that is otherwise allocable to a Shipper or prospective shipper whose gas does not meet Alliance s hydrocarbon dewpoint gas quality specification, and Alliance determines that FRGS is available for such gas at the requested receipt point, Alliance will award the allocated Expansion Firm Service capacity to such Shipper or prospective shipper at the agreed receipt point. (e) If the total economic value for two or more Requests are equivalent and there is insufficient Expansion Firm Service to meet the aggregate Contracted Capacity requested, Alliance will allocate service as follows: i. Alliance will award the available Expansion Firm Service to the affected Shippers and prospective shippers pro rata on the basis of the Contracted Capacity specified in their Requests for Expansion Firm Service; 6

7 ii. should the volume of Expansion Firm Service allocable to a Shipper or prospective shipper be less than the minimum Contracted Capacity, if any, specified in its Request for Expansion Firm Service, no Expansion Firm Service will be awarded by Alliance to that Shipper or prospective shipper; iii. should the volume of Expansion Firm Service allocable to a Shipper or prospective shipper be greater than the minimum Contracted Capacity, if any, specified in its Request for Expansion Firm Service, the Shipper or prospective shipper will be deemed conclusively to have accepted the Expansion Firm Service awarded by Alliance to that Shipper or prospective shipper; and iv. any remaining Expansion Firm Service which has not been awarded in accordance with the foregoing will be allocated to other Requests for Expansion Firm Service in descending order of total economic value. (f) Alliance will, as soon as reasonably practicable, notify each successful Shipper or prospective shipper of the Expansion Firm Service awarded to it and forward to such Shipper or prospective shipper a Precedent Agreement for Firm Transportation Service (Expansion Capacity) in the form attached to this open season document (Attachment 2) for such Expansion Firm Service. Such Shipper or prospective shipper is obligated to execute and deliver to Alliance the Precedent Agreement for Firm Transportation Service (Expansion Capacity), without modification or amendment, within 10 business days of receipt of the Precedent Agreement for Firm Transportation Service (Expansion Capacity) from Alliance. 5. Credit Requirements (a) Shippers and prospective shippers will be required, as a condition to the award of any Expansion Firm Service, to: i. demonstrate to Alliance a credit quality acceptable to Alliance, in its sole discretion, through the provision of financial statements and such other information as Alliance may require; ii. if the Shipper or prospective shipper is unable to meet the criteria in subparagraph i. above, provide to Alliance a guarantee of payment in form and substance satisfactory to Alliance by another entity which meets the criteria in subparagraph i. above; or iii. if the Shipper or prospective shipper is unable to comply with subparagraphs i. or ii. above, provide to Alliance, and at all times maintain: a. an irrevocable letter of credit in an amount determined based on the term of the Expansion Firm Service as follows: for a 15 year or greater service term, an amount equal to 12 months of demand charges and other charges and surcharges plus an additional one month for each year by which the contract term exceeds a 15-year term; or b. such other alternative financial security acceptable to Alliance, 7

