WBI Energy Wind Ridge Pipeline, LLC Wind Ridge Pipeline Project Sale of Long Term Firm Capacity Commencing October 10, 2014 Binding Open Season WBI Energy Wind Ridge Pipeline, LLC announces a Binding Open Season for the sale of long term, firm natural gas transportation capacity on Wind Ridge Pipeline. Project Overview WBI Energy Wind Ridge Pipeline, LLC (WBI Energy Wind Ridge) is soliciting additional commitments for firm natural gas transportation capacity on the Wind Ridge Pipeline. The Wind Ridge Pipeline will create new, firm natural gas transportation capacity from a new interconnect with Northern Border Pipeline Company in McIntosh County, North Dakota to a new fertilizer production facility being constructed near Spiritwood, North Dakota. Wind Ridge Pipeline will also connect with WBI Energy Transmission, Inc. s natural gas transmission system near Spiritwood, North Dakota. A map showing the proposed route for Wind Ridge Pipeline is attached. The initial design of Wind Ridge Pipeline includes approximately 96 miles of new, high pressure steel pipeline and various measurement and interconnection facilities. The pipeline project, as designed to meet the needs of the new fertilizer production facility, consists of a 16-inch diameter pipeline. Based on this initial design, Wind Ridge Pipeline will have a capacity of approximately 90,000 equivalent dekatherms per day (dkt/day). The Wind Ridge Pipeline project can be redesigned to create approximately 50,000 dkt/day of additional firm transportation capacity by increasing the diameter of the pipeline. WBI Energy Wind Ridge is soliciting interest in this additional 50,000 dkt/day of firm capacity through this Open Season. Although WBI Energy Wind Ridge does not currently have a FERC Gas Tariff, WBI Energy Wind Ridge anticipates such FERC Gas Tariff will be substantially similar to WBI Energy Transmission, Inc. s FERC Gas Tariff, Third Revised Volume No. 1. The targeted in-service date of Wind Ridge Pipeline is January 2017. Length of Open Season The Open Season will commence on October 10, 2014 and conclude at 4:00 PM Central Time on October 31, 2014. The Open Season is available to any party. All related Precedent Agreements must be executed no later than November 21, 2014, unless WBI Energy Wind Ridge agrees, in its sole discretion, to extend such deadline. Page 1
Capacity WBI Energy Wind Ridge is offering for sale approximately 50,000 dkt/day of additional new firm transportation capacity for delivery of natural gas to new delivery locations along the Wind Ridge Pipeline route, as well as a new interconnect with WBI Energy Transmission, Inc. s natural gas transmission system near Spiritwood, North Dakota. Constraints may limit WBI Energy Wind Ridge s ability to accept certain delivery locations requested. Pursuant to a separate Open Season, WBI Energy Transmission, Inc. is proposing construction of certain facilities to expand pipeline capacity for receipt of natural gas from a proposed interconnection with Wind Ridge Pipeline to delivery locations in its Sheyenne Sub-system in eastern North Dakota. Bids Shippers have the option of requesting to pay a project recourse rate or a mutually agreeable negotiated rate for the firm transportation capacity associated with this Open Season. The project recourse rate is estimated to be $0.59 per dekatherm on a 100% load factor basis based on the current project cost and volume estimates. Such project recourse rate will be revised based upon final costs and volumes. Both the project recourse rate and the negotiated rate options will be subject to all applicable surcharges and fuel, lost and unaccounted for gas and electric power charges as such may be in effect from time to time. During this Open Season, both the contract term and rates are negotiable. It is projected that a minimum term of ten (10) years from commencement of service may be necessary to support the capital expenditures required to increase the capacity on the Wind Ridge Pipeline. Awarding Capacity In order to respond to this Open Season, shippers must complete an Open Season Bid Sheet that includes the delivery location(s), quantity requested, length of term and desired rate. Capacity on Wind Ridge Pipeline will be awarded to potential shippers based upon the highest net present value per unit of demand to the lowest net present value per unit of demand. WBI Energy Wind Ridge reserves the right to aggregate transportation requests from potential shippers to generate the highest net present value per unit of demand to WBI Energy Wind Ridge. A shipper requesting a negotiated rate which exceeds the project recourse rate shall be treated as if the negotiated rate is equal to the project recourse rate for such service. Any Page 2
