INTERRUPTIBLE GAS TRANSPORTATION AND SALES AGREEMENT
----------------------------------------------------
THIS INTERRUPTIBLE GAS TRANSPORTATION AND SALES AGREEMENT is made and
entered into o the 1st day of January, 1991, by and between ENERGAS
COMPANY, a division of Atmos Energy Corporation, a Texas corporation
("Energas"), and MESA OPERATING LIMITED PARTNERSHIP, a Delaware limited
partnership ("Mesa").
W I T N E S S E T H
-------------------
WHEREAS, Energas owns and operates a pipeline system located in the
State of Texas; and
WHEREAS, Energas and Mesa desire to enter into an Agreement providing
for the transportation of gas by Energas for Mesa to the Delivery Point(s),
as hereinafter defined, and the sale of supplemental gas by Energas to
Mesa, all in accordance with the General Terms And Conditions attached
hereto and incorporated herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
---------
TRANSPORTATION OF GAS FROM FAIN PLANT TO INDUSTRIAL USER
Mesa has gas produced pursuant to the "B" Contract and processed at
the Fain Plant operated and owned by Mesa in excess of Energas' demand for
supply pursuant to that Agreement dated June 27, 1949, as amended, between
Energas and Mesa (as successors to Amarillo Gas Company and Amarillo Oil
Company) available to Mesa for its industrial users in the City of Amarillo
and its environs (hereinafter "Excess Gas"). The terms and conditions
under which such Excess Gas will be transported by Energas for Mesa from
the tailgate of the Fain Plant to the ultimate delivery point for its
industrial users are herein defined and agreed upon. In this regard, Mesa
and Energas agree that Energas shall accept custody of such Excess Gas made
available at the Fain Plant tailgate and provide the necessary
transportation services from the tailgate of the Fain plant to the delivery
point designated by Mesa and located in the City of Amarillo and its
environs for a transportation fee as set forth herein.
ARTICLE II
----------
TRANSPORTATION OF GAS FROM FAIN PLANT TO WESTAR INTERCONNECT
------------------------------------------------------------
In addition to the transaction described under Article I above, Mesa
and Energas agree and acknowledge that the total volume of gas made
available at the tailgate of the Fain Plant at certain times is in excess
of Energas' demand for gas in the City of Amarillo and its environs, and
also in excess, temporarily or otherwise, of the gas supply requirements of
Mesa to satisfy contractual commitments to its industrial users in the City
of Amarillo and its environs. The Excess Gas made available at the Fain
Plant may, at Mesa's sole discretion, be taken by it for eventual placement
in storage, exchange, or for the sale to customers in the City of Amarillo
and its environs (but only those customers averaging not less than
1 MMCFD as provided in Article VIII hereof. As to any of the possible
transactions described in Articles I and II, the Excess Gas required by
Mesa to satisfy its industrial users will be transported by Energas
(whenever Energas has available transportation capacity) from the tailgate
of the Fain Plant to the designated interconnect on Westar Transmission
Company's (hereinafter referred to as "Westar") pipeline system from which
Westar will perform such additional services as may be mutually agreed upon
as between Mesa and other parties, including Westar. In this regard, Mesa
and Energas agree that Energas shall accept custody of such gas made
available at the Fain Plant tailgate and thereafter provide the necessary
transportation services from the tailgate of the Fain Plant to the Amarillo
Creek interconnect (commonly known as Amarillo Creek located in the SW/4 of
Section 20, G&M Survey, Block M-3, Potter County, Texas) or such other
interconnect(s) to be mutually agreed upon for a transportation fee as set
forth herein.
ARTICLE III
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TRANSPORTATION OF STORAGE OR EXCHANGE GAS REDELIVERED
----------------------------------------------------
TO MESA FROM WESTAR
-------------------
Mesa and Energas agree and acknowledge that from time to time Mesa may
desire that volumes of gas placed in Westar's storage facilities, pursuant
to the transaction described in Article II above, be redelivered to it by
Westar to the Kalka interconnect (commonly known as Kalka, located in the
SW/4 of Section 19, AS&M Survey, Potter County, Texas) or other
interconnect(s) to be mutually agreed upon on Energas' pipeline system.
