1 Service Agreement (Storage Gas Service) THIS AGREEMENT, made and entered into this 1st day of September, 1987, by and between NORTHWEST PIPELINE CORPORATION, a Delaware Corporation, hereinafter called "Seller," and WASHINGTON NATURAL GAS COMPANY, a Washington Corporation, hereinafter called "Buyer." In consideration of the mutual covenants and agreements herein set forth, the parties hereto agree as follows: ARTICLE I - GAS TO BE SOLD AND PURCHASED Subject to the terms, conditions and limitations hereof and of the applicable Rate Schedule SGS-1, Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase and receive from Seller, the following quantities of natural gas: A Contract Demand of 1,561,859 therms, A Seasonal Quantity of 46,795,000 therms, A Best Efforts Volume of 311,018 therms. The sum of the Contract Demand and Best Efforts Volumes delivered shall not exceed, however, the Seasonal Quantity set out above. Provided, however, Buyer may release all or a portion of its Contract Demand, Best Efforts Volumes, and/or its Seasonal Contract Quantity to the Washington Water Power Company as provided in Rate Schedule S-1, Section 5.4 of Washington Natural Gas Company's Gas Tariff, Original Volume No. 1. Provided, however, that Seller shall not be obligated on any day to deliver a volume of gas to Buyer for any community or distribution system in excess of the Maximum Daily Quantity therefore specified on Exhibit A hereto and, on any such day, the aggregate of all deliveries made hereunder for all such communities and distribution systems shall not exceed the Contract Demand specified above or the applicable percentage thereof as specified in Rate Schedule SGS-1. Buyer owns an undivided interest in Jackson Prairie Storage Project, and for the purpose of this Agreement and of Rate Schedule SGS-1, Buyer's Owned Storage Demand shall be 1,310,000 therms, and Buyer's Owned Storage Seasonal Quantity shall be 37,728,000 therms. 1 of 3 2 ARTICLE II - DELIVERY POINTS AND PRESSURES Delivery of natural gas by Seller to Buyer shall be at or near the points whose locations are described in Exhibit B hereto. Gas shall be delivered by Seller to Buyer at such pressures as may be available, from time to time, at the said points of delivery but in no event at pressures less than the pressures specified in Exhibit B hereto. ARTICLE III - APPLICABLE RATE SCHEDULES Buyer agrees to pay Seller for all natural gas service rendered under the terms of this Agreement in accordance with Seller's Rate Schedule SGS-1 as filed with the Federal Energy Regulatory Commission, and as such Rate Schedule may be amended or superseded from time to time. This Agreement shall be subject to the provisions of such Rate Schedule and the General Terms and Conditions applicable thereto on file with the Federal Energy Regulatory Commission and effective from time to time, which by this reference are incorporated herein and made a part hereof. ARTICLE IV - TERM OF AGREEMENT This Agreement shall become effective on the date so designated by the Federal Energy Regulatory Commission as the effective date thereof, and shall continue in effect for a period continuing through October 31, 1989. ARTICLE V - CANCELLATION OF PRIOR AGREEMENTS When this Agreement takes effect, it supersedes, cancels, and terminates the following Agreement: Service Agreement dated August 27, 1979, between NORTHWEST PIPELINE CORPORATION, "Seller," and WASHINGTON NATURAL GAS COMPANY, "Buyer." ARTICLE VI - SUCCESSORS AND ASSIGNS This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. ARTICLE VII - EXHIBITS All exhibits attached hereto are incorporated by reference herein as if set forth in full. 2 of 3 3 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above set forth. NORTHWEST PIPELINE CORPORATION (Seller) By /s/ L.C. RANDOLPH, JR. ------------------------------------------------- Vice President, Gas Supply & Marketing (Title) Attest: /s/ MARY E. WHITE -------------------------------------------- Assistant Secretary (Title) WASHINGTON NATURAL GAS COMPANY (Buyer) By /s/ JAMES W. GUSTAFSON ------------------------------------------------- Senior Vice President (Title) Attest: /s/ PAUL A. HOGLUND -------------------------------------------- Senior Vice President (Title) 3 of 3 4 EXHIBIT A TO SERVICE AGREEMENT DATED September 1, 1987, FOR SERVICE UNDER RATE SCHEDULE SGS-1 Effective: Upon the Date so Designated by the Federal Energy Regulatory Commission Supersedes EXHIBIT A Effective: October 1, 1979 Maximum Daily Community or System Ouantity - ------------------- ------------- (Description) (Therms) Centralia and Chehalis, Washington, and environs: 27,000 Lake Stevens, Washington, and environs: 2,000 Monroe, Washington, and environs: 2,000 Seattle, Tacoma, Olympia, Everett, North Bend and Snoqualmie, Washington, and environs: Olympia 36,000 North Tacoma 