1
EXHIBIT 10.3
SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION SERVICE
UNDER RATE SCHEDULE FS-1
THIS AGREEMENT made effective as of 08:00 MST on November 1, 1993, or such
later date as is determined to be the Decontracting Date under the provisions
of the Decontracting Agreement among Alberta and Southern Gas Co. Ltd., Pacific
Gas Transmission Company, Pacific Gas and Electric Company and the
decontracting producers, dated September 22, 1993;
ALBERTA NATURAL GAS COMPANY LTD, a body corporate, having an office
and carrying on business in the City of Calgary, in the Province of
Alberta (hereinafter referred to as "Company"),
- and -
PACIFIC GAS AND ELECTRIC COMPANY, a body corporate, having an office
and carrying on business in the City of San Francisco in the State of
California (hereinafter referred to as "Shipper")
WHEREAS, Company's Facilities extend from a point of interconnection with the
pipeline facilities of NOVA Corporation of Alberta at the Alberta-British
Columbia border near Coleman, Alberta, through southeast British Columbia to a
point of interconnection with the pipeline facilities of Pacific Gas
Transmission Company at the international border near Kingsgate, British
Columbia; and
WHEREAS, Shipper desires Company, on a firm basis, to transport certain volumes
of natural gas through Company's Facilities from Alberta/British Columbia
border near Coleman, Alberta to British Columbia/U.S. international border near
Kingsgate, B.C.; and
WHEREAS, Company is willing to transport certain volumes of natural gas for
Shipper, on a firm basis;
NOW, THEREFORE, the parties agree as follows:
1. This Agreement is subject to all valid legislation with
respect to the subject matters hereof, either provincial or federal, and to all
valid present and future decisions, orders, rules, and regulations of all duly
constituted governmental authorities having jurisdiction.
2. Shipper acknowledges receipt of a current copy of Company's
Gas Transportation Service Documents and Company agrees to provide Shipper with
any amendments thereto.
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3. The terms used herein shall have the same meanings as are
ascribed to corresponding terms in the General Terms and Conditions contained
in the Gas Transportation Service Documents.
4. Shipper hereby requests, and Company agrees to provide Service
pursuant to Service Schedule FS-1 in accordance with the attached Schedule A
which is incorporated into and forms part of this Agreement, such Service to
commence on the Service Availability Date and to terminate, subject to the
provisions hereof, on the Service Termination Date.
5. Shipper agrees to make gas available for Shipper's share of
Company Use Gas, or pay for such gas, pursuant to Article V of the General
Terms and Conditions.
6. Company undertakes to redeliver to Shipper, and Shipper agrees
to accept, at the Delivery Point, a volume of gas equivalent in heat content to
the volume received by Company from Shipper, at the Receipt Point, after
deducting gas volumes, if any, provided by Shipper for Company Use Gas.
7. In providing service to its existing or new Shippers, Company
will use the priority of service specified in Article XI of Company's General
Terms and Conditions.
8. Prior to the Service Availability Date, Shipper shall provide
Company with all information identified in Company's Request for Transportation
Form.
9. Shipper agrees to pay, during the period commencing from the
Service Availability Date, and in accordance with Schedule FS-1, the General
Terms and Conditions, the Statement of Effective Rates and Charges and Schedule
"A" attached hereto (all as may be amended from time to time), the rates, tolls
and charges fixed by Company from time to time, in respect of each month, and
portion thereof that this Service Agreement and any renewal thereof is in
effect.
In the event that the Service Availability Date occurs on any day
other than the first day of a month, then the demand charge payable for such
month under section 3.1 of Service Schedule FS-1 shall be the product resulting
from multiplying the demand charge otherwise payable for such month by a
fraction, the numerator of which shall be the number of days in such month
subsequent to and including the Service Availability Date and the denominator
of which is the total number of days in such month.
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10. Shipper covenants that it will make timely arrangements for
upstream and downstream transportation, gas supply and markets and all
necessary governmental authorizations and that it will advise the upstream and
downstream transporters of the receipt and delivery points under this
Agreement.
Shipper acknowledges and agrees with Company that Company is
relying upon the covenant contained in this clause and agrees that if any such
arrangements or authorizations are not in place prior to the Service
Availability Date, such will not affect the Shipper's obligation to pay any
demand charge, surcharge, or any other amount payable to the Company.
11. If Shipper elects to exercise its option to terminate this
Service Agreement as provided for in Clause 9. of Service Schedule FS-1, it
shall execute and serve upon Company a termination notice not less than twelve
months prior to the Service Termination Date as such date may be extended from
time to time.
12. Shipper agrees not to make demand or bring action against
Company for Company's refusal to transport gas hereunder in the event that any
upstream or downstream transporter fails to receive or deliver gas as
contemplated by this agreement provided that such failure was not directly
caused by the negligence of Company.
13. Every notice, request, demand, statement or bill provided for
by the Service Schedules, the Service Agreements and the General Terms and
Conditions, or any notice which either Shipper or Company may wish to give to
the other, shall be in writing and shall be directed as follows:
Shipper: PACIFIC GAS AND ELECTRIC COMPANY
Gas Services Department, B1GA
Rm. 1611, 77 Beale Street
P.O. Box 770000
San Francisco, California 94177
Attn: Mr. H. O. LaFlash, Manager, Gas Services
Company: ALBERTA NATURAL GAS COMPANY LTD
2900, 240 - Fourth Avenue S.W.
Calgary, Alberta, Canada
T2P 4L7
Attn: Mr. T. L. (Tim) Stauft, P.Eng.
Manager, Customer Services
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Any notice may be given by personal delivery, by telecopier or by mail and
shall be deemed to be given on the day of delivery, if by personal delivery or
by telecopier, and four (4) business days after mailing if by mail. Any notice
may also be given by telephone followed immediately by telecopier, or other
telecommunication agreed to by both parties, and any notice so given shall be
deemed to be given as of the date of the confirming telecommunication.
14. The terms and conditions of Service Schedule FS-1 and the
General Terms and Conditions are by this reference incorporated into and made
part of this Service Agreement.
15. A waiver by either party of one or more defaults by the other
hereunder shall not operate as a waiver of any future default or defaults,
whether of a like or different character.
16. This agreement may be amended only by an instrument in writing
executed by both parties hereto.
17. Nothing in this agreement shall be deemed to create any rights
or obligations between the parties hereto after the expiration of the term
hereof as same may be extended from time to time except that termination of
this agreement shall not relieve either party of the obligation to correct any
gas volume imbalances or of the obligation to pay any amounts due hereunder.
IN WITNESS WHEREOF the parties hereto have caused this
agreement to be executed as of the day and year first written above.