8 provided that Alliance reserves the right to limit the expansion service available to such parties which provide letters of credit or other alternative financial security, all in accordance with the following schedule: 1. within 7 days of receipt from Alliance of the Precedent Agreement, 25% of the LC amount identified in 5(a)iii.a. or 25% of such other alternative financial security identified in 5(a)iii.b. 2. within 7 days of timely executing the Precedent Agreement, an additional 25% of the LC amount identified in 5(a)iii.a. or an additional 25% of such other alternative financial security identified in 5(a)iii.b. 3. immediately following a positive final investment decision by Alliance Canada, an additional 25% of the LC amount identified in 5(a)iii.a. or an additional 25% of such other alternative financial security identified in 5(a)iii.b. 4. within 7 days of receipt from Alliance Notice that Alliance Canada has accepted its NEB regulatory approval and Alliance US has accepted its FERC regulatory approval and both Alliance Canada and Alliance US are proceeding to final construction, the final 25% of the LC amount identified in 5(a)iii.a. or the final 25% of such other alternative financial security identified in 5(a)iii.b. (b) Alliance reserves the right to reject, in its sole discretion, any and all Requests for Expansion Firm Service which fail or are unable to meet the requirements prescribed above. 6. Supply and Demand Markets Shippers and prospective shippers submitting a Request for Expansion Firm Service are responsible for securing any necessary upstream arrangements for supply, if applicable, and for securing any necessary downstream capacity or marketing arrangements on other pipelines connecting to the Alliance Pipeline system. Turn Back of Existing Firm Service Capacity 1. Alliance will, in conjunction with this open season, consider Requests to Turn Back Service from Shippers holding existing Firm Service that wish to permanently Turn Back such service or portion thereof effective on (i) November 1, 2021 or (ii) the actual date Alliance requires such Turned Back service in order to commence providing Expansion Firm Service pursuant to this open season. In the event that Alliance, in its sole discretion, accepts a Request to Turn Back Service, the resulting Turned Back service will be allocated by Alliance to Shippers and prospective shippers which are awarded Expansion Firm Service in this open season. 2. Alliance may elect to accept Request(s) to Turn Back Service in such a manner as to result in Turn Back being staged (i.e., with multiple Turn Back dates). 8

9 3. Alliance reserves the right to reject, in its sole discretion, any and all Requests to Turn Back Service submitted in response to this open season. Further, Alliance may accept for Turn Back a volume of service which is less than the volume requested to be turned back in a Request to Turn Back Service and Shipper shall, in that case, be deemed conclusively to have agreed to such lesser volume of service Turn Back. 4. The Turn Back of existing Firm Service may, depending on the volume of existing Firm Service that existing Shippers wish to Request to Turn Back and the requests for Expansion Firm Service received by Alliance in this open season, affect the need for, or the nature, size, configuration, or timing of, any proposed expansion facilities. 5. Any Shipper wishing to turn back existing Firm Service must do so on an unconditional basis. No conditions to the Request to Turn Back will be considered or accepted. 6. Shippers wishing to turn back existing Firm Service must complete a Request to Turn Back Service, in the form attached to this open season document (Attachment 3), and submit it to Alliance via at the address noted above by the Closing Time. Requests to Turn Back Service which are not received by the Closing Time will not be considered. Any Shipper that submits a Request to Turn Back Service which is accepted by Alliance is obligated to execute and deliver to Alliance an amending agreement to the Shipper s existing Firm Service Agreement evidencing such Turn Back in the form provided by Alliance, without amendment or modification, within 5 business days of receipt of such amending agreement from Alliance. Any Shipper that fails to execute and deliver its amending agreement within 5 business days of receipt of same shall be deemed to have forfeited Alliance s acceptance of Shipper s Turned Back capacity. 7. Alliance will, via and as soon as reasonably practicable following receipt of a Request to Turn Back Service, either confirm to Shipper Alliance s receipt of the Request to Turn Back Service and assign an identification number to it, or advise the Shipper that the Request to Turn Back Service fails to conform with the requirements of this open season document and consequently will not be considered. 8. A Shipper that has submitted a Request to Turn Back Service may withdraw that Request to Turn Back Service at any time prior to the Closing Time. Term Extension of Existing Firm Service 1. The minimum term extension ( term up ) period for existing Firm Service will be based on a new expiry date for such Firm Service that will be extended to the date which is 10 years from the service start date for the Expansion Firm Service, regardless of the current expiry date of such existing Firm Service. For example, if the service start date for Expansion Firm Service is November 1, 2021, the expiry date for the termed-up existing Firm Service would be extended to a minimum of October 31, Term up will only be permitted on existing Firm Service that is eligible for renewal. Existing Firm Service that does not have renewal rights (i.e. firm service less than 3 years ) will not be eligible for term up. Existing Firm Service that is termed up will have no renewal rights upon expiry of the extended term, 9

