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. 108 Original Sheet No. 108

 

(3) Potential Shipper/Shipper may prepay for service via cleared check or wire transfer. For

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

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

precedent agreement. Prepayment amounts shall be deposited in an interest-bearing escrow account if

such an account has been established by Potential Shipper/Shipper and PetroLogistics reasonably

determines that such account is satisfactory. The costs of establishing and maintaining the escrow

account shall be borne by PetroLogistics. The escrow bank must be acceptable to PetroLogistics in its

reasonable judgment. The escrow agreement shall provide for prepayment amounts to be applied against

Potential Shipper/Shipper's obligation under its service agreement(s) with PetroLogistics and shall

grant PetroLogistics a security interest in such amounts as an assurance of future performance.

The escrow agreement shall specify the permitted investments of escrowed funds so as to protect

principal, and shall include only such investment options as corporations typically use for short-term

deposit of their funds. If PetroLogistics is required to draw down the funds in escrow, Potential

Shipper/Shipper shall replenish such funds no later than five (5) Business Days.

(4) Potential Shipper/Shipper may provide such other form of security as mutually acceptable to

Potential Shipper/Shipper and PetroLogistics.

(5) All of PetroLogistics' creditworthiness review standards and requirements shall be imposed

on a non-discriminatory basis. Security shall no longer be required pursuant to this Section 2.3(c)

when Potential Shipper/Shipper achieves the minimum acceptable credit standard set forth in Section

2.3(b)(1) or when the Potential Shipper/Shipper is no longer receiving Services from the

PetroLogistics, and has not guaranteed and is not otherwise liable for the performance of any assignee

of Shipper, and has paid in full for all Services received from PetroLogistics in the past. Upon Potential

Shipper/Shipper's request, which may be made at any time, PetroLogistics shall determine whether Potential

Shipper/Shipper has achieved the minimum acceptable credit standard as described in Section 2.3(b)(1).

In the event PetroLogistics determines that Potential Shipper/Shipper achieves the minimum acceptable

credit standard, PetroLogistics shall terminate any alternative forms of security that Potential

Shipper/Shipper may have been required to provide to PetroLogistics. If Potential Shipper/Shipper

has provided such security in the form of a prepayment, PetroLogistics shall refund any unused

prepayment within five (5) Business Days, plus interest due to Potential Shipper/Shipper, less

costs incurred by PetroLogistics.

(d) Termination Based on Non-Creditworthiness.

(1) If at any time PetroLogistics reasonably determines that Shipper does not meet the minimum

acceptable credit standard set forth in Section 2.3(b)(1) of these General Terms and Conditions and

Shipper has not already provided an alternative form of security as provided for in Section 2.3(c)

of these General Terms and Conditions, PetroLogistics may notify Shipper in writing that it must

provide one of the alternative form of security specified in Section 2.3(c) of these General Terms

and Conditions. If: (a) within five (5) Business Days of such notice, Shipper has not provided a

guaranty as described in Section 2.3(c)(2) of these General Terms and Conditions, or prepayment or

a letter of credit (in either case an amount sufficient to