Therefore, contemplating that such redelivered gas volumes would require
transportation services to be performed by Energas from such Energas/Westar
interconnect to mutually agreeable delivery point(s), Mesa and Energas
agree that Energas shall provide the necessary transportation service from
such Energas/Westar interconnect(s) to such delivery point(s) within the
City of Amarillo and its environs for a transportation fee as set forth
herein. Energas shall accept custody of such gas made available at such
Energas/Westar interconnect(s) and transport and redeliver such volumes of
gas to such delivery point(s). Furthermore, and in addition to the
transaction contemplated herein, Energas acknowledges that exchange gas
(gas required to be redelivered to Mesa on the basis of prior gas delivered
to such third party by Mesa) may be redelivered to Mesa by a third party
other than Westar, and that said third party would endeavor to redeliver
certain required volumes of gas through pipeline facilities owned by it or
by others to a point of interconnect with Energas' pipeline system. In
this event, and not unlike the transportation services to be performed by
Energas as to redelivered stored volumes of gas, Energas agrees to
transport said gas volumes made available from the point(s) of interconnect
on Energas' pipeline system, including the Kalka interconnect, to such
delivery point(s) within the City of Amarillo and its environs for a
transportation fee as set forth herein.
ARTICLE III
-----------
TRANSPORTATION OF STORAGE OR EXCHANGE GAS REDELIVERED
-----------------------------------------------------
TO MESA FROM WESTAR
-------------------
Mesa and Energas agree and acknowledge that from time to time Mesa may
desire that volumes of gas placed in Westar's storage facilities, pursuant
to the transaction described in Article II above, be redelivered to it by
Westar to the Kalka interconnect (commonly known as Kalka, located in the
SW/4 of Section 19, AB&M Survey, Potter County, Texas) or other
interconnect(s) to be mutually agreed upon on Energas' pipeline system.
Therefore, contemplating that such redelivered gas volumes would require
transportation services to be performed by Energas from such Energas/Westar
interconnect to mutually agreeable delivery point(s), Mesa and Energas
agree that Energas shall provide the necessary transportation services
from such Energas/Westar interconnect(s) to such delivery point(s) within
the City of Amarillo and its environs for a transportation fee as set forth
herein. Energas shall accept custody of such gas made available at such
Energas/Westar interconnect(s) and transport and redeliver such volumes of
gas to such delivery point(s). Furthermore, and in addition to the
transaction contemplated herein, Energas acknowledges that exchange gas
(gas required to be redelivered to Mesa on the basis of prior gas delivered
to such third party by Mesa) may be redelivered to Mesa by a third party
other than Westar, and that said third party would endeavor to redeliver
certain required volumes of gas through pipeline facilities owned by it or
by others to a point of interconnect with Energas' pipeline system. In this
event, and not unlike the transportation services to be performed by
Energas as to redelivered stored volumes of gas, Energas agrees to
transport said gas volumes made available from the point(s) of interconnect
on Energas' pipeline system, including the Kalka interconnect, to such
delivery point(s) within the City of Amarillo and its environs for a
transportation fee as set forth herein.
ARTICLE IV
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TRANSPORTATION OF NON "B" CONTRACT GAS FROM
-------------------------------------------
VARIOUS ENERGAS INTERCONNECTS
-----------------------------
In addition to Mesa's requirements for transportation under Articles
I, II, and III above (Fain Plant to industrial user, Fain Plant to Westar
interconnect, storage and exchange gas), Mesa also desires to avail itself
of Energas' transportation services relevant to Non "B" Contract gas which
may be produced, purchased or obtained through an exchange by Mesa for
consumption in the City of Amarillo and its environs. In the event of such
occurrence(s) and only in the event that gas is not available or is
inadequate under Articles I and III, Mesa may endeavor to have such gas
transported or otherwise exchanged to a point intersecting with an Energas
interconnect, thus requiring transportation services by Energas from such
point of interconnect to points of delivery for Mesa's industrial gas users
located within the City of Amarillo and its environs. Therefore, and not
unlike the transportation services to be performed by Energas as to gas
described in Article III above, Energas agrees to transport said gas
volumes made available subject to the conditions set forth above from the
selected point of interconnect on Energas' pipeline system to mutually
agreeable delivery point(s) located within the City of Amarillo and its
environs for a transportation fee set forth herein.
ARTICLE V
---------
PRICING FORMULA FOR REDELIVERIES OF "B" CONTRACT GAS
----------------------------------------------------
It is agreed to and acknowledged by Mesa and Energas that all volumes
of gas taken by Mesa in excess of Energas' daily demand for gas pursuant to
the above-referenced 1949 Agreement, as amended, as well as gas taken by
Mesa at the tailgate of the Fain Plant and stored or exchanged outside the
City of Amarillo and its environs, must eventually be returned for
consumption in the City of Amarillo and its environs. Although this
balancing of gas volumes need not occur within any particular time frame
and can only be initiated by Mesa as opposed to Energas, it is important
that Mesa and Energas agree upon the procedure under which the redelivered
"B" Contract gas may be purchased by Energas if offered by Mesa.