10 provided however that Shipper may request additional term by notifying Alliance one year prior to expiry of the extended term of its desire to renew, and Alliance may, at its discretion, accept the request to renew or agree to negotiate with the Shipper to extend the term of the Shipper s Firm Service Agreement. Existing Firm Delivery Service that is termed up will not be entitled to receive Rich Gas Credits or Debits. 3. Term up will be prioritized by existing Firm Service expiry date, with term up being first applied to the earliest expiry date and progressing to the latest expiry date. For example, if a Shipper requests term up of two tranches of existing Firm Service, one that expires on May 31, 2019 and one that expires on September 30, 2019, the term extension would be first applied to the May 31, 2019 Firm Service with the remainder, if any, applied to the September 30, 2019 Firm Service. 4. Term up will change the term differentiated toll applied to existing 3-Year Firm Service and to existing Firm Service Agreements with staged capacity to the 5 Year Firm Service tolls. In addition, any Shipper that is awarded at least 1, m 3 (50 MMcf/d) of Expansion Firm Service and that terms up 1, m 3 (50 MMcf/d) or more for more than 10 years from the service start date for the Expansion Firm Service will receive a discount as follows: Discount for each additional year of term up exceeding 10 years for Years 11 to 15 Discount for each additional year of term up exceeding 10 years for Years 16 to 20 Services C$/E3m3/d C$/E3m3/month C$/E3m3/d C$/E3m3/month FRS Z2 $ $ $ $ FRS Z1 $ $ $ $ FDS $ $ $ $ FFPS Z1 $ $ $ $ FFPS Z2 $ $ $ $ A Shipper will begin to be charged any toll that is reduced by virtue of the terms of this paragraph on November 1, The tolls applicable to termed-up existing Firm Service are Alliance s term-differentiated tolls approved by the NEB, as adjusted, if applicable, by the discounts identified in paragraph 4. above. 6. Shipper shall within 30 days of tender by Alliance execute and deliver, in the form provided by Alliance, an amending agreement to the Shipper s existing Firm Service Agreement. 10

11 7. Alliance reserves the right to decline any amount of existing Firm Service for term up, in its sole discretion, at any time prior to or after the Closing Time and irrespective of the results of this open season for Expansion Firm Service. Additional Information Should you have any questions or require additional information regarding this open season, please contact your Business Development Manager or Jason Feit, Manager, Asset Optimization and Development at or (403) All credit inquiries can be made to Sharon Chen-Xue at Alliance Pipeline at (403) or Summary of Key Dates and Deadlines March 28, 2018 March 28 to Noon (MDT) May 29, 2018 Noon (MDT) May 30, 2018 Open season commences. Shippers will have an opportunity to consult with Alliance representatives. Open season closes and Requests for Expansion Firm Service and Requests to Turn Back Service and Requests for Term Extension of Existing Firm Service must have been submitted prior to 12:00 noon (Mountain Daylight Time). 11

12 ATTACHMENT 1 REQUEST FOR EXPANSION FIRM SERVICE To: Alliance Pipeline Ltd. BD@alliancepipeline.com 1. Requester Information Name (full legal entity): Address: Contact person: Telephone: 2. Expansion Firm Service Request Service EFRS Zone 1*^ EFRS Zone 1*^ EFRS Zone 1*^ EFRS Zone 1*^ EFRS Zone 2*^ EFRS Zone 2*^ EFRS Zone 2*^ Term (in years) (commencing later of November 1, 2021 or inservice date minimum term of 15 years) Toll ($/10 3 m 3 / month) $ $ $ $ $ $ $ Contracted Capacity (10 3 m 3 /d) (net of fuel requirements) Minimum Contracted Capacity (10 3 m 3 /d) Receipt Point Receipt Gas meets Alliance tariff gas quality specifications Y/N Delivery Point Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool 12