ALBERTA NATURAL GAS COMPANY LTD
By: V. Mirosh
Name: M. Pfaefflin
Title:____________________________
PACIFIC GAS AND ELECTRIC COMPANY
By: Daniel Thomas
Name: Daniel F. Thomas
Title: Asst. to Sr. Vice Pres. GSBU
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SCHEDULE A
TO THE FIRM SERVICE AGREEMENT
made effective as of 08:00 MST on November 1, 1993, or such later date as is
determined to be the Decontracting Date under the provisions of the
Decontracting Agreement among Alberta and Southern Gas Co. Ltd., Pacific Gas
Transmission Company, Pacific Gas and Electric Company and the decontracting
producers, dated September 22, 1993 Between
ALBERTA NATURAL GAS COMPANY LTD
AND
PACIFIC GAS AND ELECTRIC COMPANY (SHIPPER)
1. Receipt Point: Alberta/British Columbia
Border near Coleman, Alberta
Minimum Pressure Available
4200 kPa
2. Delivery Point: British Columbia/U.S.
international border near
Kingsgate, B.C. Maximum
Pressure Available 5500 kPa
3. Shipper's Haul Distance 170.7 Km
4. Shipper's Compression Utilization 170.7 Km
5. Maximum Day Delivery Quantity (Winter) 16,996.7 10(3)m(3)/d
(Summer) 16,996.7 10(3)m(3)/d
6. Service Availability Date made effective as of 08:00
MST on November 1, 1993, or
such later date as is
determined to be the
Decontracting Date under the
provisions of the
Decontracting Agreement among
Alberta and Southern Gas Co.
Ltd., Pacific Gas
Transmission Company, Pacific
Gas and Electric Company and
the decontracting producers,
dated September 22, 1993
7. Service Termination Date October 31, 2005
8. Surcharge Amount:
For Special Facilities N/A Dollars/Month
For Other N/A Dollars/Month
Total Surcharge N/A Dollars/Month
SHIPPER COMPANY
PACIFIC GAS AND ELECTRIC COMPANY ALBERTA NATURAL GAS COMPANY LTD
Daniel Thomas V. Mirosh
_______________________________ _______________________________
(name) (name)
Asst. to Sr. Vice Pres. GSBU M. Pfaefflin
_______________________________ _______________________________
(name) (name)
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Sheet 20
ALBERTA NATURAL GAS COMPANY LTD
STATEMENT OF
EFFECTIVE RATES AND CHARGES
Firm Service
Demand Rate Commodity Rate
--------------- --------------
($/10(3)m(3)/Km/Mo.) ($/10(3)m(3)/Km)
PIPELINE 0.22434757
COMPRESSOR 0.20273731 0.00138734
Interruptible Service
Commodity Rate
--------------
($/10(3)m(3)/Km)
0.01698862
Company Use Gas and Line Pack Requirements
Shipper's Share of Company use Gas shall be determined pursuant to Article V of
the General Terms and Conditions. Shipper's share of the Line Pack
Requirements shall be determined pursuant to paragraph 9.6 of Article IX of
General Terms and Conditions. In the event that Company provides Shipper's
Share of Company Use Gas and/or Line Pack Requirements, Company shall bill
Shipper for such gas at the rate of:
$ [price to be determined.]
Effective: November 1, 1993
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Sheet 21
RATE CALCULATION METHODOLOGY
INTRODUCTION AND GENERAL
Gas transportation rates charged by Alberta Natural Gas Company Ltd
(ANG) to its shippers are based on a determination of conventional cost of
service including return on a fully depreciated rate base. The costs included
are limited to those incurred in the operation of ANG's gas pipeline system
located in south east British Columbia plus (after October 31, 1993) the
amounts billed to ANG by Foothills Pipe Lines Limited under tariffs approved by
the National Energy Board.
ANG fixes its rates in consultation with its shippers. Such
consultations determine matters such as ANG's deemed capital structure,
appropriate rates for debt interest expense (if no debt actually is in place),
equity return rate, depreciation policy, etc.
To ensure that rates reflect actual ANG costs, an adjustment to the
rates calculation is carried forward from the preceding period each time rates
are recalculated. The adjustment corrects for the difference between revenue
requirements and actual revenue collections for the preceding period. Firm
service rates are based on net costs after deduction of revenues collected from
interruptible shippers.
Rates established from time to time are set out on the Statement of
Effective Rates and Charges, Sheet 20, contained in ANG's Gas Transportation
Service Documents, filed with the National Energy Board and made available to
all ANG shippers and prospective shippers.
Effective: April 1, 1991
8
Sheet 22
SHEETS 22 THROUGH 29
ARE RESERVED FOR
FUTURE REVISIONS TO THIS DOCUMENT
Effective: April 1, 1991
9
Sheet 30
ALBERTA NATURAL GAS COMPANY LTD
SERVICE SCHEDULE FS-1
1. Availability
Service under Service Schedule FS-1 is available to all shippers of gas which
desire transportation service from Company for such gas for delivery for export
from Canada or to markets in Canada, which quality for service hereunder and
which have executed a Service Agreement in the form contained in these Gas
Transportation Service Documents.
The term of the Service Agreement shall be for a minimum of fifteen (15) years
if an expansion of Company's Facilities is required.
2. Applicability and Character of Service
Subject to the terms and conditions applicable to service under this Service
Schedule FS-1, service hereunder shall consist of receipt from Shipper of daily
quantities of gas up to Shipper's Maximum Day Receipt Quantity as specified in
the executed firm transportation Service Agreement between Company and Shipper,
transportation of such quantities through Company's Facilities and delivery of
an amount equivalent to the quantity received less Shipper's share of Company
Use Gas provided by Shipper. Shipper's share of Company Use Gas shall be
provided in accordance with the provisions of Article V of the General Terms
and Conditions.
This transportation service shall be firm and not subject to curtailment or
interruption except as provided in the General Terms and Conditions.
Effective: April 1, 1991
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Sheet 31
3. Charge for Service
Company's charge for service under this Service Schedule shall be determined
using the rates for FS-1 Service contained in the Statement of Effective Rates
and Charges on Sheet 20 of these Gas Transportation Service Documents.
Effective rates for service under this Service Schedule FS-1 shall be set by
Company from time to time. The amount of any interruptible toll revenues
collected by Company shall be credited to Company's cost of service.
Company's billing to each Shipper each month shall be the total of the amounts
described under sub-paragraphs 3.1, 3.2, 3.3, 3.4, 3.5, 3.6 and 3.7 for that
Shipper determined as follows:
3.1 Shipper's Monthly Demand Charge
Shipper's monthly demand charge shall be the product of:
(a) Shipper's Maximum Day Delivery Quantity as indicated on
Schedule A to Shipper's Service Agreement;
(b) Shipper's Haul Distance as indicated on Schedule A to
Shipper's Service Agreement; and
(c) the Demand Rate currently in effect for Service Schedule FS-1
from Company's Statement of Effective Rates and Charges, Sheet
20 of these Gas Transportation Service Documents.
3.2 Shipper's Commodity Charge
Shipper's commodity charge for the month shall be the product of:
(a) the quantity of gas delivered by Company to Shipper at the
Delivery Point during such month;
Effective: April 1, 1991
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Sheet 32
(b) Shipper's Haul Distance from Schedule A to Shipper's Service
Agreement; and
(c) the Commodity Rate currently in effect for firm service from
Company's Statement of Effective Rates and Charges, Sheet 20
of these Gas Transportation Service Documents.