Therefore, if such "B" Contract gas is offered to Energas by Mesa, such
offer shall be in writing and set forth the price, volume, terms and other
provisions under which Mesa is willing to sell such gas. Energas, in turn,
shall have ten (10) days from the receipt of such notice in writing to
either accept or propose a counteroffer. If Energas does not respond to
such an offer within the said time frame, it will be deemed rejected.
Notwithstanding any provision contained herein to the contrary, under
no circumstance shall Energas be obligated to pay Mesa a price per MCF for
such redelivered gas which is in excess of that price then in existence
under the terms and conditions contained within that certain Agreement
previously referenced herein, and dated June 27, 1949, and all amendments
which have been or may be made thereto.
ARTICLE VI
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ENERGAS' PURCHASES OF GAS FOR ITS CUSTOMERS
-------------------------------------------
Mesa and Energas agree and acknowledge that pursuant to that certain
Assignment dated October 18, 1983, by and between Pioneer Corporation,
Energas Company, and Amarillo Oil Company, Energas succeeded to the June
27, 1949, Gas Purchase Agreement, as amended, and obligated itself to
purchase and take all volumes of gas made available by Pioneer (Mesa, as
successor) to service customers in the City of Amarillo and its environs.
Furthermore, Energas agrees that as to all future industrial sales entered
into subsequent to the date hereof, Energas shall be obligated to purchase
all such required volumes of gas from Mesa at a mutually agreeable price.
However, Energas acknowledges that Mesa shall be under no obligation to
sell such gas to Energas for its industrial customers in the event the
price and terms offered to Mesa are unacceptable to Mesa. If Mesa rejects
a request by Energas to purchase gas as aforesaid, then Energas may acquire
such desired volumes for its industrial customers from any source it may
select at a price equal to or lower than that offered to Mesa.
Although Mesa and Energas fully acknowledge and reaffirm Energas'
obligation as set forth under the Assignment referred to above, Mesa agrees
to release, and hereby does release and forever discharge, Energas and
EnerMart Inc. from any and all breaches or alleged breaches, if any, and
any and all claims of such breaches or alleged breaches of the
above-referenced 1949 Agreement, as amended, arising out of or due to any
sales of Non "B" Contract gas made prior to April 1, 1988 by Energas or
EnerMart Inc. to customers located in the City of Amarillo and its
environs.
ARTICLE VII
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MESA'S PURCHASE OF SUPPLEMENTAL GAS
-----------------------------------
Mesa and Energas acknowledge that due to potential shortages of "B"
Contract gas, Fain Plant shut-downs or other conditions not within the
control of Mesa, Mesa may be required to purchase volumes of gas from third
parties in sufficient quantities to supplement or otherwise satisfy its
contractual obligations for the delivery of gas to its industrial users.
In this regard, it is also acknowledged by the parties that the stored or
exchanged gas described within Article III is intended by Mesa to be a
potential source from which Mesa will acquire back-up gas, thus requiring
to gas purchases from a third party source. However, both Mesa and Energas
agree that in the event sufficient gas volumes as described in Article III
are not available to Mesa for any reason, then and in that event, Energas
agrees to sell, if available, sufficient supplemental volumes of gas to
Mesa from its own back-up gas supplies. In consideration for the delivery
of such gas by Energas to Mesa's customers, Mesa agrees to pay Energas a
sum per MCF equal to Energas' Small Industrial Rate Tariff applicable to
the City of Amarillo and its environs, as such Tariff may be amended from
time to time.
ARTICLE VIII
------------
TRANSPORTATION RATES
--------------------
The incremental rates to be charged by Energas for the transportation
services performed hereunder shall be as follows; provided, however, that
Energas shall have no responsibility or obligation whatsoever to provide
transportation services to any industrial user or any other customer
wherein the designated volumes to said user or customer are less than 1
MMCF per day.
The rates are to be applied to volumes actually delivered by Energas
at the industrial users' facility or the system interconnect terminating
the particular delivery transaction pursuant to Articles I, II, III, or IV.
Mesa agrees to, at its election, either provide shrinkage gas in kind, or
reimburse Energas for shrinkage gas for each transaction in an amount
relative to the delivered volumes, equal to the "lost and unaccounted for"
rate for the Energas Amarillo transmission system which for purposes of
this Agreement, the parties have agreed that the shrinkage will be set at
1.5%. If Mesa elects to reimburse Energas for shrinkage rather than
provide shrinkage volume, the shrinkage reimbursement shall be calculated
based upon Energas' Amarillo system weighted average cost of gas for the
pertinent month.
