Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 02/21/2009, Docket: RP09-233-000, Status: Effective

Third Revised Sheet No. 284 Third Revised Sheet No. 284

Superseding: Substitute Second Revised Sheet No. 284

 

GENERAL TERMS AND CONDITIONS

 

45. WARRANTY

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In the event Northern does not have title to the gas being transported,

Shipper warrants that Shipper at the time of delivery of gas to Northern

will have good title to all such gas pursuant to contractual arrangements

entered into prior to commencement of service, and that it will deliver, or

cause to be delivered, such gas free from all liens, encumbrances and claims

whatsoever; provided, however, that pursuant to Section 44, of these

General Terms and Conditions, Shipper or its designee may elect to retain

the right to process such gas for the removal of liquids and liquifiable

hydrocarbons, but in such instances Shipper warrants that it or its designee

has good right to do so pursuant to contractual arrangements entered into

prior to commencement of service. Shipper will indemnify Northern and save

it harmless from all suits, actions, debts, liabilities, accounts, damages,

costs, losses, and expenses (including attorneys' fees and court costs)

arising out of the adverse claim of any person or persons claiming ownership

of any interest in the gas or for any taxes, licenses, royalties, fees, or

charges which are applicable prior to the time of delivery of such gas to

Northern. In the event any adverse claim of any character whatsoever is

asserted with respect to any of said gas, Northern shall have the right to

suspend service under the Service Agreement until such time as Shipper's

title or right to deliver is free from question.

 

46. CREDIT WORTHINESS

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Prior to execution of a Service Agreement, providing for service under any

Rate Schedule, a Shipper or a prospective shipper (hereinafter in this

section jointly referred to as "Shipper") shall be required to establish

creditworthiness with Northern. Northern shall not be required to:

(i) execute a Service Agreement providing for service under the applicable

Rate Schedule on behalf of any Shipper who fails to meet Northern's

standards for creditworthiness; or (ii) initiate service to a Shipper who

fails to meet Northern's standards for creditworthiness; or (iii) continue

transportation service on behalf of any Shipper who is or has become

insolvent or who, at Northern's request, fails within a reasonable period to

demonstrate creditworthiness.

 

For purposes herein, the determination of Shipper's creditworthiness shall

be based upon the level of service requested by Shipper and Shipper's

estimated financial strength as defined by a credit rating of investment

grade, defined as a rating of at least "BBB-" by Standard & Poor's

Rating Group (Standard & Poor's), a rating of at least "Baa3" by Moody's

Investors Service, Inc. (Moody's), a rating of at least "BBB-" by Fitch

Ratings (Fitch) (collectively "Minimum Rating"), and if Shipper is at the

Minimum Rating, the Shipper's Short-Term and Long-Term Outlook or Credit

Watch must be Stable or Positive from Standard & Poor's, Moody's and Fitch;

or for Canadian Shippers not rated by Standard & Poor's, Fitch, or Moody's,

a rating of at least "BBB(low)" by Dominion Bond Rating Service (Dominion)

and the Canadian Shipper's Short-Term and Long-Term Outlook or Credit Watch

is Stable or Positive from Dominion. To the extent Shipper is rated by

multiple agencies, the lower rating applies. If Shipper is not rated by

Standard & Poor's, Moody's, Fitch, or Dominion, a determination of a

Shipper's creditworthiness shall be based upon (at the Shipper's election)

(i) the credit rating assigned to the Shipper's parent company (if the

parent company is creditworthy it must provide a written guarantee in a form

satisfactory to Northern), or (ii) a credit rating, as evaluated by

Northern, based upon the level of service requested by Shipper and financial

analysis criteria and ratios which are generally acceptable in the natural