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FIRM STORAGE SERVICE AGREEMENT
Questar Pipeline Company
79 South State Street
Salt Lake City, Utah 84111 Contract No. ST047
THIS AGREEMENT is entered into this 14th day of April, 1993, by and
between QUESTAR PIPELINE COMPANY, CLAY BASIN STORAGE DIVISION, a Utah
corporation, "Seller," and WASHINGTON NATURAL GAS COMPANY, "Buyer."
Buyer represents that it desires Seller to store natural gas in
Seller's Clay Basin Storage Field; and Seller represents that it is seeking
FERC authorization to expand the storage capacity available in order to provide
the storage service for Buyer on the terms specified in this agreement.
Seller and Buyer agree as follows:
AGREEMENT TERMS
The terms selected below, together with the terms and conditions of
this agreement, including the attached Appendices A and B, constitute the
storage service to be provided and the rights and obligations of the parties.
Buyer shall designate receipt and delivery points on Appendix A that are
acceptable to Seller.
1. BUYER'S STATUS (Please Check One Only):
XX
------ Local Distribution Company
------ Intrastate Pipeline Company
------ Interstate Pipeline Company
------ Marketer/Broker
------ Producer
------ End-User
------ Other (Specify)
2. VOLUMES TO BE INJECTED AND WITHDRAWN (Subject to the provisions of
Section 8, below):
Firm Service (Please see note below for MRD calculation):
2,800 Annual Working Gas Volume (MMcf)
23.33 Minimum Required Deliverability Volume MMcf/day (MRD)
Note: MRD must be calculated using the formula shown
below:
MRD = Annual Working Gas Volume (MMcf/year)
150 days x .80
QPCO149FMSGCBXP
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3. RATES (Subject to the provisions of paragraph 2 of Appendix B):
Firm Storage Service - Rate Schedule FSS DEMAND CHARGES:
Deliverability (Please Check One Only):
XX
------ the maximum rate set forth in Seller's Statement of Rates
------ a discounted rate of $ /Mcf
Inventory Capacity (Please Check One Only):
XX
------ the maximum rate set forth in Seller's Statement of Rates
------ a discounted rate of $ /Mcf
Prior to the time the terms and conditions set forth in Appendix B are
met to the sole satisfaction of Seller, demand charges under this
agreement shall be applied to the levels of Annual Working Gas Volume
and MRD that Seller, in Seller's sole judgement, can actually provide
in the event the Annual Working Gas Volume and MRD requested by Buyer
and set forth in Section 2 above cannot reasonably be commenced.
Unless Seller notifies Buyer in writing that Seller is unable to
provide the service at the requested levels, Buyer shall be
responsible for all demand charges, as set forth above in this Section
3.
COMMODITY CHARGES:
Injection: $0.00851/Mcf
Withdrawal: $0.01631/Mcf
Overrun: $0.29124/Mcf
4 . ACA CHARGE:
XX
---- yes
---- no
5. ADDITIONAL FACILITIES CHARGES:
Additional facilities:
XX
---- are required
---- are not required
Charge:
N/A lump-sum payment of $
----
N/A monthly fee of $
----
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6. TERM OF THE AGREEMENT (Subject to the provisions of Section 8, below):
(a) Initial term
May 1, 1994 to May 22, 2020
(b) Renewal term
XX
---- none
---- other:
(c) Termination. This agreement shall be renewed as stated in
Section 6(b) above. This agreement may be terminated during
any renewal period by either party upon 30 days' written
notice to the other party prior to each injection period.
7. NOTICE: Unless otherwise provided in Seller's FERC Gas Tariff, Volume
No. 2-A, all notices shall be given by telephone or other electronic means and
confirmed in writing at the following addresses:
Buyer:
Washington Natural Gas Company
P.O. Box 1869
Seattle, Washington 98111
Attention: Mr. John F. Stefani
Telephone: (206) 224-2251
Fax: (206) 328-7875
QUESTAR PIPELINE COMPANY
79 South State Street
Salt Lake City, Utah 84111
Attn: Director, Gas Supply Planning
Telephone: (801) 530-2020
Fax: (801) 530-2570
8. COMMENCEMENT OF SERVICE: Seller shall not be obligated to commence the
requested Clay Basin expansion service under this agreement until all terms and
conditions of Appendix B are met to the sole satisfaction of Seller. However,
at any time prior to such fulfillment of the Appendix B terms and conditions,
service may, if deemed feasible solely by Seller, be made available to Buyer
using the priority determined by applying the present value ranking procedures
set forth in Section 4.2 of Seller's FERC Gas Tariff, Original Volume No. 2-A
to the effective service requests underlying the executed expansion service
agreements. Service to remaining Buyers will commence as soon as deemed
operationally practicable by Seller.