As to gas returned to Energas for further transportation services
pursuant to Articles III and IV hereof, Mesa agrees to inform Energas as to
when such volumes are being returned, the volumes being returned, and the
type of transaction under which the volumes are being returned, such
information to be provided in writing on a monthly basis by the 10th day of
the month following a month in which any such transactions occurred.
RATES
TOTAL FOR ARTICLES RATES FOR
VOLUMES/YEAR I, II, AND IV ARTICLE III
------------ -------------- -----------
0.000000 BCF to $0.165/MCF $0.04/MCF
2.000000 BCF
2.000001 BCF to $0.120/MCF $0.04/MCF
3.000000 BCF
3.000001 BCF to $0.100/MCF $0.04/MCF
4.000000 BCF
4.000001 BCF to $0.080/MCF $0.04/MCF
6.000000 BCF
6.000001 BCF $0.060/MCF $0.04/MCF
and above
For illustrative purposes only, if Energas were to transport total
volumes of gas for Mesa's account equal to 10.000000 BCF of gas during any
given period (of which 9 BCF was transported under Articles I, II, and IV,
and 1 BCF was transported under Article III, the transportation rate(s) to
be charged to Mesa would be:
2 BCF @ $0.165/MCF
1 BCF @ $0.120/MCF
1 BCF @ $0.100/MCF
2 BCF @ $0.080/MCF
3 BCF @ $0.060/MCF
1 BCF @ $0.040/MCF
--------------
$930,000.00
ARTICLE IX
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INTERRUPTIBLE TRANSPORTATION SERVICES
-------------------------------------
It is mutually understood and agreed as between Mesa and Energas that
all transportation services to be provided by Energas under the entirety of
this Agreement shall be provided on an "interruptible basis" and not
otherwise. In regard to any transportation interruptions, Energas shall
use its best efforts to promptly notify Mesa of any actual or reasonably
foreseeable interruptions so that Mesa can take such action as it may deem
prudent or advisable as to its industrial users.
ARTICLE X
---------
ENERGAS' EXCLUSIVE RIGHT TO TRANSPORT
-------------------------------------
Except as set forth herein Mesa and Energas agree that Energas is
hereby granted the exclusive right to transport the volumes of gas made
available and referred to within the entirety of this Agreement so long as
said Agreement remains in full force and effect. The exclusive rights
granted to Energas herein shall not prohibit the use by Mesa of a third
party's pipeline facilities and related transportation services during
periods when Energas has invoked interruption of its transportation
services, or for the transportation of volumes which on a daily basis
cannot be transported by Energas due to operational constraints of the
Energas Amarillo system.
ARTICLE XI
----------
REGULATORY APPROVAL OF TRANSPORTATION RATES
-------------------------------------------
Mesa and Energas acknowledge that the transportation rates set forth
herein may be challenged or have to be submitted by Energas to certain
regulatory agencies for approval and/or review. In the event the adequacy
of such transportation rates are successfully challenged or are adjusted by
an appropriate regulatory agency, then Mesa agrees, on a prospective basis
only, to reimburse Energas fifty percent (50%) of the difference between
the level of rates determined to be adequate in such a proceeding or
decision and the rates established herein multiplied by the volumes of gas
transported by Energas hereunder subsequent to the effective date of such
new rates. Notwithstanding any provision contained herein to the contrary,
either party may cancel the Agreement if such newly established rates are
deemed unacceptable to such party.
ARTICLE XII
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TERM OF AGREEMENT
-----------------
Unless otherwise terminated pursuant to Article XI, the primary term
of this Agreement will be until December 31, 1994. Thereafter, this
Agreement may remain in effect on an annual basis, provided the parties
mutually agree on all the terms and conditions for each subsequent year.
In this regard, if the parties have been unable to agree on all the terms
and conditions for 1995 by October 1, 1994 (or each subsequent October 1),
this Agreement will automatically terminate at 7:00 A.M. on January 1, 1995
(or each subsequent January 1). This same type of mutual agreement or
termination procedure will be followed as long as this Agreement has not
been previously terminated.
