Bluewater Gas Storage, LLC

Original Volume No. 1

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Effective Date: 12/01/2006, Docket: CP06-351-001, Status: Effective

Original Sheet No. 156 Original Sheet No. 156 : Effective

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

a replacement Letter of Credit no later than 120 days

prior to the expiration of the then-effective Letter of

Credit. BLUEWATER will return the expiring Letter of

Credit to Customer within five (5) days of the date the

Replacement Letter of Credit becomes effective;

 

(2) each Letter of Credit shall be in form and

substance satisfactory to BLUEWATER, and shall provide

for partial drawdowns and, without limiting the

generality of the foregoing, shall be issued by a

financial institution acceptable to BLUEWATER that is

rated at least BBB- by Standard and Poor's Corporation

and Baa3 by Moody's Investor Services, Inc.; and

 

(3) in addition to all other remedies available to

BLUEWATER at law or in equity, if Customer fails to

provide a replacement Letter of Credit in accordance

with this Section 31.7(a), BLUEWATER may draw upon the

expiring Letter of Credit to the full amount thereof

and apply the funds so drawn in payment in whole or in

part of the obligations of Customer under each or any

of Customer's Storage Service Agreements.

 

(b) Customer shall provide to BLUEWATER, to secure its

obligation to BLUEWATER pursuant to each of Customer's Storage

Service Agreements, a Guarantee granted to BLUEWATER by Customer's

direct or indirect parent (the "Guarantor") with an Acceptable

Credit Rating. The Guarantee shall be in a form acceptable to

BLUEWATER and the provisions of this Section shall apply to the

Guarantor as if the Guarantor were the Customer.

 

(c) If Customer has requested, BLUEWATER may accept other

forms of Financial Assurances to secure Customer's obligations under

the Storage Service Agreements, provided that BLUEWATER may reject

or accept such other forms of Financial Assurances in a manner that

is not unduly discriminatory; or

 

(d) Customer shall prepay for service in an amount as set

forth immediately below, provided that such prepayments shall be

considered collateral held for security and not advance payments for

services and that Customer may deposit its prepayment funds into an

interest-bearing escrow account established by Customer granting

BLUEWATER access to the account for payment of services under

Customer's Storage Service Agreement(s).

 

The dollar value of the Financial Assurances set forth above in this

Section 31.7 to be provided by Customer shall be in an amount equal

to: (1) in the case of Firm Storage Services to be provided by

BLUEWATER using existing facilities, reservation charges payable at

the rate specified in Customer's bid for service or Storage Service

Agreement for a period of three (3) Months or the duration of the

Customer's bid or Storage Service Agreement, whichever is shorter;

(2) in the case of Interruptible services to be provided by

BLUEWATER using existing facilities, the Interruptible charge(s)

calculated on a one hundred percent (100%) load factor basis payable

for a period of three (3) Months or the duration