3.3 Charge for Company Use Gas
If Shipper elects not to provide Shipper's share of Company Use Gas in kind and
such gas is provided by Company, then the charge to Shipper for such gas for
any month shall be the product of:
(a) Shipper's share of Company Use Gas determined pursuant to
paragraph 5.1 of the General Terms and Conditions for such
month; and
(b) the rate charged by Company for such gas set out on Company's
Statement of Effective Rates and Charges, Sheet 20 of these
Gas Transportation Service Documents.
3.4 Surcharge
Shippers surcharge amount, if any, shall be an amount to recognize the recovery
of costs associated with special facilities installed by Company for Shipper
agreed to between Company and Shipper expressed in dollars per month. Such
amount shall be entered on Schedule A to Shipper's Service Agreement.
Effective: April 1, 1991
12
Sheet 33
3.5 Charge for Over-Run Gas
In the event that Company determines that Shipper has tendered for
transportation, and Company has transported for Shipper under this Service
Schedule on any day during a billing month, a volume of gas at the Delivery
Point in excess of Shipper's Maximum Day Delivery Quantity in effect on such
day, Shipper shall pay to Company an amount equal to the product of such excess
for such day and the Tier 1 commodity rate for service under Service Schedule
IS-1, provided that Shipper shall not be required to pay any charge for make-up
quantities delivered by Company pursuant to paragraph 4 of this Service
Schedule FS-1 or for excess deliveries on any day which are less than two
percent (2%) of Shipper's Maximum Day Delivery Quantity.
3.6 Demand Charge Credit
(a) Subject to paragraph 3.6(b), if in any month Company is unable
to deliver up to ninety eight percent (98%) of the quantity of
gas that Shipper has in good faith nominated up to the Maximum
Day Delivery Quantity times the number of days in such month,
then in respect of such month, a credit shall be applied to
the monthly bill rendered by Company determined according to
the following formula:
Shippers Shipper's
credit = Demand x Haul x Maximum Day - Avg. Day Del.
Rate Distance Delivery Quantity
Where: Avg. Day Del. = Deliveries to Shipper in such month divided by the
number of days in such month.
Effective: April 1, 1991
13
Sheet 34
(b) No credit to the monthly bill shall be made if Company
delivers less than ninety eight percent (98%) of the volume of
gas nominated as a result of planned maintenance on Company's
Facilities or as a result of Shipper being unable to deliver
gas at the Receipt Point or accept gas at the Delivery Point.
3.7 Charge for Company's Line Pack Requirements
If Shipper elects not to provide Shipper's Share of Company's Line Pack
Requirements in kind and such gas is provided by Company, then the charge to
shipper for such gas shall be the product of:
(a) Shipper's Share of Company's Line Pack Requirements; and
(b) the rate charged by Company for line pack set out on Company's
Statement of Effective Rates and Charges, Sheet 20 of the Gas
Transportation Service Documents.
4. Make-Up Provision
In the event that Company fails on any day to deliver to Shipper at the
Delivery Point the quantity of gas nominated by Shipper and available at the
Receipt Point, up to Shipper's Maximum Day Delivery Quantity, Shipper shall be
entitled, subject to paragraph 11.2 of Article XI of the General Terms and
Conditions and within two years of such failure, to have Company transport
volumes of gas in excess of Shipper's Maximum Day Delivery Quantity at no
additional demand charge sufficient to cancel such deficiency. Demand charges
credited to Shipper under paragraph 3.6 shall be recovered by Company
respecting volumes delivered by Company under this paragraph 4.
Effective: April 1, 1991
14
Sheet 35
5. Company Use Gas
Shipper's share of Company Use Gas shall be furnished by Shipper to Company
each day, or paid for by Shipper, pursuant to Article V of the General Terms
and Conditions.
6. Backhauls
Company may provide backhaul service under this Service Schedule where such
service is requested and provided that, in Company's judgement, it is practical
to provide such service considering the capacity of Company's Facilities and
throughput volumes. Company's charge for backhaul service shall be as
determined under paragraph 3. above. Company shall not require that Shipper
provide a share of Company Use Gas respecting backhaul service.
7. Assurances and Information
Shipper shall provide such assurances and information as Company may reasonably
require respecting any service to be provided pursuant to this Service Schedule
including, without limiting the generality of the foregoing, an assurance that
all necessary arrangements have been made among Shipper, sellers of gas to
Shipper, purchasers of gas from Shipper, and transporters of Shipper's gas to,
and from, Company's Facilities.
8. Relief
If Shipper requests relief from its obligation to pay all or any portion of its
charges under this Service Schedule which are based on Shipper's Maximum Day
Delivery Quantity, Shipper shall notify Company of its request for relief.
Company may, at its option, elect to attempt to find another Person who
qualifies for service under this Service Schedule and who is willing to assume
the Maximum Day Delivery Quantity, or a portion thereof, which Shipper proposes
to make available, although Company assumes no obligation to find such a
Person. If Company so elects to attempt to find such a Person, it shall first
have regard to the queue for firm service established in accordance with its
Queuing Procedures. If Company finds such a Person, then Company may grant
relief to Shipper, to the extent requested, by reducing Shipper's Maximum Day
Delivery Quantity by the amount specified in a Service Agreement executed by
Company and such Person.
Effective: April 1, 1991
15
Sheet 36
9. Renewal
This Service Agreement, as amended from time to time, and any renewal thereof,
shall be automatically renewed subject to Article XV of the General Terms and
Conditions for a one year term (or such longer term as is agreed upon by
Company and Shipper) for the Maximum Day Delivery Quantity in effect
immediately prior to renewal ()or such lesser volume as is agreed upon by
Company and Shipper not less than twelve months prior to the date when the
Service Agreement would otherwise terminate), unless:
(a) Shipper notifies Company of its intention to terminate the
Service Agreement not less than twelve months before the
termination date which would otherwise prevail pursuant to the
Service Agreement or any renewal thereof; or
(b) Shipper is in default under the Service Agreement.
Any renewal of this Service Agreement shall be subject to the terms and
conditions of Company's Gas Transportation Service Documents then in effect.
Effective: April 1, 1991
16
Sheet 37
10. General Terms and Conditions
All of the General Terms and Conditions, including the definitions contained
therein, are applicable to this Service Schedule unless otherwise indicated in
the Service Agreement executed between Company and Shipper.
Effective: April 1, 1991
17
Sheet 38
SHEETS 38 THROUGH 39
ARE RESERVED FOR
FUTURE REVISIONS TO THIS DOCUMENT
Effective: April 1, 1991
18
ALBERTA NATURAL GAS COMPANY LTD
Sheet 70
GENERAL TERMS AND CONDITIONS
TABLE OF CONTENTS
Article Sheet No.
- ------- --------
I DEFINITIONS 71
II QUALITY OF GAS 76
III MEASUREMENT 78
IV MEASURING INSPECTION 81
V COMPANY USE GAS 83
VI BILLING AND PAYMENT 84
VII POSSESSION OF GAS AND RESPONSIBILITY 87
VIII WARRANTY OF ELIGIBILITY FOR TRANSPORTATION 88
IX OPERATING PROVISIONS 89
X RECEIPT AND DELIVERY POINT AND GAS PRESSURES 92
XI SERVICE PRIORITIES, INTERRUPTION AND CURTAILMENT 93
XII DELIVERY OBLIGATION 95
XIII FORCE MAJEURE 96
XIV INDEMNIFICATION 98
XV FINANCIAL INFORMATION AND SECURITY 100
XVI MISCELLANEOUS PROVISIONS 101
Effective: April 1, 1991
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Sheet 71
Article I
GENERAL TERMS AND CONDITIONS
1.0 Definitions
Except where the content expressly states otherwise the following
terms and abbreviations, when used in these General Terms and Conditions, the
Service Schedules and the Service Agreements, shall be construed to have the
following meanings:
The terms "Commodity Rate" shall mean the rate entered on Company's
current Statement of Effective Rates and Charges under the heading Commodity
Rate.
The term "Company" shall mean Alberta Natural Gas Company Ltd.
The term "Company's Facilities" shall mean all pipeline, compressor,
metering and other facilities which of any kind are used by Company to provide
transportation service to shippers. Such facilities may be owned by Company or
may be owned by others and used by Company pursuant to an agreement between
Company and such other owners under which Company receives transportation
service.
The term "Company's Line Pack Requirements" shall mean the quantity of
line pack which Company determines from time to time to be required by the
Company when Company's Facilities are at normal operating pressures.
Effective: April 1, 1991
20
Sheet 72
The term "Company Use Gas" shall mean all gas used by Company for
compressor station and other fuel, gas blown down from Company's Facilities,
gas lost, gas used for purging and other construction uses, unaccounted for gas
and the variation from time to time in Company's line pack.
The term "Contract year" shall mean a twelve month period, beginning
on any November 1st, which falls within the contract term.
The term "Cubic Metre" shall mean that quantity of gas, which at a
temperature of fifteen (15 degrees) degrees Celsius and at an absolute pressure
of one hundred one and three hundred twenty-five thousandths kilopascals
(101.325 kPa) occupies one cubic metre.
The term "Day" shall mean a period of twenty-four (24) consecutive
hours, beginning and ending at 7:00 o'clock a.m. Pacific Standard time.
The term "Delivery Point" shall mean the point set out in Schedule A
to Shipper's Service Agreement under Delivery Point, at which Company delivers
Shipper's gas to Shipper following transportation through Company's Facilities.
The term "Demand Rate" shall mean the rate entered on Company's
current Statement of Effective Rates and Charges under the heading Demand Rate.
The term "Founding Shippers" shall mean Alberta and Southern Gas Co.
Ltd., Westcoast Energy Inc., and Foothills Pipe Lines (South B.C.) Ltd.
Effective: April 1, 1991
21
Sheet 73
The term "Gas transportation Service Documents" shall mean this Gas
Transportation Service Document including these General Terms and Conditions,
the Queuing Procedure, the Statement of Effective Rates and Charges and the
Service Schedules.
The term "GJ" shall mean gigajoule.
The term "Gross Heating Value" shall mean the number of MJ obtainable
from the combustion, at constant pressure, of one cubic metre of gas at a
temperature of fifteen degrees (15 degrees) Celsius, free of all water vapor,
and at an absolute pressure of one hundred and one hundred one and three hundred
twenty-five thousandths (101.325) kPa, with the products of combustion cooled
to the initial temperature of the gas and all water formed by the combustion
reaction condensed to the liquid state.
The term "kPa" shall mean kilopascal.
The term "Maximum Day Delivery Quantity" shall mean the maximum volume
of gas which Company is obligated to transport and redeliver to Shipper at the
Delivery Point on any day.
The term "Maximum Day Receipt Quantity" shall mean the volume of gas
which Company must receive from Shipper at the Receipt Point on any day in
order to deliver the Maximum Day Delivery Quantity, after taking account of
Shipper's share of Company Use Gas provided by Shipper.
The term "MJ" shall mean megajoule.
The term "Month" shall mean a period extending from the beginning of
the first Day in a calendar month to the beginning of the first Day in the next
succeeding calendar month.
Effective: April 1, 1991
22
Sheet 74
The term "Nomination" shall mean Shipper's notice to Company
respecting the volumes of gas which Shipper wishes Company to receive and
deliver for shipper.
The term "Nomination Form" shall mean the form provided, or agreed to,
by Company on which Shipper provides its Nominations to Company.
The term "Person" shall mean any party except the parties to any
Service Agreement.
The term "Receipt Point" shall mean the point set out in Schedule A to
Shipper's Service Agreement under Receipt Point at which Company receives gas
from shipper for transportation in Company's Facilities.
The term "Service Agreement" shall mean an agreement between Shipper
and Company in the form contained in these Gas Transportation Service Documents
for the service requested by Shipper.
The term "Service Availability Date" shall mean the later of the
Service Availability Date on Schedule A to Shipper's Service Agreement executed
by Shipper and Company, or, the date on which Company's Facilities are capacity
of providing service under Shipper's Service Agreement.
The term "Service Termination Date" shall mean the Requested Service
Termination Date on Schedule A to Shipper's Service Agreement executed by
Shipper and Company.
Effective: April 1, 1991
23
Sheet 75
The term "Shipper" shall mean any shipper of gas receiving
transportation service from Company pursuant to a Service Agreement executed
with Company.
The term "Shipper's Haul Distance" shall mean the distance through
which shipper's gas is moved in Company's Facilities as shown on Schedule A to
any Shipper's Service Agreement.
The term "Shipper's Share of Company's Line Pack Requirements" shall
mean that quantity of Company's Line Pack Requirements determined as the
proportion that the product of Shipper's Maximum Day Delivery Quantity and
shipper's Haul Distance bears to the sum of the products of all shippers'
Maximum Day Delivery Quantity and haul distances.
The term "Summer" shall mean the six-month period April 1st to
September 30th in any year.
The term "Winter" shall mean the six-month period from October 1st in
any year to March 31st in the following year.
The term "10(3)m(3)" shall mean one thousand (1,000) cubic metres of
gas as determined on the measurement basis set forth in Article III hereof.
Effective: April 1, 1991
24
Sheet 76
Article II
QUALITY OF GAS
2.1 The following specifications shall apply to the gas which
Shipper delivers or causes to be delivered to Company for transportation at the
Receipt Point.
(a) The gas shall be commercially free from sand, dust, gums,
crude oil, impurities or other objectionable substances in
quantities which may render it unmerchantable and which may be
injurious to Company's Facilities or may interfere with the
transmission, measurement or commercial utilization of gas.
(b) The gas shall not, unless otherwise agreed upon, have a
hydrocarbon dew point in excess of minus ten (-10) degrees
Celsius at operating pressure.
(c) The gas shall not contain more than twenty three (23)
milligrams of hydrogen sulphide per one Cubic Metre of gas.
(d) The gas shall not contain more than two hundred and thirty
(230) milligrams of total sulphur per one Cubic Metre of gas.