ARTICLE XIII
------------
ENERGAS' STATUS AS PRIVATE CARRIER
----------------------------------
Although Energas has entered into this Agreement based upon
negotiations as between Mesa and Energas, both Mesa and Energas stipulate
and agree that Energas' pipeline system, to be utilized for the
performance of Energas' obligations hereunder, is a private pipeline
system not owned, operated or managed by Energas for the transportation of
natural gas to or for the public for hire, and that this Agreement (and
the transportation services to be provided herein) has been executed by
the parties based in part upon the long- standing contractual obligations
existing as between Mesa and Energas as to the "B" Contract and the
rights and obligations of the parties under that certain Agreement dated
June 27, 1949, as subsequently amended, by and between Amarillo Oil
Company and Amarillo Gas Company, and that it is not Energas' intent or
desire to abandon or otherwise modify or amend its status as a private
carrier.
ARTICLE XIV
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BILLING AND PAYMENT
-------------------
1. On or before the twenty-fifth (25th) day of each calendar month
after deliveries of gas hereunder have commenced, Energas shall render to
Mesa an invoice that shows the total volume and BTU content of gas
delivered and redelivered hereunder during the preceding Billing Month and
the monies due therefor, including any amounts due for shrinkage which
Mesa is obligated under this Agreement to reimburse Energas. Mesa shall
pay such invoice within ten (10) days after Mesa's receipt thereof to the
address of Energas noted on the invoice.
2. In the event Mesa fails to pay the full amount due Energas when the
same becomes due, interest thereon shall accrue from the date that such
payment became due until it is paid in full at the lesser of (a) a rate of
fifteen percent (15%) per annum or (b) the highest lawful rate permitted by
applicable law. If such failure to pay continues for ten (10) days,
Energas may, in addition to any and all other remedies available to
Energas, suspend further deliveries of gas hereunder.
3. All invoices and payments are subject to correction for any errors
contained therein until twelve (12) months after the date Energas received
payment on an incorrect invoice or received an incorrect payment.
ARTICLE XV
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ASSIGNMENT
----------
This Agreement may not be assigned by either party hereto without the
prior written consent of the other party, which such consent shall not be
unreasonably withheld; except that no prior consent shall be required for
an assignment to (a) a company owning 100% of, wholly owned by, or having a
common parent with, such assigning party or (b) a trustee or trustees,
individual or corporate, as security for bonds or other obligations or
security, provided, however, that an assignment for security purposes shall
not relieve the assigning party of any of its obligations under this
Agreement.
ARTICLE XVI
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NOTICES
-------
Any notice required to be given under this Agreement or any notice
which either party hereto may desire to give the other party shall be in
writing and shall be considered duly delivered when hand-delivered or when
deposited in the United States mail, postage prepaid, registered or
certified, and addressed as follows:
Energas Company
P. O. Box 650205
Dallas, Texas 75256-0205
Attention: Gas Supply and Ind. Sales
Mesa Operating Limited Partnership
P. O. Box 2009
Amarillo, Texas 79189-2009
Attention: Gas Marketing Department
or such other address as Energas, Mesa, or their respective successors or
assigns shall designate by written notice given in the manner described
above. Routine communications, including monthly invoices, may be mailed
by ordinary mail and are deemed delivered when hand-delivered or when
deposited in the United States mail, postage prepaid, and addressed to the
above-designated name and address.
ARTICLE XVII
------------
PRIOR TRANSPORTATION AND SALES AGREEMENT TERMINATED
---------------------------------------------------
1. Energas and Mesa hereby expressly terminate that certain
Interruptible Gas Transportation and Sales Agreement dated and effective
April 1, 1988, as amended and supplemented.
ARTICLE XVIII
-------------
MISCELLANEOUS
-------------
1. It is expressly agreed that this Agreement does not modify or
amend in any way the obligations of the parties under the June 27, 1949,
Gas Purchase Agreement, as amended, and any summary, characterization or
statement in this Agreement concerning those obligations are for
convenience only and are not intended to change or amend the June 27,
1949, Gas Purchase Agreement, as heretofore amended.
2. All the terms and conditions of this Agreement were prepared
jointly by the parties hereto and not by any party to the exclusion of the
other.
3. Neither Mesa nor Energas shall be held responsible or liable for
damages for acts or conduct of the other, and each party shall indemnify
and hold harmless the other from claims or demands on account thereof
except to the extent such damages were caused by the action or inaction of
the other party.
4. Notwithstanding the provisions of the above, each party hereto
shall be responsible for all gas which is in its possession. The party
then in possession shall indemnify and hold harmless the other from all
claims or demands on account of all injuries to persons or property caused
by or arising from said gas except to the extent such injuries or damages
were caused by the action or inaction of the other party.
