Exhibit (10j.(3))
SERVICE AGREEMENT
THIS AGREEMENT is made and entered into this 17th day of
June, 1993, by and between NORTHWEST PIPELINE CORPORATION,
hereinafter referred to as "Transporter", and NORTHWEST NATURAL
GAS COMPANY, hereinafter referred to as "Shipper".
RECITALS:
A. Whereas, Shipper is a local distributor of natural gas.
B. Whereas, Shipper owns certain supplies of natural gas
which it desires Transporter to transport for Shipper's account
pursuant to Part 284 of the regulations of the Federal Energy
Regulatory Commission ("FERC").
C. Whereas, Shipper requested an expansion of
Transporter's pipeline system for firm transportation service.
D. Whereas, Shipper and Transporter agreed to such
expansion under that certain Letter Agreement dated April 7,
1993 for the transportation service described herein.
E. Whereas, Transporter has committed to file and support
an application with the FERC requesting certificate authority to
construct and operate the facilities necessary to provide the
transportation service under this Agreement (the "Facilities") as
soon as practicable after execution of this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties agree as follows:
ARTICLE I - GAS DELIVERIES AND REDELIVERIES
1.1 Subject to the terms, conditions and limitations
hereof, Transporter agrees to receive from Shipper at the Receipt
Point(s) specified in Exhibit A herein, transport and deliver to
Shipper at the Delivery Point(s) specified in Exhibit B herein,
the following quantities of natural gas, known as Transportation
Contract Demand:
Up to 102,000 MMBtu's/day, provided that Transporter's
receipt of gas at any receipt point for Shipper's account
hereunder on any day shall not exceed the maximum daily quantity
set forth for such receipt point on Exhibit "A" hereto, and
provided that Transporter's daily obligation to deliver gas to
Shipper at any delivery point under this Agreement shall not
exceed the Maximum Daily Delivery Obligation ("MDDO") set forth
for such delivery point in Exhibit "B" of this Agreement.
1.2 Pursuant to the General Terms and Conditions of
Transporter's FERC Gas Tariff applicable to this Agreement per
Section 2.2 herein, Shipper shall furnish fuel and lost or
unaccounted for gas volumes in-kind. Transporter may receive
volumes of gas in excess of the maximum daily quantity set forth
in Section 1.1 when necessary to cover such fuel gas
reimbursement while making full delivery of such Maximum Daily
Quantity or to cover certain balancing receipts agreed to by the
parties.
1.3 Such transportation shall be on a firm basis as defined
in the TF-l Rate Schedule of Transporter's FERC Gas Tariff, First
Revised Volume No. l-A, or any superseding Rate Schedule.
ARTICLE II - TRANSPORTATION RATES AND CHARGES
2.1 (a) Shipper agrees to pay Transporter for all natural
gas transportation service rendered under the
terms of this Agreement in accordance with
Transporter's Rate Schedule TF-l, as filed with
the FERC, and as such rate schedule may be amended
or superseded from time to time or any other rate
schedule the FERC may deem applicable to the
subject transportation service.
(b) Payment of applicable reservation charges under
this Agreement will commence the date that
Transporter has in place the facilities necessary
to provide the transportation service but no
sooner than November 1 ,1995. Transporter shall
provide Shipper written notice fifteen (15) days
prior to commencement of said reservation charges.
(c) Shipper will have a continuing option to terminate
any portion of the Contract Demand attributable to
this Agreement, if the Facilities are consolidated
for rate treatment with: (i) Transporter's
Expansion II application to the FERC for a
certificate of public convenience and necessity
to construct expansion facilities; or (ii)
Transporter's Expansion I facilities and services
if treated on an incremental basis. If, as
determined by Transporter, any FERC order
indicates that rate treatment for the Facilities
to be installed pursuant to this Agreement will be
consolidated with Transporter's Expansion I or
Expansion II Project, Transporter will provide
notice to Shipper within 15 days following the
issuance of such order or rule of the right to
exercise a option to terminate any portion of the
Contract Demand attributable to this Agreement,
and shall specify the costs for which Shipper will
be responsible as discussed in this subsection.
