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. 119 Original Sheet No. 119

 

with the OFO; (iv) the anticipated duration of the OFO; (v) the status of operational variables that

determine when an OFO will begin and end; and (vi) any other terms that PetroLogistics may reasonably

require to ensure the effectiveness of the OFO. PetroLogistics shall promptly post periodic updates of

such information upon occurrence of any material change in information, including when an OFO will be

lifted.

PetroLogistics will also post the factors that caused the OFO to be issued, then lifted, to the extent

such factors are known.

(f) Unilateral Action. In the event Shipper(s) or point operator(s) does not comply with an OFO or

the actions thereunder are insufficient to correct the system problem, or there is insufficient time to

carry out the OFO procedures, PetroLogistics may take unilateral action, including the curtailment of

Firm service, to maintain the operational integrity of PetroLogistics' system. For purposes of this

section, the operational integrity of PetroLogistics' system shall encompass the integrity of the

physical system and the preservation of physical assets and their performance, the overall operating

performance of the entire physical system as an entity, and the maintenance (on a reliable and

operationally sound basis) of total system deliverability and the quality of gas to be delivered.

(g) Termination of OFO. PetroLogistics shall lift any effective OFO promptly upon the cessation of

operating conditions that caused the relevant system problem. After PetroLogistics has lifted the OFO,

PetroLogistics shall post a notice on its Web Site specifying the factors that caused the OFO to be

issued and then lifted, to the extent such factors are known. PetroLogistics shall also provide such

notification via e-mail communication to those Shippers who have submitted a request, and provided

e-mail address information for at least one contact person, via PetroLogistics' Web Site to receive

e-mail notification of critical notices issued by PetroLogistics.

(h) Penalties. All quantities tendered to PetroLogistics and/or taken by Shipper on a daily

basis in violation of an OFO shall constitute unauthorized receipts or deliveries for which the applicable

OFO penalty charge stated below shall be assessed; provided, however, that to the extent Shipper is

required to make a nomination pursuant to an OFO unless critical circumstances dictate otherwise, no

penalty will be assessed unless Shipper is given notice and a reasonable period of time to correct

the circumstances giving rise to the OFO.

(1) OFO penalty charge for each Dth of gas by which Shipper deviated from the requirements of the

OFO equal to an OFO Index Price calculated as three (3) times the applicable daily Gas Daily posting

for the Transporter on whose pipeline the deviation occurred for the Day on which the deviation

occurred, multiplied by the quantity by which Shipper deviated from the requirements of the OFO.

(2) Any penalty revenue collected by PetroLogistics pursuant to this Section 7.4(h) shall be

credited to those Firm and Interruptible Shippers that did not incur the OFO pursuant to this Section

7.4 in the Month for which the OFO penalty revenues were received ("Non-Offending Shippers"), based on

the ratio of the total charges paid during that Month by the Non-Offending Shipper to the sum of

the total charges paid during that Month by all Non-Offending Shippers. Such credits shall be

calculated for each Month of the twelve (12) month period ending July 31 of each year and will be

included on the Non-Offending Shipper's invoice for the Month following the date of the final

Commission order approving PetroLogistics' penalty disbursement report; provided, however, that

PetroLogistics will calculate and include such credits on Non-Offering Shipper's invoices for a

period shorter than twelve months in the event and to the extent that the total accumulated amount

of OFO penalty revenue collected pursuant to this Section 7.4(h) by PetroLogistics as of the end

of any Month exceeds $1,000,000. PetroLogistics will file a penalty disbursement report within

sixty (60) days of July 31 or sixty (60) days after the end