(e) The gas shall not contain more than two percent (2%) by volume
of carbon dioxide, unless otherwise agreed upon.
(f) The gas shall not contain more than sixty five (65) milligrams
of water vapour per one Cubic Metre of gas.
(g) The gas shall not exceed 43.3 degrees C in temperature at the
Receipt Point.
(h) The gas shall be as free of oxygen as it can be kept through
the exercise of all reasonable precautions and shall not in
any event contain more than four-tenths of one percent (0.4%)
by volume of oxygen.
Effective: April 1, 1991
25
Sheet 77
2.2 The gas Company delivers to Shipper or for Shipper's account
shall have the constituent parts that result from the commingling of the gas
from various sources on Company's pipeline.
2.3 The gas shall have a Gross Heating Value not less than thirty
six point nine four (36.94) megajoules per Cubic Metre of gas; provided
however, that Company may at its sole discretion permit gas of lower gross
heating value to be tendered to Company at the Receipt Point.
2.4 (a) If the gas tendered for transportation shall fail at any time
to conform to any of the specifications set forth in this
Section 2, then Company shall notify Shipper of such
deficiency and may, at its option, refuse to accept such gas
pending the remedying such failure to conform to quality
specifications. If the deficiency in quality is not promptly
remedied, Company may accept such gas and may make changes
necessary to bring such gas into conformity with such quality
specifications and Company shall include all reasonable
expenses incurred by it in effecting such changes in Shipper's
monthly bill.
(b) Notwithstanding subsection 2.4(a) above, Company shall have
the right to discontinue receipt of gas from Shipper without
notice should the gas fail to meet the specification set forth
in subparagraphs (a), (b), (c), (d), (f), or (g) of subsection
2.1 hereof. Provided, however, that any such suspension shall
not relieve Shipper from any obligation to pay its demand
charge, or any other charge payable to Company.
2.5 Company shall establish reasonable methods and procedures,
including instrumentation, for making tests to determine whether gas tendered
by Shipper to Company for transportation or delivered by Company to Shipper
meet the specifications set forth in this Section 2.
Effective: April 1, 1991
26
Sheet 78
Article III
MEASUREMENT
3.1 Company shall cause to be furnished, installed, maintained and
operated at each Receipt and Delivery Point all equipment, necessary to
determine gas volume and energy as well as pressure, temperature, gross heating
value, quality, relative density and super-compressibility.
3.2 Company will establish necessary metering, dispatch and
operating procedures to provide information required by Company, Shipper or
other affected parties.
3.3 The gas shall be metered by custody transfer type apparatus
acceptable to the parties and to Consumer and Corporate Affairs Canada. All
measuring equipment, devices and material required shall be compatible with the
quantities to be metered at the particular point, and shall be of a type
approved for their intended use under the provisions of the Electricity and Gas
Inspection Act being Chapter E-4 of the Revised Statues of Canada, 1985 as
amended (hereinafter referred to as GIA), where such approvals are applicable.
3.4 At each Shipper's Receipt Point, and Delivery Point, Shipper,
at its own expense, may cause to be furnished, installed, maintained and
operated check measuring equipment, provided that such equipment does not
interfere with the operations of the measuring equipment installed or caused to
be installed by Company and the transportation of gas hereunder. All
non-company measuring equipment, devices and material installed in Company
Facilities shall be compatible with the quantities to be metered at the
particular point, and shall be of a type approved for their intended use under
the provisions of GIA where such approvals are applicable.
Effective: April 1, 1991
27
Sheet 79
3.5 The unit of volume for purposes of measurement shall be one
thousand cubic metres (10(3)m(3)).
3.6 All measurements, calculations and procedures used in
determining the volume delivered at any point shall be in accordance with GIA
and all applicable regulations issued pursuant thereto. Provided, however,
that correction for deviations from Boyle's Law shall be determined from data
contained in the "American Gas Association Manual for the Determination of
Super Compressibility Factors for Natural Gas, AGA No. 8" or "Par Research
Project NX-19" as published by the American Gas Association in 1962, or any
subsequent revision thereof acceptable to Company and Shipper.
3.7 For the purposes of measurement the atmospheric pressure at
any Receipt Point or Delivery Point shall be fixed by agreement between Shipper
and Company and by a method that meets the requirements of the GIA.
3.8 The gas characteristics, including gross heating value,
relative density, and nitrogen and carbon dioxide content of the gas tendered
by Shipper to Company for transportation at the Receipt Point or delivered by
Company at the Delivery Point shall be determined, where applicable, by
recording equipment approved for this use under the provisions of the GIA.
The gas characteristics used in computing gas measurement
shall be:
(a) The actual "real time" value determined when continuous
analyzing equipment supplies live data of the gas
characteristics to the real time measurement computer
equipment; or
(b) the arithmetical average recorded each day or part thereof if
continuous recording equipment is otherwise used; or
Effective: April 1, 1991
28
Sheet 80
(c) where sampling is utilized, determinations available from
analyses of such samples.
3.9 The parties hereto shall preserve all original test data and
records, including where applicable charts, in such party's possession for a
period compatible with record retention rules of any governmental agencies
having jurisdiction thereover, except that the parties hereto agree that such
records shall be retained for a minimum period of six (6) years.
Effective: April 1, 1991
29
Sheet 81
Article IV
MEASURING INSPECTION
4.1 The accuracy of Company's measuring equipment shall be
verified at monthly intervals or at such larger intervals as the Company and
the Shippers may agree. Advance notice of the time and nature of each test
shall be given to allow shipper a reasonable amount of time to arrange for a
representative to observe the test and any adjustments resulting from such
tests. If, after notice, Shipper fails to have a representative present, the
results of the test shall nevertheless be considered accurate until the next
test.
4.2 If, as a result of any such tests any of the measuring
equipment is found to be out of service or registering inaccurately in
comparison to Company's calibration equipment, it shall be adjusted at once to
read as accurately as possible. If such equipment is out of service or
inaccurate such that it causes a measurement error or an energy basis of less
than one-half of one percent, a correction may be made at Company's option. If
such measurement error is greater than or equal to one-half of one percent as
aforesaid, then the previous readings of such equipment shall be corrected to
zero error for a period agreed upon, or if not as agreed upon, for a period of
one-half (1/2) of the elapsed time since the last test. The volume of gas
delivered during such period shall be determined by Company using one of the
following four (4) methods, which in the opinion of the Company will provide
the most accurate results:
(a) by using the data recorded by any check measuring equipment if
installed and accurately registering; or
Effective: April 1, 1991
30
Sheet 82
(b) by correcting the error if ascertainable by calibration test
or mathematical calculation; or
(c) by estimating the quantity delivered based upon deliveries
under similar conditions during a period when the equipment
was registering accurately; or
(d) by calculation of the balance between Company's receipts and
deliveries over the period.
4.3 If Shipper requests a special test of accuracy of any
measuring equipment and upon testing the equipment the inaccuracy of the
equipment is found to be less than one (1) percent, Shipper shall bear the
expense of such special test.