Shipper may exercise this option no later than
fifteen (15) days from the date of Transporter's
notice to Shipper. This option to terminate will
be extinguished upon Transporter's commencement of
the construction of the Facilities needed to
accommodate the services described in this
Agreement.
In the event that Shipper elects to exercise the
termination rights provided for above, Shipper
will be responsible to Transporter for any
expansion design costs, environmental impact study
expenses, engineering costs, right of way expenses
or other similar costs spent prior to the notice
date to the extent that such studies or design
work cannot be utilized for the Expansion II
Project.
(d) In the event that Shipper does not elect to
exercise the termination rights outlined in (c)
above prior to Transporter commencing construction
of the Facilities, Shipper will have no subsequent
right to terminate this Agreement regardless of
the rate treatment ultimately approved by the FERC
except as provided for in Section 4.2 below.
2.2. This Agreement shall be subject to the provisions of
Transporter's TF-l Rate Schedule or any applicable superseding
Rate Schedule and the General Terms and Conditions applicable
thereto and effective from time to time, which by this reference
are incorporated herein and made a part hereof.
ARTICLE I II - GOVERNMENTAL REQUIREMENTS
3.1 Shipper shall reimburse Transporter for any and all
filing fees incurred by Transporter in seeking governmental
authorization for the initiation, extension or termination of
service under this Agreement.
3.2 The transportation service contemplated herein shall
be provided by Transporter pursuant to Section 284.223 of the
FERC's regulations.
3.3 Upon termination, this Agreement shall cease to have
any force or effect, save as to any unsatisfied obligations or
liabilities of either party arising hereunder prior to the date
of such termination, or arising thereafter as a result of such
termination; provided, however, that this provision shall not
supersede any abandonment authorization which may be required.
3.4 (This Section 3.4 shall be applicable only for the
transportation of imported natural gas.) Shipper hereby
acknowledges and agrees that either it or its buyer or seller is
the "importer of record" and it will comply with all requirements
for reporting and submitting payment of duties, fees, and taxes
to the United States or agencies thereof to be made on imported
natural gas and for making the declaration of entry pursuant to
19 CFR Section 141.19. Shipper agrees to indemnify and hold Transporter
harmless from any and all claims of damage or violation of any
applicable laws, ordinances and statutes which pertain to the
importation of the gas transported hereunder and which require
reporting and/or filing of fees in connection with said import.
ARTICLE IV - TERM
4.1 This Agreement becomes effective on the date hereof and
shall remain in full force and effect for a period of fifteen
(15) years commencing on the date Transporter places in service
the Facilities necessary to provide the transportation service,
and year to year thereafter at Shipper's sole option. Shipper
may terminate all or any portion of service under this Agreement
either at the expiration of the primary term, or upon any
anniversary thereafter, by giving written notice to Transporter
so stating at least twelve (12) months in advance. Shipper also
shall have the sole option to enter into a new Agreement
containing the same provisions as this Agreement, for all or any
portion of the service under this Agreement at or after the end
of the primary term of this Agreement. It is Transporter's and
Shipper's intent that this term provision provide Shipper with a
"contractual right to continue such service" and to provide
Transporter with concurrent pregranted abandonment of any volume
that Shipper terminates within the meaning of 18 CFR Section
284.221(d)(2)(i) as promulgated by Order No. 636 on May 8, 1992.
4.2 In the event Shipper desires to terminate this
Agreement at any time prior to or after the in-service date of
the Facilities and there is a party identified by Transporter who
is willing to contract for comparable capacity under terms and
conditions acceptable to Transporter, Transporter will allow
Shipper to terminate this Agreement upon execution of a service
agreement with the new party.
ARTICLE V - WARRANTY OF ELIGIBILITY FOR TRANSPORTATION
Shipper, pursuant to the Rate Schedule specified in
Section 2.1(a) herein warrants for itself, its successors and
assigns, that all gas delivered to Transporter for transportation
hereunder shall be eligible for transportation in interstate
commerce under applicable rules, regulations or orders of the
FERC. Shipper will indemnify Transporter and save it harmless
from all suits, actions, damages, costs, losses, expenses
(including reasonable attorney fees) and regulatory proceedings,
arising from breach of this warranty.
