LOCKRIDGE TO WAHA PROJECT NOTICE OF BINDING OPEN SEASON

Transcription

1 Announcement of Open Season Natural Gas Pipeline Company of America LLC ( NGPL ) has entered into a binding transaction with a third party ( Prearranged Shipper ) to develop a project to provide 500,000 Dth/d of firm transportation capacity to Waha via an extension of its Amarillo system. The Lockridge to Waha Project ( Project ) will provide for firm transportation service via NGPL s yet to be constructed new pipeline extension from the terminus of Segment 9 in Ward County, Texas ( Lockridge Extension Pipeline ) to a delivery point at a proposed new interconnect with the Enterprise Waha Header in Pecos County, Texas (the Project Path ). This project was previously posted by NGPL during an open season held October 3, 2017 October 26, As a result, NGPL has entered into a pre-arranged negotiated rate transaction with a third-party for the Project Capacity ( Prearranged Shipper ). The purpose of this Binding Open Season is to solicit binding commitments for firm capacity on the Project Path from shippers that (1) are willing to commit to such firm transportation service, under terms and conditions described below and in accordance with all applicable rules and regulations of the Federal Energy Regulatory Commission ( FERC ) and (2) agree to provide the requisite pressure to effectuate firm receipt of the gas at the primary receipt point and delivery of the gas at the primary delivery point. Description of the Project The Project will require the installation of certain facilities, including but not limited to the following: (1) a new mile, 30-inch pipeline lateral, extending from NGPL s Amarillo Line in Ward County, Texas that will comprise the Lockridge Extension Pipeline; and (2) new metering and regulation facilities at the terminus of the Lockridge Extension Pipeline at a proposed new interconnect with the Enterprise Waha Header (collectively, such facility modifications to enable deliveries of natural gas on a primary firm basis and referred to as the Project Facilities ).The Project Path is within and will become part of NGPL s Permian Zone. The targeted in-service date for the Project is late The target in-service date is an estimate and may change dependent on the required facilities, regulatory approvals and completion of Project construction. Enterprise Waha Hub 1

2 Bid Requirements Parties interested in obtaining firm transportation capacity, pursuant to this Binding Open Season, should submit a completed Binding Open Season Bid Form (attached as Exhibit A) during the Open Season. It is anticipated an acceptable bid in this Binding Open Season will require a Negotiated Reservation Rate above the currently effective maximum rate applicable to intrazone transportation for the Permian Zone of NGPL s system. In addition, with respect to any bids submitted with receipt points within the Permian Zone, a negotiated fuel gas charge of 0.47% shall apply. The bid shall be binding and will be incorporated into a precedent agreement entered into between the parties ( Precedent Agreement ) and an executed FTS Agreement, consistent with NGPL s Tariff. A Binding Open Season Bid Form must include the following information: Reservation Rate on a dollar per Dth of MDQ per month basis; Negotiated Rate or Maximum Recourse Reservation Rate (the applicable maximum tariff rate for the Permian Receipt Zone to the Permian Delivery Zone) Maximum Daily Quantity ( MDQ ) must be 1,000 Dth per day or greater Bidder s Minimum Acceptable MDQ Primary Receipt Point(s), including the specified MDQ for the requested point(s) along the Project Path Primary Delivery Point(s), including the specified MDQ for the requested point(s) along the Project Path Contract Start Date Contract Term (must be at least ten (10) years) Credit Application (attached as Exhibit B) Shipper s agreement to provide the requisite pressure to effectuate firm receipts of gas at the primary receipt point and deliveries at the primary delivery point. Depending on the primary receipt point elected, gas entering NGPL s system must be at least 1000 psig and could be as high as 1200 psig. Fuel Gas and Gas Lost and Unaccounted for Charges The Fuel Gas and Gas Lost and Unaccounted for retention factor or charge shall be a fixed negotiated rate of.47% for receipt points within the Permian Zone. Other Rates In addition to the reservation charges and fuel charges above, shippers shall also pay all other applicable charges, including a commodity rate based on usage, Annual Charge Adjustment (ACA), and any additional charges or surcharges that are in effect from time to time pursuant to NGPL s FERC Gas Tariff, or as separately negotiated between Bidder and NGPL. Open Season Procedures Any party wishing to submit a binding bid in this Open Season must submit the attached Exhibit A (Open Season Bid Form) whose terms shall be incorporated into the definitive Precedent Agreement and Rate Schedule FTS Service Agreement. NGPL reserves the right to reject and remove from consideration, non-conforming bids, bids that have a delayed in-service requirement, or bids with other contingencies. If the non-conforming provisions of the bid are otherwise acceptable to NGPL, NGPL may, in its sole discretion, deem a non-conforming bid as acceptable in this Open Season. NGPL will exercise its discretion in this regard in a not unduly discriminatory manner. NGPL has no obligation to negotiate with or enter into any transaction with any party that submits a bid to NGPL. 2