4.4 Shipper or Shipper's agent shall have the right to inspect, at
Shipper's expense, Company furnished or installed measuring equipment and other
Company measurement or test data including, where applicable, charts at all
times during normal business hours, but the reading, calibration and adjustment
of such equipment and, where applicable, the changing of charts shall be done
only by Company or Company's agent.
4.5 The parties hereto shall exchange, upon request of either
party, copies of all measuring and testing data and information including,
where applicable, charts as soon as practicable for any such requests.
Effective: April 1, 1991
31
Sheet 83
Article V
COMPANY USE GAS
5.1 Shipper's share of Company Use Gas shall be provided by
Shipper in kind, or by Company pursuant to paragraph 5.3 of this Article V.
Shipper's share of Company Use Gas on any day shall be the total Company Use
Gas for the month in which such day falls divided by the days in such month,
multiplied by Shipper's volume delivered by Company on such day and by
Shipper's Haul Distance, and divided by the sum of the products of all
shippers' volumes delivered by Company on such day and such shippers' Haul
Distances.
5.2 Shipper shall have the right, exercisable by notice to Company
at least 60 days prior to the Service Availability Date to supply in kind its
share of Company Use Gas. This election shall apply to each subsequent
Contract Year unless the Shipper provides the Company with notice to the
contrary at least 60 days prior to the start of any subsequent Contract Year.
5.3 If Shipper elects not to exercise its right to supply
Shipper's share of Company Use Gas, Company may, at its option, either:
(a) supply Shipper's share of Company Use Gas and bill Shipper for
the quantity supplied at the price set out in paragraph 5.4 of
this Article V, or
(b) take Shipper's share in kind from the volumes transported by
Company for Shipper.
5.4 In the event that Company provides Shipper's share of Company
Use Gas the price to be charged Shipper by Company for such gas volumes shall
be the price set out in Company's currently effective Statement of Effective
Rates and Charges.
Effective: April 1, 1991
32
Sheet 84
Article VI
BILLING AND PAYMENT
6.1 On or before the twentieth (20th) day of a month, beginning
with the twentieth (20th) day of the month immediately following the month in
which the Service Availability Date occurs, Company shall render a bill to
Shipper for the prior month. When information necessary for billing by Company
is in control of Shipper, Shipper shall furnish such information to Company on
or before the fifth (5th) day of the month in connection with services rendered
during the prior month.
6.2 Shipper shall make payment of such bill to Company on or
before the last day of such month.
6.3 If presentation of a bill by Company is delayed after the
twentieth (20th) day of the month, then the time for payment shall be extended
correspondingly, unless Shipper is responsible for such delay.
6.4 Interest on Unpaid Amounts
Except where presentation of the bill is delayed under
paragraph 6.3 or as provided under paragraph 6.5, Company shall have the right
to charge interest on the unpaid portion of any bill commencing with the date
payment was due and continuing until the date payment is actually made. The
initial rate of interest to be charged by Company shall be the rate of interest
which is (2%) percent over and above the Prime Rate quoted by the Royal Bank of
Canada on the first day of the quarter during which such unpaid portion of the
bill becomes due. The first day of the quarter during each year shall be
deemed to be the first day of January, April, July and October, as the case may
be. The rate of interest in effect during a prior quarter, with respect
Effective: April 1, 1991
33
Sheet 85
to any amounts owning in such prior quarter which remain outstanding in the
following quarter, shall be adjusted effective the first day of the following
quarter to the interest rate which is two (2%) percent over and above the Prime
Rate in effect on the first day of such following quarter.
6.5 Adjustment Where Bill Estimated
Information used for billing may be actual or estimated. If
actual information necessary for billing is unavailable to Company sufficiently
in advance of the twentieth (20th) day of the month to permit the use of such
information in the preparation of a bill, Company shall use reasonably
estimated information. In the month that actual information becomes available
respecting a previous month where estimated information was used, the bill for
the month in which the information became available shall be adjusted to
reflect the difference between the actual and estimated information. Neither
Company nor Shipper shall be entitled to interest on any adjustment.
6.6 Adjustment of Underpayment, Overpayment or Error in Billing
(a) In the event that an error is discovered in any bill rendered
by Company to Shipper for transportation services on Company's
Facilities, the amount of such error shall be adjusted,
provided that claim therefore shall have been made within
twelve (12) months from the date such bill was rendered. The
adjustment shall be made within thirty (30) days of such
timely claim.
(b) In the event that an overpayment has been made, Company shall
make reimbursement of such overpayment. Shipper shall be
entitled to interest on the amount of such overpayment from
the time such overcharge was paid to the date of
reimbursement. The initial rate of interest shall be
determined as set forth in paragraph 6.4 of this Article VI
and shall be revised with respect to any subsequent quarter
prior to adjustment of error, in the manner set forth for
revision of such initial rate in such paragraph 6.4
Effective: April 1, 1991
34
Sheet 86
(c) In the event of an undercharge, Shipper shall pay the amount
of any such undercharge to Company but without interest. Such
amount shall be payable on the same terms and conditions as
all amounts payable by Shipper to Company.
6.7 In the event Shipper disputes in good faith any part of a
monthly bill, Shipper shall nevertheless pay to Company the full amount of the
bill within the time such payment is due together with a statement of and
explanation respecting the amount so disputed. Company shall segregate that
portion of the payment in dispute from its general funds by placing such
portion in a separate account to be held in trust by Company pending resolution
of the dispute.
6.8 In the event Shipper fails to pay the full amount of any bill
within (30) days after payment is due, Company, in addition to any other remedy
it may have, may suspend receipt and delivery of gas until full payment is
made. Such suspension shall not relieve Shipper from any obligation to pay any
charge payable hereunder to Company.
If Shipper's failure to pay the full amount outstanding in
respect of any month bill shall continue after such suspension, Company may,
in addition to any other remedy Company may have, terminate Shipper's Service
Agreement effective on the date of the delivery of written notice by the
Company to Shipper of such termination.
Effective: April 1, 1991
35
Sheet 87
Article VII
POSSESSION OF GAS AND RESPONSIBILITY
7.1 Gas received by Company for Shipper for transporting shall be
deemed to be in the custody and under the control of Company from the time such
gas is accepted for transportation at the Receipt Point until delivered by
Company to Shipper at the Delivery Point.
7.2 As between Shipper and Company, Company shall be responsible
for all gas received from Shipper between the time such gas is received by it
from Shipper at the Receipt Point until the time gas is delivered to Shipper by
Company at the Delivery Point, and at no other time.
Effective: April 1, 1991
36
Sheet 88
Article VIII
WARRANTY OF ELIGIBILITY FOR TRANSPORTATION
8.1 Shipper shall provide such assurances and information as
Company may reasonably require respecting any service to be provided by Shipper
including, without limiting the generality of the foregoing, an assurance that
all necessary arrangements have been made among Shipper, sellers of gas to
Shipper, purchasers of gas from Shipper and transporters of Shipper's gas to,
and from Company's Facilities.