13 EFRS Zone 2*^ EFDS*^ EFDS*^ EFDS*^ EFDS*^ EFFPS Zone 1* EFFPS Zone 1* EFFPS Zone 1* EFFPS Zone 1* EFFPS Zone 2* EFFPS Zone 2* EFFPS Zone 2* EFFPS Zone 2* $ $ $ $ $ $ $ $ $ $1, $1, $1, $1, Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool Alliance Trading Pool Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border Canada- USA border * All requests for EFRS-EFDS are deemed to be conditional on the award to the same party or its affiliate, or to a counterparty with whom such party has made delivery arrangements, of corresponding transportation service on the U.S. Pipeline. All requests for EFFPS are deemed to be conditional upon the award to the same party or its affiliate of corresponding transportation service on the U.S. pipeline segment of the Alliance Pipeline system. ^ The Contracted Capacity requested for EFRS must match the Contracted Capacity requested for EFDS (net of fuel). Alliance will adjust volumes accordingly to account for fuel. 13

14 3. Acknowledgement and Representation The undersigned acknowledges and agrees on behalf of the Requester that the submission of this Request for Expansion Firm Service is a binding offer to contract for any Expansion Firm Service that is awarded by Alliance to the Requester, and confirms on behalf of the Requester that the Requester will execute and deliver to Alliance a Precedent Agreement for Firm Transportation Service (Expansion Capacity) in the form attached to Alliance Canada s Binding Open Season March 28 May 30, 2018 document without amendment or modification. The undersigned represents and confirms that he/she has the capacity and authority to submit this Request for Expansion Firm Service and to bind the Requester thereby. Dated this day of, 2018 Name of Requester Per: Signature Name Title 4. The terms and conditions specified in Alliance Canada s Binding Open Season March 28 May 30, 2018 document are incorporated by reference herein and govern this Request for Expansion Firm Service. 14

15 ATTACHMENT 2 PRECEDENT AGREEMENT FOR FIRM TRANSPORTATION SERVICE (EXPANSION CAPACITY) THIS PRECEDENT AGREEMENT FOR FIRM TRANSPORTATION SERVICE (EXPANSION CAPACITY) ( Precedent Agreement ) is made effective as of the day of, 2018, by and between: ALLIANCE PIPELINE LIMITED PARTNERSHIP, an Alberta limited partnership - and ( Transporter ) [NAME], a [jurisdiction] [type of legal entity] ( Shipper ) RECITALS: WHEREAS Transporter owns and operates an interprovincial pipeline that transports natural gas and extends from northeast British Columbia to the Canada-United States border near Elmore, Saskatchewan and that falls within the jurisdiction of the National Energy Board, or any replacement or successor regulatory or government authority having authority over the approval, licensing, construction, operation or tolls of inter-provincial pipelines in natural gas transportation service (the NEB ); WHEREAS Transporter proposes to offer natural gas firm transportation services that would be made available primarily through incremental compression along the Transporter s pipeline system to provide approximately 11, m 3 (400 MMcf) per day of new firm transportation capacity (the Expansion Firm Services ); WHEREAS Shipper, by the commitments it gives in this Precedent Agreement, indicates its agreement to contract for one or more of the Expansion Firm Services awarded to Shipper through Transporter s open season for the Expansion Firm Services ( Open Season ); 15

