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. 125 Original Sheet No. 125

 

Umbrella Agreement in the form contained in this FERC Gas Tariff. PetroLogistics will provide a copy of

this Addendum to the Replacement Shipper via facsimile, at which time the Replacement Shipper will have

the same rights and obligations as any other existing Shipper on PetroLogistics' system. Following

implementation of the release, PetroLogistics shall post notice of the winning bidder on the Internet

Web Site.

8.7 Best Bid. When PetroLogistics makes awards of capacity for which there have been multiple

bids meeting minimum conditions, PetroLogistics shall award the bids, best bid first, until all offered

capacity is awarded. The capacity being awarded represents the MDIQ, MDWQ, or MSQ. These quantities

are separate parts of the capacity and are awarded until one of the quantities is fully awarded, at

which point all capacity is deemed to be fully awarded. PetroLogistics shall evaluate and determine the

best bid among those otherwise consistent with any terms and conditions specified by the Releasing Shipper

as follows:

(a) PetroLogistics shall apply the standard or criteria for such determination specified by the

Releasing Shipper, including the standard to be used for breaking ties. Any standard or criteria so

specified must be objective, economic, not unduly discriminatory, not contrary to applicable provisions

of this FERC Gas Tariff, applicable to all potential Replacement Shippers and require PetroLogistics in

applying such standard to exercise no more than a ministerial function. The Releasing Shipper shall

indemnify and hold PetroLogistics harmless from and against all demands, losses, claims, expenses, causes

of action and/or damages suffered or incurred by PetroLogistics arising out of or related to any

determination of a "best bid" pursuant to a standard specified, supplied, approved or provided by

Releasing Shipper.

(b) In default of Releasing Shipper specifying a bid evaluation standard, PetroLogistics shall

determine the bid or bids generating the highest net present value, using a 10% discount factor, based

on the rate bid (reservation or demand component), the applicable quantity(ies) and term or period bid

upon. In default of Releasing Shipper specifying a method to break ties priority will be given first to

the bid with the shortest term, and next to the bid submitted first in time.

8.8 Qualification of Prospective Replacement Shipper. A prospective Replacement Shipper must

be on PetroLogistics' approved bidders list before bids may be posted on the Internet Web Site, must

satisfy all requirements of the applicable Rate Schedule and the General Terms and Conditions of this FERC

Gas Tariff and must have executed a Capacity Release Umbrella Agreement. To be on the approved bidders

list, the prospective Replacement Shipper must satisfy PetroLogistics' credit requirements as outlined

in Section 2.3 of the General Terms and Conditions, and provide PetroLogistics any information required

by Section 2.3 of the General Terms and Conditions. Such credit appraisal shall be reevaluated and

updated every three (3) months. The prospective Replacement Shipper shall remain on the approved bidders

list until such prospective Replacement Shipper (i) notifies PetroLogistics to the contrary, (ii) no

longer meets the credit qualifications established in Section 2.3 of the General Terms and Conditions,

or (iii) is suspended from the approved bidders list in the event, and for such time as, such

Replacement or Prearranged Shipper fails to pay part or all of the amount of any bill for service in

accordance with Section 13 of the General Terms and Conditions. PetroLogistics will apply its

creditworthiness criteria to assess the submission.

On a not unduly discriminatory basis, PetroLogistics will permit Replacement Shippers not satisfying

the creditworthiness requirements to submit bids, if the Releasing Shipper provides PetroLogistics with

a guarantee or other form of credit assurance in form and substance satisfactory to PetroLogistics of

all financial obligations of the Replacement Shipper with respect to the capacity being released by

Releasing Shipper prior to the commencement of service to the Replacement Shipper.

8.9 Nominations. Following its selection, and prior to the flow of gas, the Replacement Shipper

shall be permitted to submit nominations pursuant to the terms and conditions of the applicable Rate

Schedule and the General Terms and Conditions of this FERC Gas Tariff.

8.10 Billing. The Replacement Shipper shall be billed and make payments to PetroLogistics in

accordance with the applicable Rate Schedule, other provisions of this FERC Gas Tariff and of its

service agreement incorporating its bid terms. In accordance with the terms of the release, the

Replacement Shipper shall pay or be liable for the