Effective: April 1, 1991
37
Sheet 89
Article IX
OPERATING PROVISIONS
9.1 Shipper shall advise Company, at the times noted under (a),
and (b) below of the gas volumes which it contemplates delivering to Company
for transportation. Such advice, hereinafter called Nomination, shall be
transmitted to Company on a completed Nomination form transmitted
electronically, by personal delivery, or by mail.
(a) For the purpose of scheduling commencement of initial
transportation service, Shippers Nomination must be received
by Company five (5) business days prior to the day on which
Shipper desires service to commence, or such lesser period of
time agreed to by Company.
(b) For the purpose of scheduling any change in transportation
volumes during a month, Company must receive Shipper's
Nomination indicating amendments to transportation volumes and
their effective dates no later than 12:00 noon Pacific time on
the day prior to the first date of delivery of volumes
provided for in such nomination.
9.2 All Nominations received by Company shall remain in effect,
whether or not deliveries are made, until an amended Nomination is received by
Company pursuant to paragraph 9.1.
9.3 Not less than three (3) months prior to the commencement of
Shipper's first and each subsequent Contract year, Shipper shall furnish to
Company, on Company's request, estimates of Shipper's monthly requirements for
gas deliveries for such Contract Year and estimates of Shipper's annual
requirements for deliveries for each of the following two (2) Contact years.
Such estimates shall not effect Shipper's right to have its Maximum Day
Delivery Quantity transported hereunder.
Effective: April 1, 1991
38
Sheet 90
9.4 All Nominations shall be delivered to:
Alberta Natural Gas Company Ltd.
#2900, 240 Fourth Avenue S.W.
Calgary, Alberta, Canada
T2P 4L7
Phone: (403) 691-7818
Fax: (403) 691-7817
9.5 In the event that Company determines that it has delivered
more or less gas to Shipper at the Delivery Point, than it has received from
Shipper at the Receipt Point, Company shall advise Shipper of such discrepancy.
Company shall thereafter have the right to adjust receipts or deliveries or
both until such discrepancy is resolved. Company shall not adjust receipts to
cancel excess deliveries for which Shipper has paid a charge pursuant to
paragraph 3.5 of Service Schedule FS-1.
9.6 (a) Shipper's Share of Company's Line Pack Requirements shall be
provided by Shipper in kind or by Company pursuant to
paragraph 9.6 (c) of this Article IX.
(b) Shipper shall have the right exercisable by notice to Company
at least 60 days prior to the Service Availability Date to
supply in kind Shipper's Share of Company Line Pack
Requirements. This election shall apply to each subsequent
Contract year unless the Shipper provides the Company with
notice to the contrary at lest 60 days prior to the start of
any subsequent Contract Year.
Effective: April 1, 1991
39
Sheet 91
(c) If Shipper elects not to exercise its right to supply
Shipper's Share of Company's Line Pack Requirements, Company
may purchase such quantity of line pack from Shipper, or if
Company can purchase line pack at a price lower than the price
quoted by Shipper, Company may purchase Shipper's share from
the lower priced source.
(d) Company's investment in line pack shall be added to Company's
rate base but Company shall not depreciate such investment.
(e) Variations from day to day in Company's Line Pack Requirements
shall be taken from, or delivered to, shippers pursuant to
Article V of this General Terms and Conditions.
9.7 Company will, at the request of Shipper and subject to
operational constraints on the Company's Facilities, divert the volume of gas
Shipper is authorized to receive on any day under an FS-1 Service Agreement to
a point which is upstream of the Delivery Point, provided that Shipper will pay
to Company the same monthly demand charge which would have been otherwise
payable had such diversion not occurred.
Effective: April 1, 1991
40
Sheet 92
Article X
RECEIPT AND DELIVERY POINT GAS PRESSURES
10.1 Shipper shall deliver the gas to Company at the Receipt Point
at 4200 kPa, or, with Company's agreement, at such pressure as will enable the
gas to enter Company's Facilities, but in no event shall Shipper be required to
deliver the gas at a pressure greater than 5826 kPa.
10.2 Shipper recognizes that Company will be transporting the gas
in a commingled stream to the Delivery Point and that the pressure of the gas
delivered at the Delivery Point will be the pressure of such commingled stream;
provided that Company shall deliver the gas to shipper at the Delivery Point at
a pressure not less than 5500 kPa.
Effective: April 1, 1991
41
Sheet 93
Article XI
SERVICE PRIORITIES, INTERRUPTION AND CURTAILMENT
11.1 All firm service shippers who are receiving transportation
service shall have equal priorities of service. In the event that Company's
pipeline capacity is constrained by the need to effect any repairs,
maintenance, replacement or upgrading or other work related to Company's
Facilities, or for any other reason such that all firm service volumes cannot
be delivered, Company shall first interrupt all deliveries under interruptible
service agreements and shall then act to maximize its total deliveries under
firm service agreements. If curtailments continue to be required, Company
shall curtail all firm service deliveries pro rata with the Maximum Day
Delivery Quantity of each shipper.
11.2 If capacity remains in Company's Facilities after first
meeting all firm service nominations, Company shall transport gas requested
by shippers pursuant to paragraph 4 Make-Up Provision, of Service Schedule
FS-1. If additional capacity remains, Company shall transport gas under
interruptible service agreements. Interruptible volumes shall be transported
on a priority ranking as described in Service Schedule IS-1.
11.3 Company may interrupt, curtail or reduce service for such
periods of times as it may reasonably require for the purpose of effecting any
repairs, maintenance, replacement or other upgrading, or other work related to
Company's Facilities. Company shall give firm shippers at least three (3) days
notice of such interruptions or curtailments or, in the event of unforeseen
circumstances, such shorter notice as it is reasonably possible for Company to
give. Company shall consult annually with shippers respecting the scheduling
of major maintenance programs.
Effective: April 1, 1991
42
Sheet 94
11.4 Shipper and Company shall give each other as much notice as is
reasonably possible in the circumstances of unexpected temporary changes in the
rates of delivery or receipt of gas, pressures or any other operating
conditions, together with the expected duration and the reason for such
expected temporary changes.
11.5 Shipper acknowledges and agrees with Company that any
interruption or curtailment shall not suspend or relieve Shipper from the
obligation to pay any demand charge, surcharge, or any other amount payable to
Company, except as provided in paragraph 3.6 of Service Schedule FS-1.
Effective: April 1, 1991
43
Sheet 95
Article XII
DELIVERY OBLIGATION
12.1 Company's delivery obligation for any period where Shipper has
exercised its right as provided in paragraph 5.2 shall be to deliver to Shipper
at Shipper's Delivery Point, the volume of gas which has the aggregate energy
content of gas received from Shipper in such period at Shipper's Receipt Point,
less Shipper's share of Company Use Gas as determined under paragraph 5.1.
Company's delivery obligation for any period where Company has exercised its
option to supply Shipper's share of Company's requirements as provided for in
paragraph 5.3 (a), shall be to deliver to Shipper at Shipper's Delivery Point
the volume of gas which has the aggregate energy content of gas received from
Shipper in such period at Shipper's Receipt Point.
12.2 Gas delivered by Company to Shipper at Shipper's Delivery
Point shall have the heating value and the quality that results from the gas
having been transported and commingled with gas belonging to others in
Company's Facilities.