16 WHEREAS The commitments provided by Shipper via this Precedent Agreement and by other shippers in precedent agreements with Transporter will be used as support for Transporter s regulatory applications and for the construction and operation of the facilities for the Expansion Firm Services; WHEREAS Transporter is willing to continue its efforts to develop the facilities for the Expansion Firm Services and to proceed with obtaining all necessary regulatory approvals and authorizations of the Expansion Firm Services; provided that Transporter, in its sole discretion, has received sufficient commitments from prospective shippers and has attained sufficient commercial support; and WHEREAS This Precedent Agreement has been executed as evidence of the agreement between Transporter and Shipper that, upon satisfaction or waiver of the conditions precedent set forth herein, the parties will enter into a Transportation Service Agreement ( TSA ) providing for the Expansion Firm Services to be provided by Transporter to Shipper. NOW THEREFORE, in consideration of the mutual covenants and agreements herein, the receipt and sufficiency as valuable consideration of which is acknowledged and agreed to by each of Transporter and Shipper, Transporter and Shipper agree as follows: 1. Effective Date and Term of Precedent Agreement This Precedent Agreement is effective as of the date first stated above and shall remain in effect until the earlier of (a) the execution of a TSA for each of the Expansion Firm Services awarded to Shipper through the Open Season and set out in this Precedent Agreement; or (b) the date specified in accordance with either Shipper s or Transporter s exercise of its termination rights pursuant to this Precedent Agreement. Where Shipper and Transporter execute a TSA, the TSA shall terminate on October 31 of the year in which the TSA is stated to terminate. 2. Estimated In-Service Date of Expansion Firm Services Transporter anticipates that the Expansion Firm Services will be ready for service on or about November 1, 2021 or such later date as reasonably practicable following satisfaction or waiver of all conditions precedent (the Planned Service Commencement Date ). Subject to Shipper s express termination rights in this Precedent Agreement, Shipper agrees that it shall have no claim or cause of action against Transporter for any delays in the Planned Service Commencement Date. 3. Expansion Firm Services The Expansion Firm Services include the following natural gas firm transportation services: a. Expansion Firm Receipt Service, Zone 1 ( EFRS Zone 1 ), which consists of firm transportation service from Alliance s receipt points downstream of Transporter s Blueberry compressor station discharge to the Alliance Trading Pool. The minimum term for an EFRS Zone 1 TSA is 15 years. Notwithstanding its obligation to pay demand charges as a subscriber to this service, in order for Shipper to utilize its EFRS Zone 1 transportation it must comply with the balancing requirements of the Alliance Trading Pool set forth in Transporter s transportation tariff, as may be amended or approved by the NEB from time to time ( Tariff ). 16

17 b. Expansion Firm Receipt Service, Zone 2 ( EFRS Zone 2 ), which consists of firm transportation service from Transporter s receipt points upstream of Transporter s Blueberry compressor station discharge to the Alliance Trading Pool. The minimum term for an EFRS Zone 2 TSA is 15 years. Notwithstanding its obligation to pay demand charges as a subscriber to this service, in order for Shipper to utilize its EFRS Zone 2 transportation it must comply with the balancing requirements of the Alliance Trading Pool set forth in Transporter s Tariff; c. Expansion Firm Delivery Service ( EFDS ), which consists of firm transportation service from the Alliance Trading Pool to Transporter s delivery point at the Canada-USA border. The minimum term for an EFDS TSA is 15 years. Notwithstanding its obligation to pay demand charges as a subscriber to this service, in order for a shipper to utilize its EFDS transportation it must arrange for its supply (including fuel requirement) from, and comply with the balancing requirements of, the Alliance Trading Pool set forth in Transporter s Tariff, and either individually or in combination: i) hold a Transportation Agreement(s) (TA) for transportation service from Transporter s delivery point at the Canada-USA border to a delivery point on Alliance Pipeline L.P. s pipeline ( EFT-1 Service ); or ii) have a confirmed receipt nomination from another shipper(s) with EFT-1 or FT-1 Service; for volume matching the Shipper s EFDS volume (less the associated EFT-1 or FT-1 fuel requirement); d. Expansion Firm Full Path Service, Zone 1 ( EFFPS Zone 1 ) which consists of firm transportation service from Alliance s receipt points downstream of Transporter s Blueberry compressor station discharge to Transporter s delivery point at the Canada-USA border. The minimum term for an EFFPS Zone 1 TSA is 15 years. Notwithstanding its obligation to pay demand charges as a subscriber to this service, in order for a shipper to utilize its EFFPS Zone 1 transportation it must hold a TA(s) for transportation service from Transporter s delivery point at the Canada-USA border to a delivery point on Alliance Pipeline L.P. s pipeline ( EFT-1 Service ) for volume matching the Shipper s EFFPS Zone 1 volume (less the associated EFT-1 fuel requirement); e. Expansion Firm Full Path Service, Zone 2 ( EFFPS Zone 2 ) which consists of firm transportation service from Alliance s receipt points upstream of Transporter s Blueberry compressor station discharge to Transporter s delivery point at the Canada-USA border. The minimum term for an EFFPS Zone 1 TSA is 15 years. Notwithstanding its obligation to pay demand charges as a subscriber to this service, in order for a shipper to utilize its EFFPS Zone 2 transportation it must hold a TA(s) for transportation service from Transporter s delivery point at the Canada-USA border to a delivery point on Alliance Pipeline L.P. s pipeline ( EFT-1 Service ) for volume matching the Shipper s EFFPS Zone 2 volume (less the associated EFT-1 fuel requirement); By executing and delivering to Transporter this Precedent Agreement, Shipper submits a binding offer to Transporter to enter into a TSA for the Expansion Firm Services selected in Appendix A to this Precedent Agreement. Shipper s offer cannot be amended or withdrawn other than pursuant to Shipper s termination rights specified in Article 9, or pursuant to the amending provisions in Article 14 hereto. 17

