Destin Pipeline Company, L.L.C.

Original Volume No. 1

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Effective Date: 09/01/1998, Docket: CP96-655-003, Status: Effective

Original Sheet No. 249 Original Sheet No. 249 : Effective

 

 

FORM OF RESERVE COMMITMENT AGREEMENT

(Continued)

 

 

2.7 Permanent Release -- Connected Fields

 

This Section 2.7 applies to gas produced from Committed Lease(s) composing an

OCS field that are connected to deepwater laterals or deepwater hubs which

are connected to Company's pipeline and related facilities ("Connected

Fields"). In the event Shipper has had Temporary Release Quantities for more

than 90 consecutive days or for more than 90 days during any consecutive 180

day period, Shipper may request in writing from Company a prospective

permanent release of the daily quantities of gas in future delivery periods

in excess of the daily quantities of FT-2 service that Company is able to

make available to Shipper during such future delivery periods as described

below. Such request shall include a schedule of quantities of gas that

Shipper reasonably expects to nominate and have available for delivery from

Connected Fields in future delivery periods. Company shall act upon

Shipper's release request as soon as practicable, but in no event later than

six (6) months from the date of receipt of Shipper's request. Such actions

may include, without limitation, the installation of facilities or the

solicitation of available firm TDs from other Shippers, to enable Company to

receive such additional quantities from Shipper. To that end, Company shall

review with Shipper the steps or actions Company is taking, or proposes to

take, as soon as practicable but in no event later than three (3) months

following Shipper's release request, and the additional TDs, if any, that are

available to Shipper under its FT-2 Service Agreements in such future

delivery periods. As part of such review, Company shall notify Shipper of

the quantities of gas eligible for permanent release. Such quantities shall

be equal to amount(s) of up to (a) the daily quantities of gas that Shipper

reasonably expects to nominate and have available for delivery from Connected

Fields in future delivery periods, minus (b) the quantities of FT-2 service

made available to Shipper for such future delivery periods (including the TDs

under Shipper's existing FT-2 Service Agreements) on the date of such review

(the "Permanent Release Quantities"). Within fifteen (15) days after such

review, Shipper must notify Company in writing if Shipper elects to implement

the permanent release of the obligations under Section 2.1 with respect to

the Permanent Release Quantities; provided, however, that the Permanent