3 Awarding of Capacity/Right to Match LOCKRIDGE TO WAHA PROJECT NGPL will evaluate all valid submissions and make a determination with respect to the final sizing of the Project. NGPL will award firm capacity based on the highest net present value (NPV) of the stream of revenue produced by an acceptable bid received in this Binding Open Season. Awards of capacity will be final and will be binding, subject to the conditions of the Precedent Agreement. The Prearranged Shipper included in this Binding Open Season has the right to match any higher value bids that may be received by NGPL in this Binding Open Season. Turn-back of Capacity Not Applicable NGPL is only seeking bids in this Open Season for capacity on the Project Path. Given that the Project involves an extension of NGPL s existing system, no turn-back would obviate the need for the Lockridge Extension Project. Therefore, NGPL is not soliciting offers for the turn-back of capacity. Credit Requirements In accordance with NGPL s Tariff and prior to entering into precedent agreements, Shippers will be required to demonstrate creditworthiness or provide credit assurances in an amount equal to a pro rata share of $12 million (based on the MDQ bid) in a form, or as otherwise acceptable to NGPL and pursuant to the Project terms and conditions of the Shipper s precedent agreement. A credit application is attached to this Open Season and should be submitted along with binding bids during this Open Season. Timing of Open Season and Contact List The Binding Open Season will commence at 12:00 P.M. CST on Tuesday, July 24, 2018, and conclude at 4:00 P.M. CST on Tuesday, August 7, Interested parties should send their bids via to: Jason_sweeney@kindermorgan.com. Bids may also be sent by mail or FAX to NGPL s offices to the attention of Jason Sweeney. The mailing address is 1001, Louisiana Street, Suite 1000, Houston, Texas The facsimile number is (713) Parties may submit questions concerning this Open Season to: Jason Sweeney: Phone: (713) ; Jason_sweeney@kindermorgan.com 3

4 A. Shipper Name: EXHIBIT A BID FORM B. Contract Start Date: C. Contract Term: D. Maximum Daily Quantity (MDQ): (Dth/d) E. Willing to accept a Lesser Quantity (Yes/No): F. If yes to E. above, please indicate the minimum acceptable amount: (Dth/d) G. Reservation Rate (per Dth of MDQ per month): Please check one: Negotiated Rate - $ per Dth of MDQ per month Maximum Tariff Rate H. Fuel Gas Charge: Please check one: Negotiated Fuel (0.47%) Maximum Tariff Fuel I. Receipt/Delivery Point Information (Any receipt point or delivery point on the Project Path) Receipt Point Name Receipt Point Loc. Maximum Daily Quantity (Dth/d) Delivery Point Name Delivery Point Loc Maximum Daily Quantity (Dth/d) J. Receipt Point Pressure: (psig) By: Print Name: Title Phone: Address: 4

5 EXHIBIT B Credit Application CREDIT APPLICATION FOR NATURAL GAS PIPELINE COMPANY OF AMERICA LLC Section 1 --General Information Shipper / Operator Name (Circle one) Shipper / Operator Address (Include City, State, Zip) DUNS# - - FEIN - Contact Person Telephone No. ( ) Business Entity: S Corporation C Corporation Partnership Other FAX No. ( ) Type of Business Number of years in business List parent corporation of Shipper/Operator (if Shipper/Operator is a subsidiary company) or general partners (if Shipper/Operator is a partnership) Please identify (specify) whether you are owned by Brookfield Infrastructure Partners L.P. Section 2 -- Standardized Credit Information Please provide Shipper s long-term unsecured debt credit ratings (including Outlook) current as of the date of this Credit Application: Standard & Poor s Moody s Is Shipper: - Operating under federal bankruptcy laws? Yes No - Subject to liquidation or debt reduction procedures under state laws? Yes No - Subject to pending liquidation or regulatory proceedings in state or federal courts which could cause a substantial deterioration of Shipper s financial condition? Yes No - Subject to any collection lawsuits or outstanding judgments which would affect Shipper s ability to remain solvent? Yes No - Are there any overdue amounts owed Natural Gas Pipeline Company? Yes No Section 3 -- Additional Financial Information and Documentation Please provide Shipper s estimated activity under all requested services: Estimated Monthly Volume for all Services: (Dth) Estimated Monthly Transportation/Storage Charges for all services $ Estimated Term (in months) of Capacity Release Request Expected Commencement Date for requested service or capacity release: If Shipper s audited financial information is not publicly available, please enclose current financial statements, annual reports, 10-K or other reports to regulatory agencies, or any reports from credit reporting agencies which are available. Natural Gas Pipeline Company may request additional credit information and documentation in order to perform a credit evaluation of Shipper, in accordance with the provisions of its FERC Gas Tariff. Incomplete applications will be declined. Shipper s Signature Date Return this Credit Application and Supporting Financial Information to: Natural Gas Pipeline Company of America LLC. Attention: Ralph Lohr 3250 Lacey Road, Ste 700 Downers Grove, IL Telephone: 630/ Facsimile: 630/ Ralph_Lohr@kindermorgan.com 5