18 By executing and delivering to Shipper this Precedent Agreement, Transporter accepts Shipper s binding offer to enter into a TSA for the Expansion Firm Services selected in Appendix A to this Precedent Agreement. Transporter s acceptance cannot be amended or revoked other than pursuant to Transporter s termination rights specified in Article 9, or pursuant to the amending provisions in Article 14 hereto. Notwithstanding any other provision of this Precedent Agreement, the design and capacity of the facilities for the Expansion Firm Services and the form, substance and timing of Transporter s applications for orders, certificates, approvals, authorizations, licenses and permits shall be determined by Transporter, in its sole discretion. 4. Conditions Precedent The obligations of Transporter to provide Expansion Firm Services to Shipper are subject to the following conditions precedent which are for the sole benefit of Transporter and may be waived by Transporter in whole or in part: a. The determination by Transporter, at its sole discretion, that a minimum threshold volume of firm service and turn back commitments has been received by shippers on each of Transporter s and Transporter s affiliate, Alliance Pipeline L.P. s pipeline, individually and collectively, to economically construct and operate expansion facilities and provide the Expansion Firm Services; b. The determination by the board of directors and senior management of Transporter s general partner to commit to the construction and operation of expansion facilities and the provision of Expansion Firm Services; c. All engineering and design criteria required to construct and operate the expansion facilities and provide the Expansion Firm Services are acceptable to Transporter, in its sole discretion; d. Transporter and Alliance Pipeline L.P., obtaining all governmental and regulatory orders, certificates, approvals, authorizations, licenses and permits and other applicable authorizations, in form and substance satisfactory to Transporter or Alliance Pipeline L.P., as applicable, in their sole discretion, required to construct, operate and maintain expansion facilities in Canada and the USA, provide the Expansion Firm Services in Canada and the USA, and to levy the associated tolls and rates; e. Acceptance by Transporter and Alliance Pipeline L.P., in their sole discretion, and the satisfaction of all conditions or modifications contained in the orders, certificates, approvals, authorizations, licenses and permits referred to above; f. Procurement of all necessary rights-of-way, easements, other surface and subsurface rights and permits in form and substance acceptable to Transporter and Alliance Pipeline L.P., in their sole discretion; g. Receipt of financial commitment(s) from financial institutions or investors, on terms acceptable to Transporter, to make the capital expenditures necessary to enable Transporter to construct and operate expansion facilities and to provide the Expansion Firm Services under the Transportation Service Agreement(s) in the manner contemplated in this Precedent Agreement; 18