360,000 South Seattle 572,350 Issaquah 33,000 North Seattle and Everett 355,000 Redmond 67,909 South Tacoma 33,600 Rainier Terrace and Puyallup 19,000 North Bend and Snoqualmie 27,000 Lake Wilderness and Covington 6,000 Evergreen Shores-Black Lake 17,000 1 of 2 5 EXHIBIT A TO SERVICE AGREEMENT DATED September 1, 1987, FOR SERVICE UNDER RATE SCHEDULE SGS-1 (Continued) Maximum Daily Community or System Quantity - ------------------- ------------- (Description) (Therms) Snohomish, Washington, and environs: 4.000 NORTHWEST PIPELINE CORPORATION (Seller) By /s/ L.C. RANDOLPH ------------------------------------- L.C. Randolph (Title) Vice President, Gas Supply & Marketing Executed on February 17, 1988 ---------------------------- WASHINGTON NATURAL GAS COMPANY (Buyer) By /s/ JAMES W. GUSTAFSON ------------------------------------- James W. Gustafson (Title) Senior Vice President Executed on February 23, 1988 ---------------------------- 2 of 2 6 EXHIBIT B TO SERVICE AGREEMENT DATED September 1, 1987, FOR SERVICE UNDER RATE SCHEDULE SGS-1 Effective: Upon the Date so Designated by the Federal Energy Regulatory Commission Supersedes EXHIBIT B Effective: October 1, 1979 DELIVERY POINT DELIVERY PRESSURE - -------------- ----------------- (Location) (psig) For Centralia and Chehalis, Washington, and environs: Adjacent to Seller's main line in the 400 SE/4NE/4, Section 36, Township 14 North, Range 2 West, Lewis County, Washington Various main line taps located on Seller's 150 transmission line in Lewis County, Washington For Lake Stevens, Washington, and environs: Adjacent to Seller's main line in the 150 NW/4SW/4, Section 9, Township 29 North, Range 6 East, Snohomish County, Washington For Monroe, Washington, and environs: Adjacent to Seller's lateral line in the 150 SE/4NE/4, Section 35, Township 28 North, Range 6 East, Snohomish County, Washington For Seattle, Tacoma, Olympia, Everett, North Bend and Snoqualmie, Washington, and environs: (Olympia) Adjacent to Seller's lateral line 300 in the SW/4NW/4, Section 15, Township 17 North, Range 1 West, Thurston County, Washington (North Tacoma) Adjacent to Seller's lateral 260 line in the SW/4NW/4, Section 7, Township 20 North, Range 5 East, Pierce County, Washington 1 of 3 7 EXHIBIT B TO SERVICE AGREEMENT DATED September 1, 1987, FOR SERVICE UNDER RATE SCHEDULE SGS-1 (Continued) DELIVERY POINT DELIVERY PRESSURE - -------------- ----------------- (Location) (psig) For Seattle, Tacoma, Olympia, Everett, North Bend and Snoqualmie, Washington, and environs (Continued): (South Seattle) Adjacent to Seller's lateral 260 line in the SE/4SE/4, Section 19, Township 23 North, Range 5 East, King County, Washington (Issaquah) Adjacent to Seller's lateral 260 line in the NW/4SE/4, Section 21, Township 24 North, Range 6 East, King County, Washington (North Seattle and Everett) Adjacent to 260 Seller's lateral line in the NW/4SE/4, Section 15, Township 27 North, Range 4 East, Snohomish County, Washington (Redmond) Adjacent to Seller's main line in the 400 NE/4SE/4, Section 9, Township 25 North, Range 6 East, King County, Washington (South Tacoma) Adjacent to Seller's lateral 400 line in the SE/4NW/4, Section 14, Township 19 North, Range 3 East, Pierce County, Washington (Rainier Terrace - Puyallup) Adjacent to 150 Seller's lateral line in the NW/4NE/4, Section 16, Township 19 North, Range 4 East, Pierce County, Washington (North Bend and Snoqualmie) Adjacent to 400 Seller's main line in the NW/4SW/4, Section 11, Township 24 North, Range 6 East, King County, Washington (Lake Wilderness and Covington) Adjacent to 300 Seller's main line in the NE/4NE/4, Section 31, Township 22 North, Range 6 East, King County, Washington 2 of 3 8 EXHIBIT B TO SERVICE AGREEMENT DATED September 1, 1987, FOR SERVICE UNDER RATE SCHEDULE SGS-1 (Continued) DELIVERY POINT DELIVERY PRESSURE - -------------- ----------------- (Location) (psig) For Seattle, Tacoma, Olympia, Everett, North Bend and Snoqualmie, Washington, and environs (Continued): (Evergreen Shores-Black Lake) Adjacent to 150 Seller's lateral line in the NW/4NE/4, Section 1, Township 17 North, Range 3 West, Thurston County, Washington Various main line taps located on Seller's 150 transmission line in Thurston, Pierce, King, and Snohomish Counties, Washington For Snohomish, Washington and environs: Adjacent to Seller's main line in the SW/4SE/4, 150 Section 16, Township 28 North, Range 6 East, Snohomish County, Washington NORTHWEST PIPELINE CORPORATION (Seller) By /s/ L.C. RANDOLPH, JR. ------------------------------------ L.C. Randolph (Title) Vice President Executed on: February 17, 1988 ------------------------- WASHINGTON NATURAL GAS COMPANY (Buyer) By /s/ JAMES W. GUSTAFSON ------------------------------------ James W. Gustafson (Title) Senior Vice President Executed on: February 23, 1988 ------------------------- 3 of 3