ARTIC LE VI - NOTICES
Unless herein provided to the contrary, any notice
called for in this Agreement shall be in writing and shall be
considered as having been given if delivered personally, or by
mail or telegraph with all postage and charges prepaid to either
Shipper or Transporter at the place designated below. Routine
communications shall be considered as duly delivered when mailed
by ordinary mail. Normal operating instructions can be made by
telephone. Unless changed, the addresses of the parties are as
follows:
NORTHWEST PIPELINE CORPORATION
P. O. BOX 58900
SALT LAKE CITY, UTAH 84158-0900
Statements: Attention: T&E Accounting
(MS-10496)
Payments: Attention: Cash Control (MS-10491)
Contractual Notices: Attention: Transportation
(MS-10336)
Other Notices: Attention: Nominations (MS-10322)
Notices & Statements: Northwest Natural Gas Company
220 N.W. Second Avenue
Portland, Oregon 97209
Attention: Gas Supply
ARTICLE VII - OTHER OPERATING PROVISIONS
Pursuant to Section 5.3 of the General Terms and
Conditions of Transporter's FERC Gas Tariff, First Revised Volume
No. l-A, or relevant superseding tariff provision, Shipper shall
make payments to Transporter hereunder by wire transfer of
immediately available funds by the due date set forth therein.
Such funds shall be wire transferred to the First Interstate Bank
of Utah located in Salt Lake City, Utah for Transporter's Account
No. 02-07358-3.
ARTICLE VIII - ADJUSTMENTS TO GENERAL TERMS AND CONDITIONS
Certain of the General Terms and Conditions are to be
adjusted for the purpose of this Agreement, as specified below:
None.
ARTICLE IX - CANCELLATION OF PRIOR AGREEMENT(S)
When this Agreement takes effect, it supersedes,
cancels and terminates the following agreements(s):
None.
ARTICLE X - SUCCESSORS AND ASSIGNS
10.1 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. No assignment or transfer by either party hereunder
shall be made without written approval of the other party. Such
approval shall not be unreasonably withheld. As between the
parties hereto, such assignment shall become effective on the
first day of the month following written notice that such
assignment has been effectuated.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above set forth.
NORTHWEST NATURAL GAS COMPANY NORTHWEST PIPELINE CORPORATION
(Shipper) (Transporter)
By: /s/ Dwayne L. Foley By: /s/ Matt J. Gillis
Name: Dwayne L. Foley Name: Matt J. Gillis
Title: Senior Vice President Title: Vice President
Marketing
Attest: Attest:
EXHIBIT "A"
to the
SERVICE AGREEMENT
DATED June 17, 1993
between
NORTHWEST PIPELINE CORPORATION
and
NORTHWEST NATURAL GAS COMPANY
RECEIPT POINTS
Receipt Point Maximum Daily Quantity
For Each Receipt Point
(MMBtus)
Stanfield 102,000
TOTAL MDQ MUST EQUAL TOTAL TRANSPORTATION CONTRACT DEMAND
EXHIBIT "B"
to the
SERVICE AGREEMENT
DATED June 17, 1993
between
NORTHWEST PIPELINE CORPORATION
and
NORTHWEST NATURAL GAS COMPANY
Maximum Daily Delivery
Obligation ("MDDO") Delivery
Delivery Point For Each Delivery Point Pressure
(MMBtus) (psig)
--------------- ----------------------- --------
Molalla 46,500 575
Albany 10,000 400
Portland SE 10,100 400
Portland NE 6,200 400
Johnson Creek 4,000 400
Oregon City 400 150
Monitor 200 150
Turner 4,000 400
Jefferson/Scio 600 400
Brownsville/Halsey 8,900 400
South Eugene 5,000 400
North Eugene 5,000 400
Creswell 300 150
Cottage Grove 800 400
TOTAL MDDO MUST EQUAL TOTAL TRANSPORTATION CONTRACT DEMAND