5. This Agreement shall be subject to all valid, relevant, present
and future state and federal laws, decisions or courts of competent
jurisdictions and all rules, regulations and orders of any regulatory
authority having jurisdiction. This Agreement shall be further governed
by, construed and enforced in accordance with and subject to the laws of
the State of Texas, without regard to its conflict of law, rules and/or
principles.
6. The parties expressly agree that this Agreement is not intended to
benefit any third party(ies) and shall not do so. This Agreement shall not,
at any time, give rise to any claim, demand, or cause of action, whether
known or unknown or contingent or absolute at this time or at any other
time, by any such third party(ies) claiming third party beneficiary rights
hereunder.
7. This Agreement contains the entire agreement between the parties
and supersedes any and all prior agreements, arrangements and
understandings between the parties relating to the transportation of the
gas by Energas for Mesa as discussed herein. This Agreement cannot be
modified or terminated orally.
8. The failure of either party hereto at any time to require
performance by the other party of any provision hereof shall in no way
affect the right of such party thereafter to enforce the same, nor shall
the waiver by either party hereto of any breach of any provision hereof by
the other party be taken or held to be a waiver by such party of any
succeeding breach of such provision, or as a waiver of the provision
itself.
9. Energas and Mesa agree to hold in confidence and not disclose the
terms of this Agreement or other information pertaining to it except as
required for financial reporting, tax, regulatory commissions, The
Securities and Exchange Commission, or other purposes for which disclosure
is legally compulsory on the part of the disclosing party.
10. If any provision, term, or condition in this Agreement shall be
held invalid, illegal, or unenforceable by any regulatory agency or
tribunal of competent jurisdiction, upheld by appellate court, if
appealed, the validity, legality and enforceability of the remaining
provisions, terms and conditions shall not in any way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this
Interruptible Gas Transportation and Sales Agreement as of the date first
above written which replaces that certain Interruptible Gas Transportation
and Sales Agreement dated April 1, 1988 as amended and supplemented.
ENERGAS COMPANY MESA OPERATING LIMITED PARTNERSHIP
a division of Atmos By: Pickens Operating Co., General Partner
Energy Corporation
By: /s/ Toby A. Priolo By: /s/ Claude B. Jenkins
------------------ ---------------------------------------------
Toby A. Priolo Claude B. Jenkins
Vice President Vice President-Marketing
GENERAL TERMS AND CONDITIONS
TO
INTERRUPTIBLE GAS TRANSPORTATION AND SALES AGREEMENT
----------------------------------------------------
For purposes of these Terms and Conditions, unless the context hereof
requires otherwise, the following definitions shall be applicable:
Section 1.1. The terms "gas" shall mean natural gas produced from gas
-----------
wells (i.e., gas-well gas), gas produced in association with oil (i.e.,
casinghead gas), and the residue gas resulting from the processing of both
casinghead gas and gas-well gas.
Section 1.2. The term "day" shall mean the twenty-four (24) hour
-----------
period commencing at 8:00 a.m., Central Time, on one calendar day and
ending at 8:00 a.m. Central Time, on the following calendar day.
Section 1.3. The term "month" or "Billing Month" shall mean the
-----------
period extending from 8:00 a.m., Central Time, on the first day of one
calendar month to 8:00 a.m., Central Time, on the first day of the next
succeeding calendar month, except that the first Billing Month shall
commence on the date of the initial delivery of gas hereunder and shall end
at 8:00 a.m., Central Time, on the first day of the next succeeding
calendar month.
Section 1.4. The term "MCF" shall mean one thousand (,000) cubic
-----------
feet at a temperature of 60 degree Fahrenheit and at an absolute pressure
of 14.65 pounds per square inch.
Section 1.5. The term "BTU" shall mean British thermal unit and
-----------
represents the quantity of heat required to raise the temperature of one
(1) pound avoirdupois of pure water from 58.5 degree Fahrenheit to 59.5
degree Fahrenheit at a constant pressure of 14.73 psia.
Section 1.6. The term "Energas" shall mean Energas Company, a
-----------
division of Atmos Energy Corporation, and the term "MESA" shall mean MESA
Operating Limited Partnership. Energas and MESA are the only parties to
these Terms and Conditions and the related Interruptible Gas Transportation
and Sales Agreement.
Section 1.7. The term "heating value" shall mean the number of BTUs
-----------
produced by the complete combustion, at a temperature of 60 degree
Fahrenheit if saturated with water vapor and at a constant pressure of
14.73 psia and under standard gravitational force (acceleration 980.665 cm
per sec per) with air of the same temperature and pressure as the gas when
the products of combustion are cooled to the initial temperature of the gas
and air and when the water formed by combustion is condensed to the liquid
state.
