Garden Banks Gas Pipeline, LLC

Original Volume No. 1

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Effective Date: 10/01/2001, Docket: RP01-528-000, Status: Effective

Third Revised Sheet No. 306 Third Revised Sheet No. 306 : Effective

Superseding: Second Revised Sheet No. 306

FORM OF NGL BANK AGREEMENT

 

ARTICLE V

SETTLEMENTS

 

5.1 Settlement Calculations. The NGL Bank settlement

calculations to be performed by the Administrator shall involve a

process that is intended to estimate the monthly theoretical

gross processing margin economics for each Shipper's natural gas

stream. For purposes of this Agreement, such monthly theoretical

gross processing margin economics shall be calculated as follows:

 

a) A shipper's revenue from theoretical processing shall

be calculated by first determining the differences between such

shipper's Production Point NGL components upstream from that

Production Point's Receipt Point, adjusted for phase change

attributable to Retrograde Condensate and injected condensate, if

any, and the weighted average NGL components for all of the

Production Points upstream of the various Receipt Points on

Transporter's Facility, adjusted for phase change attributable to

Retrograde Condensate and injected condensate, if any. The

differences between a shipper's Production Point NGL components

and the weighted average NGL components for all of the Production

Points upstream from the various Receipt Points on Transporter's

Facility shall then be adjusted by applying representative

component recovery factors to provide a likely NGL volume which

would be available after theoretical processing ("Theoretical NGL

Recovery"). Such representative component recovery factors shall

be determined by using the allocated recoveries from the

allocation statements of the gas plants which process gas

delivered from Transporter's Facility to interstate pipelines

which, in turn, deliver the gas to the processing plants

("plants") and once such representative component recovery

factors are determined, same shall be weighted according to the

volume of gas delivered from Transporter's Facility to the Plants

compared to the total volume of gas delivered from Transporter's

Facility. Each month, new representative component recovery

factors shall be calculated using the aforementioned procedure.

The Theoretical NGL Recovery for each individual NGL component

shall then be multiplied by the representative Plant lease

settlement basis and the representative sales price for each

individual NGL component to yield a sum to be known as the

"Theoretical Revenue" for each individual NGL component. For

purposes of this Agreement, the representative Plant lease

settlement basis shall be eighty percent (80%), which may be

adjusted from time-to-time at the Administrator's reasonable

discretion. For purposes of this Agreement, the representative

sales price for each individual NGL component shall be determined

as follows: