PetroLogistics Natural Gas Storage LLC

Original Volume No. 1

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Effective Date: 06/03/2009, Docket: RP09-577-000, Status: Effective

Original Sheet No. 107 Original Sheet No. 107

 

requirement set forth in Section 2.3(b)(1) of these General Terms and Conditions and may be obtained

in one of the following two ways:

(A) Potential Shipper/Shipper may request an equivalent rating as determined by PetroLogistics,

based on the financial rating methodology, criteria and ratios for the industry of Potential

Shipper/Shipper as published by S&P and Moody's from time to time. In general, such equivalent rating

will be based on the audited financial statements for Potential Shipper/Shipper's two most recent fiscal

years, all interim reports and any other relevant information. PetroLogistics shall apply financial

evaluation standards consistently and on a non-discriminatory basis. If Potential Shipper/Shipper

requests an equivalent rating determination by PetroLogistics and Potential Shipper/Shipper is found

not to meet the minimum requirements set forth in Section 2.3(b)(1) of these General Terms and

Conditions, PetroLogistics shall inform Potential Shipper/Shipper of the basis of such finding.

(B) Potential Shipper/Shipper may, at its own expense, obtain an equivalent rating from a credit

rating agency acceptable to PetroLogistics, or request that an independent accountant or financial

advisor mutually acceptable to PetroLogistics and Potential Shipper/Shipper prepare an equivalent

rating based on the financial rating methodology, criteria and ratios for the industry of Potential

Shipper/Shipper as published by S&P and Moody's.

(c) Alternative Forms of Security. If at any time Potential Shipper/Shipper does not meet the minimum

acceptable credit standard as described in Section 2.3(b)(1) of these General Terms and Conditions,

Potential Shipper/Shipper shall be required to provide one of the following alternative forms of

security to PetroLogistics:

(1) Potential Shipper/Shipper may post and maintain in effect a standby, irrevocable Letter of

Credit (1) issued by a financial institution with combined capital and surplus of at least

$500,000,000 that is rated at least A by Standard & Poor's Corporation and A2 by Moody's Investor

Services, Inc., (2) that provides for partial drawdowns, and (3) in form and substance is satisfactory

to PetroLogistics in its reasonable judgment. A form of letter of credit is available from PetroLogistics.

For service that is not originally subscribed in connection with construction, the amount of the Letter of

Credit shall at all times be no less than the value of three (3) Months' worth of applicable transportation

charges for the requested MSQ at the maximum applicable unit rate for Potential Shipper/Shipper's service at

100% load factor. For service that is originally subscribed in connection with construction, the amount of

the Letter of Credit shall at all times be no less than the amount set forth in Potential Shipper/Shipper's

precedent agreement. If PetroLogistics draws funds under the Letter of Credit, Potential Shipper/Shipper

shall replenish the Letter of Credit to the required value specified herein no later than five (5)

Business Days after such drawing.

(2) Potential Shipper/Shipper may provide a guaranty of all of Shipper's obligations under the

Service Agreement granted to PetroLogistics by the Potential Shipper/Shipper's parent, affiliate or

third party with a credit rating of at least the Minimum Acceptable Credit Rating, which guarantee

shall be in form and substance reasonably satisfactory to PetroLogistics. A form of guaranty is

available from PetroLogistics.