Section 1.8. The term "psia" shall mean pounds per square inch
-----------
absolute.
Section 1.9. The term "Receipt Point(s)" shall mean the point(s) at
-----------
which gas is delivered by MESA to Energas for transportation pursuant to
the Agreement.
Section 1.10. The term "Delivery Points(s)" shall mean the point(s)
------------
at which Energas shall redeliver gas to or on behalf of MESA pursuant to
the Agreement.
Section 1.11. The term "Agreement" or "the Agreement" as used
------------
throughout the entirety of this document shall mean the January 1, 1991
Interruptible Gas Transportation and Sales Agreement.
ARTICLE II
Pressure
-------
Section 2.1. Deliveries of gas by MESA at the Receipt Point(s) and
-----------
redeliveries of gas by Energas at the Delivery Point(s) shall be made at
pressures mutually agreeable by the parties hereto and sufficient to effect
delivery into the facilities of the party receiving such gas at such
points; provided, however, that neither party shall be required to install
or operate any compression facilities in order to deliver the as at any
specific pressure.
ARTICLE II
Pressure
--------
Section 2.1. Deliveries of gas by MESA at the Receipt Point(s) and
-----------
redeliveries of gas by Energas at the Delivery Points(s) shall be made at
pressures mutually agreeable by the parties hereto and sufficient to effect
delivery into the facilities of the party receiving such gas at such
points; provided, however, that neither party shall be required to install
or operate any compression facilities in order to deliver the gas at any
specific pressure.
ARTICLE III
Measurement of Gas
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Section 3.1. Unless otherwise specifically provided herein, the unit
-----------
of volume for purposes of the measurement of gas delivered hereunder at the
Receipt Point(s) shall be one (1) Mcf
AMENDMENT TO
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INTERRUPTIBLE GAS TRANSPORTATION AND SALES AGREEMENT
----------------------------------------------------
THIS AGREEMENT, is made and entered into as of the 1st day of January,
1995, by and between ENERGAS COMPANY, a division of ATMOS ENERGY
CORPORATION, a Texas corporation, hereinafter referred to as "Energas" and
MESA OPERATING CO., a Delaware corporation, hereinafter referred to as
"MESA";
W I T N E S S E T H
WHEREAS, on January 1, 1991, Energas and MESA entered into an
Interruptible Gas Transportation and Sales Agreement ("Agreement"), whereby
Energas would transport gas for MESA and make emergency gas sales to MESA,
and
WHEREAS, Energas and MESA desire to amend said Agreement dated January
1, 1991, to extend the Term thereof and to provide for certain other
changes.
NOW THEREFORE, in consideration of the mutual agreements of the
parties, Energas and MESA agree as follows:
1. Except for Article VI, all references to that "Agreement dated
June 27, 1949," or substantially similar type references, shall be
deleted and "Amarillo Supply Agreement dated January 2, 1993"
substituted therefore.
2. The parenthetical phrase in lines 9 and 10 of Article II on page 2
is hereby deleted.
3. The first sentence of Article V is hereby deleted and the
following is substituted therefore:
"It is agreed to and acknowledged by MESA and Energas that
with respect to those volumes of "B" Contract gas taken by MESA in
excess of Energas' first call rights pursuant to the Amarillo
Supply Agreement dated January 2, 1993, which are taken by MESA at
the tailgate of the Fain Plant and stored or exchanged outside the
City of Amarillo and its environs, MESA is to cause, like volumes
of gas to be made available, under certain conditions, in the City
of Amarillo and its environs.
4. ARTICLE VI. ENERGAS' PURCHASES OF GAS FOR ITS CUSTOMERS and is
hereby deleted in its entirety and the following Article VI
substituted therefore.
ARTICLE VI
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ENERGAS' AND ENERMARTS PURCHASES OF GAS FOR THEIR CUSTOMERS
----------------------------------------------------------
MESA agrees to release, and hereby does release and forever discharge,
Energas and EnerMart Inc. from any and all breaches or alleged breaches, if
any, and any and all claims of such breaches or alleged breaches of the
June 27, 1949 Amarillo Supply Agreement, as amended, arising out of or due
to any sales of Non 'B' Contract gas made prior to April 1, 1988 by Energas
or EnerMart Inc. to customers located in the City of Amarillo and its
environs.