19 h. the determination by Transporter, in its sole discretion, that none of the pipeline system, the expansion facilities, Transporter or Alliance Pipeline L.P. have been or could be materially adversely affected by any prevailing or future economic, regulatory, financial or other circumstances (including, without limitation, Transporter s tolls and toll design); and i. Transporter, in its sole discretion, shall be satisfied that all conditions precedent to Alliance Pipeline L.P. s obligations under the precedent agreements respecting Expansion Firm Service on the U.S. portion of the Alliance Pipeline system, as contained in such precedent agreements, will have been satisfied or waived. 5. Transporter s Obligations Transporter shall, subject to the terms of this Precedent Agreement: a. Construct facilities necessary for the Expansion Firm Services; b. Following satisfaction or waiver of all conditions precedent, notify Shipper of such fact, and of the actual in-service date of the Expansion Firm Services; and c. At least 90 days prior to the Planned Service Commencement Date, tender Shipper a TSA for each of the Expansion Firm Services selected by Shipper in this Precedent Agreement, which specifies the Shipper s Contracted Capacity, a primary term of a minimum of 15 years ending on October 31 st in the final year of the term, the applicable tolls agreed to in this Precedent Agreement and approved by the applicable regulatory authorities, and which incorporates creditworthiness requirements consistent with those in this Precedent Agreement and any other applicable terms and conditions in this Precedent Agreement and such other terms and conditions as are codified in Transporter s Tariff for the Expansion Firm Services. 6. Shipper s Obligations Shipper shall, subject to the terms of this Precedent Agreement: a. Within 30 days of tender by Transporter, execute and deliver to Transporter a TSA, and to the extent applicable, a FRGS Agreement, for each of the Expansion Firm Services selected by Shipper in this Precedent Agreement; b. Commencing on the actual in-service date of the Expansion Firm Services, pay Transporter the applicable tolls set forth in Appendix A (subject to NEB approval) for the Expansion Firm Services during the applicable term of the TSA for each of the Expansion Firm Services and such other charges and surcharges as may from time to time apply to the Expansion Firm Services, and provide fuel in-kind subject to the system receipt and delivery fuel requirements, all in accordance with Transporter s Tariff. c. Support and cooperate with, and not oppose, obstruct or otherwise interfere with, the efforts of Transporter to make all necessary notifications, tariff filings, applications or certificate filings and to obtain all governmental and regulatory authorizations and/or exemptions necessary for Transporter to construct, own and operate and maintain the facilities required for and to 19

20 provide the Expansion Firm Services at the tolls set out in this Precedent Agreement and to perform its obligations contemplated in this Precedent Agreement, and, upon request by Transporter, will express its support in the manner specified by Transporter, which may include, without limitation, support in the form of a written submission, or support in the form of an inperson submission or appearance at a hearing, for any such notifications, tariff filings, applications or certificate filings, authorizations and/or exemptions; d. Possess, provide, and maintain such credit as is required by Transporter to satisfy Shipper s financial and contractual obligations under this Precedent Agreement and under every TSA executed pursuant to this Precedent Agreement; and e. Execute and deliver such documents and do such acts as may be reasonably requested by Transporter to effectuate the terms of this Precedent Agreement, and agree to provide any information that is reasonably requested by Transporter in preparing, submitting, and conducting applications to any regulatory or governmental body in connection with the approval and authorization of the tolls and terms and conditions of the Expansion Firm Services. 7. Creditworthiness Requirements for Precedent Agreement (a) Shippers and prospective shippers will be required, as a term and condition of this Precedent Agreement, to: i. demonstrate to Transporter a credit quality acceptable to Transporter, in its sole discretion, through the provision of financial statements and such other information as Transporter may require; ii. if the Shipper or prospective shipper is unable to meet the criteria in subparagraph i. above, provide to Transporter a guarantee of payment in form and substance satisfactory to Transporter by another entity which meets the criteria in subparagraph i. above; or iii. if the Shipper or prospective shipper is unable to comply with subparagraphs i. or ii. above, provide to Transporter, and at all times maintain: a. an irrevocable letter of credit in an amount determined based on the term of the Expansion Firm Service as follows: for a 15 year or greater service term, an amount equal to 12 months of demand charges and other charges and surcharges plus an additional one month for each year by which the contract term exceeds a 15-year term; or b. such other alternative financial security acceptable to Transporter, provided that Transporter reserves the right to limit the expansion service available to such parties which provide letters of credit or other alternative financial security, all in accordance with the following schedule: 20