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. 124 Original Sheet No. 124

 

Prearranged Shipper must initiate confirmation for prearranged deals electronically.

PetroLogistics will issue a contract within one hour of notification of the release (with a new

contract number, when applicable). Nominations for gas flow are possible beginning at the next

available nomination cycle for the effective date of the contract. Such nominations will be processed

in accordance with the nomination and scheduling requirements of Section 6 of the General Terms and

Conditions; however, in no circumstance will gas flow prior to the effective date of the release as

specified in Releasing Shipper's offer. If a release of capacity is exempt from bidding because it

is for a term of thirty-one (31) days or less, a Releasing Shipper may not roll-over, extend, or in

any way continue the release to the same Replacement Shipper using the thirty-one (31) days or less

bidding exemption, unless the Releasing Shipper complies with the posting and bidding requirements of

Section 8.3 or not less than twenty-eight (28) days have elapsed since the conclusion of the prior

release period.

PetroLogistics shall post offers and bids, including pre-arranged deals, upon receipt, unless

Releasing Shipper requests otherwise. If a Releasing Shipper requests a posting time, PetroLogistics

shall support such request insofar as it comports with the standard timeline. A Releasing Shipper

cannot specify an extension of the original bid period or the pre-arranged deal match period, without

posting a new release.

8.4 Pre-arranged Releases. Releasing Shipper may designate an entity (a designated pre-arranged

Replacement Shipper) to which it has agreed to release the capacity upon specified terms and conditions.

Releasing Shipper's offer to release under such a pre-arranged transaction shall be subject to the prior

posting and bidding procedures described in Sections 8.5 and 8.6, herein, with the pre-arranged Replacement

Shipper being given a right to match the best bid submitted during the bid period; provided, however, if

a pre-arranged transaction with a pre-arranged Replacement Shipper is for a period of thirty-one (31)

days or less, to an asset manager (as defined by FERC regulations at 18 C.F.R. § 284.8(h)(3)) or to a

marketer participating in a state-regulated retail program (as defined by FERC regulations at 18 C.F.R.

§ 284.8(h)(4)), the Releasing Shipper shall provide notice to PetroLogistics in accordance with this

Section and may implement the release without complying with such prior posting and bidding procedures.

Notices of such exempted releases shall be posted on the Web Site in accordance with Section 8.3 herein.

8.5 Posting. Following receipt of a notice of offer to release capacity which satisfies the

requirements set forth in this Section, PetroLogistics will post such information on its Web Site in

accordance with the timeline set forth in Section 8.3 herein. PetroLogistics shall also post offers

to purchase capacity from those who desire current Shippers to release capacity upon receipt of the

applicable information as set forth in this Section.

8.6 Bidding and Selection of Replacement Shipper. All bids must contain the applicable

information required in this Section. If Releasing Shipper desires to solicit bids for releases of 31

days or less, to an asset manager (as defined in 18 C.F.R. 284.8(h)(3)) or to a marketer participating

in a state-regulated retail access program (as defined in 18 C.F.R. 284.8(h)(4)), it may direct

PetroLogistics to post notice of the availability of such capacity and, in lieu of permitting bids during

the otherwise applicable posting period, award the capacity to the bidder which submits first in time a

valid bid meeting any minimum terms specified by the Releasing Shipper. Any bid submitted by a

Replacement Shipper shall include an e-mail address for at least one contact person, and it is Shipper's

responsibility to update e-mail address information provided to PetroLogistics, as necessary. A bidder

may not have more than one eligible bid for the same release offer at any time. Bids shall be binding

until written or electronic notice of withdrawal is received by PetroLogistics before the end of the bid

period. Bids cannot be withdrawn after the bid period ends. Once a bid is withdrawn, that bidder may only

submit a new bid pursuant to that release offer if it is at a higher rate than the withdrawn bid.

PetroLogistics shall evaluate the bids in accordance with the provisions of this section and determine the

best bid in accordance with the timelines set forth in Section 8.3 herein. PetroLogistics shall not

award capacity release offers to the Replacement Shipper until and unless the Replacement Shipper

meets PetroLogistics' creditworthiness requirements applicable to all services that it receives from

PetroLogistics, including the service represented by the capacity release. Further, PetroLogistics shall

not award capacity release offers to the Replacement Shipper until and unless it is reasonable to do

so and PetroLogistics' lenders agree to so discharge the capacity. PetroLogistics shall notify

Releasing Shipper, the best bidder, and any prearranged designated Replacement Shipper of such

determination in accordance with the timelines set forth in Section 8.3 herein. If there is a pre-arranged

designated Replacement Shipper, it may exercise its right to match such best bid by providing written

notice of such exercise to PetroLogistics and Releasing Shipper in accordance with the timelines set forth

in Section 8.3 herein. After the Replacement Shipper is selected, PetroLogistics will finalize an

appropriate Addendum to the Capacity Release