shipper requesting the project recourse rate has the same right to capacity as a shipper willing to pay a negotiated rate higher than such project recourse rate. Where a negotiated rate is less than the project recourse rate, the negotiated rate shall be evaluated based on such lower rate and shall be afforded a correspondingly lower priority than higher bids, including bids submitted at the project recourse rate. Within the subset of negotiated rate bids, where one negotiated rate is less than another negotiated rate, the lower negotiated rate shall be evaluated based on such lower rate and shall be afforded a correspondingly lower priority than the higher negotiated rate. In no event shall WBI Energy Wind Ridge be required to accept a bid which provides a rate below the project recourse rate. In the event a request specifies a term greater than twenty (20) years in length, the term portion of the net present value calculation will be limited to twenty (20) years. In the case of insufficient capacity to satisfy identical successful requests, WBI Energy Wind Ridge shall allocate available capacity pro rata based upon the total capacity requested by each successful potential shipper to the total capacity requested by all successful potential shippers. Once capacity is awarded, WBI Energy Wind Ridge will require successful shippers to execute a Precedent Agreement. Successful shippers will also be required to provide evidence of creditworthiness satisfactory to WBI Energy Wind Ridge. When executed by both parties, a Precedent Agreement will set forth the terms and conditions under which the shipper and WBI Energy Wind Ridge will execute a firm transportation service agreement. All transported volumes for the entire term of the firm transportation service agreements will be subject to all applicable surcharges and any applicable fuel, lost and unaccounted for gas and electric power charges as such may be in effect from time to time. The Precedent Agreements, when fully executed by both the shipper and WBI Energy Wind Ridge, will constitute a binding agreement. However, WBI Energy Wind Ridge will in no way be obligated to execute the Precedent Agreements. If WBI Energy Wind Ridge notifies a shipper in writing of its election not to execute a Precedent Agreement, then the shipper will be relieved of its obligation. In the event the capacity is not fully subscribed through this Open Season process, the capacity will be sold on a first-come, first-served basis. All transportation services proposed as part of this Open Season are expressly subject to WBI Energy Wind Ridge s receipt of all regulatory approvals required to effectuate the services hereunder in form and substance satisfactory to WBI Energy Wind Ridge. WBI Energy Wind Ridge reserves the right to reject any bid, revise the scope of the proposed project in any way, and, consistent with applicable regulations, to modify, extend or terminate this Open Season process at any time. Interested parties must complete the attached Open Season Bid Sheet and e-mail it to mark.anderson@wbienergy.com, fax it to WBI Energy Wind Ridge at (701) 530-1698 or Page 3
mail it (to ensure receipt by WBI Energy Wind Ridge prior to the end of the Open Season) to WBI Energy Wind Ridge Pipeline, LLC, Market Services Department, P.O. Box 5601, Bismarck, ND 58506-5601. We urge you to respond promptly to this Open Season. If you have any questions please contact: Rob Johnson Telephone: (701) 530-1622 E-mail: rob.johnson@wbienergy.com or Mark Anderson Telephone: (701) 530-1623 E-mail: mark.anderson@wbienergy.com Page 4
Wind Ridge Pipeline Project Open Season Bid Sheet Shipper Name: Contact Person: Mailing Address: Phone: Fax: E-Mail: Primary Receipt and Delivery Location(s): Receipt Location Delivery Location MDDQ (equivalent dkt/day) Northern Border Pipeline Northern Border Pipeline Total Maximum Daily Delivery Quantity (MDDQ) Requested: (equivalent dkt/day) Length of Term: (years following the in-service date of the facilities) Rates (choose one): Project Recourse Rate Negotiated Rate (as follows) MDDQ Reservation Charge (rate per equivalent dkt per month): Commodity Charge (rate per dkt): Note: Both the project recourse rate and the negotiated rate options will be subject to all applicable surcharges and fuel, lost and unaccounted for gas and electric power charges as such may be in effect from time to time. Signed By: Name: Title: Date: By submitting this Wind Ridge Pipeline Project Open Season Bid Sheet, shipper hereby agrees to enter into good faith negotiations with the objective of entering into a binding Precedent Agreement with WBI Energy Wind Ridge in accordance with the terms set forth herein. Page 5
Wind Ridge Pipeline Project Overview Map Page 6