5. ARTICLE VIII. TRANSPORTATION RATES is hereby deleted in its
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entirety and the following Article VIII is substituted therefore:
"ARTICLE VIII
------------
TRANSPORTATION RATES
--------------------
The rates to be charged by Energas for the transportation services
performed hereunder shall be as set forth in this ARTICLE VIII; provided,
however, that Energas shall have no responsibility or obligation whatsoever
to provide transportation services to any industrial user or any other
customer wherein the designated volumes to said user or customer are less
than 1 MMCF per day.
The rates are to be applied to volumes actually delivered by Energas
at the industrial users' facility or the system interconnect terminating
the particular delivery transaction pursuant to Articles I, II, III, or IV.
MESA agrees, at its election, to either provide shrinkage gas in kind, or
reimburse Energas for shrinkage gas for each transaction in an amount
relative to the delivered volumes, equal to the lesser of the actual "lost
and unaccounted for" rate for the Energas Amarillo transmission system or
1.5%. If MESA elects to reimburse Energas for shrinkage rather than
provide shrinkage volume, the shrinkage reimbursement shall be calculated
based upon Energas' Amarillo system weighted average cost of gas for the
pertinent month.
As to gas returned to Energas for further transportation services
pursuant to Articles III and IV hereof, MESA agreed to inform Energas as to
when such volumes are being returned, the volumes being returned, and the
type of transaction under which the volumes are being returned. Such
information is to be provided in writing on a monthly basis, by the 10th
day of the month following a month in which any such transactions occurred.
The transportation rates per MCF applicable under Articles I, II and
IV shall ultimately be determined on a calendar year basis, but shall
initially be billed to and paid for by MESA on a First Tier Rate basis
because the amount of calendar year volumes so transported by Energas will
not be know until year end. Periodically during the calendar year, but no
less than twice each year, the parties shall meed to determine the actual
volumes transported and to adjust the forecast of volumes to be transported
by Energas for MESA during the remainder of the year. From these meeting
the parties shall attempt to determine when the First Tier volumes have
been transported for the current year and consequently when any Second Tier
Volume transportation and Second Tier Rates apply if any. for purposes of
ultimately applying the First tier Rate (5.5 cents/MCF) or any Second tier
Rate (5.0 cents/MCF), the parties shall no later than sixty (60) days after
the end of the calendar year, determine the total calendar year volumes of
gas actually so transported by Energas and make a payment adjustment
without interest.
For the First Tier volumes transported by Energas on a calendar basis
for MESA pursuant to Articles I, II, and IV, the First Tier Rate shall
ultimately apply. For those volumes so transported which exceed the First
Tier Volumes (Second Tier Volumes), the Second Tier Rate shall ultimately
apply. For all gas transported by Energas for MESA pursuant to Article
III, a Third Tier Rate of 4.0 cents/MCF per month shall apply.
6. ARTICLE ENERGAS' EXCLUSIVE RIGHT TO TRANSPORT, is hereby
deleted in its entirety and the following is substituted
therefore.
"ARTICLE X
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ENERGAS' RIGHT TO TRANSPORT
---------------------------
Except as set forth herein, MESA and Energas agree that Energas is
hereby granted the right to transport one hundred percent (100%) of the
First Tier volumes so long as this Agreement remains in full force and
effect. The term "First Tier Volumes" as used herein shall mean fifty
percent (50%) of the "Excess Gas" described in Articles I and II and fifty
percent (50%) of the non-B-Contract gas described in Article IV which Mesa
sells annually to its existing customers for industrial consumption in the
City of Amarillo and its environs. Such rights granted to Energas herein
shall not prohibit the use by MESA of a third party's pipeline facilities
and related transportation services during periods when Energas has invoked
interruption of its transportation service, or for the transportation of
volumes which on a daily basis cannot be transported by Energas due to
operational constraints of the Energas Amarillo system."
7. ARTICLE XII TERM OF AGREEMENT is hereby deleted in its entirety
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and the following is substituted therefore:
"ARTICLE XII
------------
TERM OF AGREEMENT
-----------------
Unless otherwise terminated pursuant to Article XI, the primary term
of this Agreement will be until December 31, 1999."
8. This Agreement, as amended herein, shall remain in full force
and effect.
IN WITNESS WHEREOF, Energas and MESA have caused this Agreement to be
executed and effective as of the day and year first written above.
ENERGAS COMPANY MESA OPERATING CO.
A Division of
Atmos Energy Corporation
By: /s/ Toby A. Priolo By: /s/ Paul W. Cain
------------------------ ------------------------
Toby A. Priolo
Title: Vice President Title: President & Chief Operating Officer
--------------------- -----------------------------------
Atmos Energy Corporation