12.3 All deliveries of gas to Company at a Receipt Point shall be
made in uniform hourly quantities to the extent practicable.
Effective: April 1, 1991
44
Sheet 96
Article XIII
FORCE MAJEURE
13.1 As utilized herein, force majeure shall mean any act of God,
strikes, lockouts, or other industrial disturbances, acts of the Queen's
enemies, sabotage, wars, blockades, insurrections, riots, epidemics,
landslides, lightning, earthquakes, floods, storms, fires, washouts, arrests
and restraints of rulers and peoples, civil disturbances, explosions,
breakages, or accidents to machinery or pipelines, hydrate obstructions of
pipelines or appurtenances thereto, inability to obtain materials or equipment,
inability to obtain permits, orders, licenses, certificates or other
authorizations; orders of any court, board or governmental authority having
jurisdiction, any claim by any third party that any covenant or obligation of
such third party is suspended by reason of force majeure, including without
limiting the generality of the foregoing any such claim by any transporter of
gas to, from or for Company or Shipper; or any other cause, whether of the kind
therein enumerated or otherwise not within the control of the applicable party
or that shall be occasioned by the necessity of making repairs to or
reconditioning machinery, equipment or pipeline facilities not resulting from
the default or negligence of such party and which by the exercise of due
diligence such party is unable to prevent or overcome.
13.2 If either party fails to perform any obligations imposed by
this Agreement and such failure shall be caused or materially contributed to by
any occurrence of force majeure such failure shall be deemed not to be a breach
of the obligation of such party, but such party shall use reasonable diligence
to put itself in a position to carry out its obligations. Provided, however,
that the settlement of strikes or lockouts shall be entirely within the
discretion of each party, and that the above requirement that any force majeure
shall be remedied with the exercise of due diligence shall not require the
settlement of strikes or lockouts by acceding to the demands of the opposing
party when such course is inadvisable in the discretion of the appropriate
party.
Effective: April 1, 1991
45
Sheet 97
13.3 Notwithstanding any other provision herein, no cause
affecting the performance of obligations by any party:
(a) shall relieve any party from its obligations to make payment,
except as provided in paragraph 3.6 of Service Schedule FS-1,
of amounts pursuant to Shipper's Service Agreement;
(b) shall relieve any party from any other obligation unless such
party shall give notice of such cause in writing to the other
party with reasonable promptness and like notice shall be
given upon termination of such cause, nor shall such cause
continue to relieve such party from such other obligation
after the expiration of a reasonable period of item within
which, by the use of due diligence, such party could have
remedied the situation.
13.4 Notwithstanding any other provision herein, Company and
Shipper agree that a lack of funds or other financial cause shall not under any
circumstances be an event of force majeure.
13.5 In the event that the provision of service is curtailed or
interrupted by reason of force majeure Company shall, during the continuance of
such force majeure, curtail or interrupt service in accordance with Article XI
hereof.
Effective: April 1, 1991
46
Sheet 98
Article XIV
INDEMNIFICATION
14.1 Shipper shall be liable for and shall indemnify and save
harmless Company from and against any and all claims, demands, suits, actions,
damages, costs, losses and expenses of whatsoever nature arising out of or in
any way connected either directly or indirectly, with: (1) any act, omission or
default arising out of the negligence or wilful default of Shipper; and (2) any
adverse claim by any third party claiming ownership of or an interest in the
gas delivered by Shipper to Company at Shipper's Receipt Point.
14.2 Company shall be liable for and shall indemnify and save
harmless Shipper from and against any and all claims, demands, suits, actions,
damages, costs, losses and expenses of whatsoever nature arising out of or in
any way connected, either directly or indirectly with any act, omission or
default arising out of the negligence of wilful default of Company.
14.3 Notwithstanding the provisions of paragraphs 14.1 and 14.2:
(a) Company and Shipper shall have no liability for, nor any
obligation to indemnify and save harmless the other from any
claim, demand, suit, action, damage, cost loss or expense
which is indirect, special or consequential, including but not
so as to limit the generality of the foregoing; loss of profit
or revenue, cost of capital loss for failure to deliver gas,
cost of purchased or replacement gas, cancellation of permits
or termination of contracts (provided that this shall in no
way affect Shipper's obligation to make the payments to
Company provided for in any Service Agreement);
(b) Company shall have no liability, nor obligation to indemnify
and save harmless Shipper in respect of failure for any reason
whatsoever, other than Company's negligence or wilful default,
to accept receipt of, receive or deliver gas pursuant to the
provision of any Service Agreement between Company and
Shipper; and
Effective: April 1, 1991
47
Sheet 99
(c) Subject to paragraph 3.6 of Service Schedule FS-1, Shipper
shall, notwithstanding any such failure to accept receipt of
or deliver gas, make payment to Company in the amounts, in the
manner and at the times provided in any Service Agreement.
(d) Neither Company nor Shipper shall be liable to indemnify the
other unless the party requesting indemnification shall have
given reasonably prompt notification to the other in writing
of service of any claim, suit or action for or in respect of
which indemnification is to be claimed.
Effective: April 1, 1991
48
Sheet 100
Article XV
FINANCIAL INFORMATION AND SECURITY
15.1 Shipper shall provide Company with any financial information
Company reasonably requests prior to Company providing service and prior to any
extension of the term of any Service Agreement in order that Company may
establish Shipper's creditworthiness.
15.2 Company may request Shipper to provide to Company, as a
condition to the provision or extension of service or any assignment of a
Service Agreement, such financial security as Company may reasonably require.
15.3 In addition to the foregoing, at any time during the term of
service that Company determines that it has a reasonable basis for concern
respecting Shipper's creditworthiness, Company may request, and Shipper shall
provide, an irrevocable letter of credit in an amount equal to the monthly
demand charge set forth in Article 3.1 of Service Schedule FS-1 multiplied by
three.
Effective: April 1, 1991
49
Sheet 101
Article XVI
MISCELLANEOUS PROVISIONS
16.1 No default in the performance of any of the obligations of
Company or Shipper, under any Service Agreement, shall operate to terminate
such Agreement, or except as specifically provided in such Agreement, to
relieve Company or Shipper from due and punctual compliance with its
obligations thereunder.
16.2 The division of these General Terms and Conditions into
articles and clauses, the provision of a table of contents hereto and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Document.
16.3 In the interpretation of these General Terms and Conditions
words in the singular shall be read and construed in the plural and words in
the plural shall be read and construed in the singular where the context so
requires.
16.4 Amendments to any Service Agreement must be in writing and
signed by both parties.
16.5 All Service Agreements and all amendments, modifications,
alternations or supplements thereto shall be governed by the laws in force in
the Province of Alberta as to the nature, validity and interpretation thereof.
16.6(a) Subject to sub-clauses (b) and (c) of this Article 16.6, the
Service Agreement into which these General Terms and
Conditions are incorporated shall not be assigned in whole
or in part by Shipper without the consent of Company, which
consent shall not be unreasonably withheld.
Effective: April 1, 1991