If the FERC authorizes only a portion of the total expansion capacity
requested by Seller and the authorized capacity is oversubscribed by Buyers who
have executed a tendered firm storage service agreement, then the capacity so
approved will be made available to such Buyers using the priority determined by
applying the present value ranking procedure set forth in Section 4.2 of
Seller's FERC Gas
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Tariff, Original Volume No. 2-A to the respective executed service agreements.
Service agreements receiving no allocation of capacity under this methodology,
and the respective underlying requests for service, shall be considered void
for all purposes.
9. TARIFF: This agreement shall be subject to the terms and conditions
attached to and made part of this agreement as Appendix B and all the
applicable rate schedules and the General Terms and Conditions of Seller's FERC
Gas Tariff, Original Volume No. 2-A, as it may be amended or superseded from
time to time.
10. RESTRUCTURING TARIFF: Upon implementation by Seller of tariff changes
required by the FERC to comply with restructuring under Order No. 636 in
Docket No. RS92-9, this agreement will be reformed to conform to Seller's
tariff. The reformed agreement will be issued to Buyer according to the
procedures set forth in Seller's tariff, as it may be amended or superseded
from time to time.
The parties have executed this agreement to be effective the first day of
its term.
BUYER: WASHINGTON NATURAL GAS CO. QUESTAR PIPELINE COMPANY
-----------------------------
By: /s/ JOHN F. STEFANI By: /s/ JOHN B. CARRICABURU
----------------------------- -------------------------------
Title: V.P. Gas Supply & Ind. Mktg. Title: V.P., Gas Supply & Marketing
-----------------------------
Date: April 12, 1993 Date: April 14, 1993
----------------------------- --------------------------------
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APPENDIX A
1. RECEIPT POINTS
DESCRIPTION #000407 NPC Tap Clay Basin QUANTITY/MCF
Section 29, T3N, R22E 2,800,000
Daggett County, Utah
#000408 W. Terminus of Storage M.L. 70
Section 29, T3N, R22E
Daggett County, Utah
2. DELIVERY POINTS
DESCRIPTION #000407 NPC Tap Clay Basin QUANTITY/MCF
Section 29, T3N, R22E 2,800,000
Daggett County, Utah
#000408 W. Terminus of Storage M.L. 70
Section 29, T3N, R22E
Daggett County, Utah
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APPENDIX B
CONDITIONS PRECEDENT TO SERVICE
1. Seller shall not be obligated to provide expanded firm storage service
at Clay Basin under this agreement until the following conditions are met to
the sole satisfaction of Seller:
a. Receipt by Seller of signed firm storage service agreements
from one or more Buyers for sufficient capacity and upon terms and
conditions acceptable to Seller that justify construction of the Clay
Basin expansion;
b. Receipt and acceptance by Seller of all approvals required to
expand the capacity at Clay Basin as requested by Seller and to
construct the facilities necessary to provide all expanded firm
storage service requested by all expansion Buyers and to commence the
service, including all necessary authorizations from federal, state
and local municipal agencies and other government authorities, in
final form and substance satisfactory to Seller, permitting or
authorizing the service;
c. Receipt and acceptance by Seller of all necessary rights of
way, easements and permits, if any, required to construct, operate and
maintain the Clay Basin expansion facilities;
d. Completion of construction and commencement of actual
operation of all facilities, including injection of all required
cushion gas, necessary to provide firm storage service to all
expansion buyers.
2. Should the FERC approve Clay Basin storage rates for firm service
above the rates in effect on February 12, 1993, and such increase is due solely
to costs associated directly with the expansion of Clay Basin, Buyer may
terminate this agreement.
3. Buyer's creditworthiness shall remain a continuing condition precedent
to Seller's obligation to perform. Seller may require Buyer to reverify its
creditworthiness as Seller deems necessary.
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