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. 111 Original Sheet No. 111

 

of the following methods, as identified in the notice of the open season: (i) the highest present

value of the reservation charges or other source of guaranteed revenue to be received by PetroLogistics

over the term of each Service Agreement; (ii) the highest reservation charge, or other source of

guaranteed revenue, bid; or (iii) an alternative objective and not unduly discriminatory method chosen

by PetroLogistics and posted at least three Days prior to when the capacity is posted for bidding. In

the notice of the open season, PetroLogistics shall specify an objective, not unduly discriminatory

method for allocating capacity in the event of equivalent bids from more than one Potential Shipper.

(d) Should requests for firm storage exceed available capacity during the allocation process of an

open season, capacity will first be allocated to the highest present value bids received for Firm

service. When remaining unallocated capacity is not sufficient to meet the next highest present value

bidder's capacity requirements for Firm service, that next highest bidder has the option of declining

the remaining capacity. PetroLogistics will then offer the remaining capacity to the next highest bidder,

until all the remaining capacity is allocated.

(e) Should the next highest present value bid in Section 2.6(c) above be submitted by two or more

Shippers (e.g., tied bids) and there is insufficient remaining capacity available to serve such Shippers,

then capacity will be allocated to Shippers on a pro rata basis.

(f) Execution of agreements. A Shipper allocated service in an open season shall be required to execute

Service Agreement(s) for Firm service pursuant to the requirements of Section 2 of these General Terms and

Conditions, including the creditworthiness requirements.

(g) PetroLogistics will accept requests for Firm service for any available capacity remaining after

an open season. The remaining capacity shall be allocated on a first-come, first-served basis. That is,

the first Shipper offering to pay a rate for service that PetroLogistics finds acceptable shall be

allocated capacity.

2.7 Allocation of Available Capacity. Capacity will be allocated to the bid producing the highest

Net Present Value ("NPV"), using the methodology set forth by PetroLogistics, at the time capacity is made

available, and which also meets all terms and conditions specified by PetroLogistics as set forth in any

open season documents provided to Potential Shipper by PetroLogistics, if applicable.

2.8 Priority of Service. In all instances, Firm service will have a superior priority to

Interruptible service.

(a) In the event that PetroLogistics must restrict Firm service, such service will be restricted on a

pro rata basis based on each Shipper's applicable Maximum Storage Quantity. In the event that such

action must be taken, PetroLogistics will notify Shipper via facsimile.

(b) Interruptible storage service will be restricted based on price, where Shippers paying the highest

price receive the highest priority.

(c) Should two or more Interruptible Shippers have the same priority, capacity will be allocated to

each Shipper on a pro rata basis.

2.9 Prior to the expiration of the term of a Part 284 Service Agreement and prior to PetroLogistics'

posting the availability of capacity under PetroLogistics' right of first refusal provisions, if applicable,

PetroLogistics and Shipper may mutually agree to an extension of the term of the Service Agreement (the

exact length of which is to be negotiated on a case-by-case basis, in a not unduly discriminatory manner).

2.10 PetroLogistics shall not be required to perform the requested service in the event all

facilities necessary to render the requested service do not exist at the time the request for service is

submitted to PetroLogistics.