Freebird Gas Storage, L.L.C.

First Revised Volume No. 1

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Effective Date: 10/01/2008, Docket: RP08-304-000, Status: Effective

Original Sheet No. 37 Original Sheet No. 37 : Suspended

 

8. EXPIRATION OF TERM

8.1 Failure to Return Gas. On or before the end of an ILS service period,

Shipper must have delivered to the Storage Facility a volume of Gas equal to

the loaned quantities borrowed by Shipper under the relevant Service

Agreement. Except as provided under Section 8.3 below, if Shipper fails to

re-deliver all loaned quantities on or before the last Day of the service

period, Freebird will have the right, at its sole option, to either (i)

attempt to negotiate with Shipper to enter into a new Service Agreement, on an

interruptible basis, related to such unreturned loaned quantities (for

example, a new ILS Service Agreement), (ii) treat the loaned quantities that

have not been re-delivered as a sale of such loaned quantities to Shipper

under the terms set forth in Section 8.2, and/or (iii) resort to a combination

of both such remedies. Freebird’s election to enter into a new Service

Agreement will not prevent it from subsequently exercising its rights pursuant

to Section 8.2 at any time loaned quantities have not been re-delivered to

Freebird after the end of the new service period. Freebird’s resort to any

remedy under this Article 8 will not relieve Shipper of its obligation to pay

Freebird for any applicable charges accruing to Shipper’s account before such

actions are taken.

 

8.2 Transfer of Title. Pursuant to the provisions of Section 8.1 above, but

subject to Section 8.3 below, at Freebird’s sole option, Freebird shall charge

Shipper, and Shipper shall pay within ten (10) Days of Freebird’s invoice, for

a quantity of Gas thermally equivalent to the loaned quantities that were not

returned to Freebird, at a price per Dth equal to the Current Market Price of

such Gas, plus Freebird’s costs related to Shipper’s failure to timely return

the loaned Gas, with "Current Market Price" being measured on the date on

which Freebird liquidates Shipper’s outstanding ILS quantities and which is

the greater of (A) the NYMEX Prompt Month settlement price, as adjusted for

the applicable basis differential, and (B) the "balance of month" market price

as reflected by Intercontinental Exchange ("ICE") (or the open market price,

if ICE has no relevant balance of month price information available on a

timely basis).  Freebird will invoice Shipper for such amount and Shipper’s

loaned quantities with respect to the relevant Service Agreement will be

decreased accordingly upon Shipper’s payment therefor.

 

8.3 Force Majeure. The provisions of Sections 8.1 and 8.2 are subject to the

provisions of this Section 8.3. To the extent Shipper is unable to deliver to

the Storage Facility a volume of gas equal to the loaned quantities borrowed

by Shipper under a Service Agreement before the end of the applicable service

period by reason of suspension of injection rights during the service period

caused by Force Majeure declared by Freebird or other curtailment of such

rights declared by Freebird, Shipper shall be allowed to nominate to deliver

to the Storage Facility all remaining loaned quantities under such Service

Agreement, on an interruptible basis and in accordance with Shipper’s MDIQ,

and Freebird shall refrain from exercising its rights under Sections 8.1 and

8.2, for a reasonable time after the expiry of such Force Majeure or

curtailment period (i.e., the same number of Days as Shipper’s injection

rights were subject to such Force Majeure and/or curtailment period during the

initial service period), provided, however, that after such reasonable time

the terms of Sections 8.1 and 8.2 shall once again apply.

 

9. GENERAL TERMS AND CONDITIONS

Applicable provisions of the General Terms and Conditions of this FERC Gas

Tariff, as such provisions may be amended from time to time, are hereby

incorporated by reference and made a part of this Rate Schedule ILS, where

applicable, and shall supplement the terms and conditions governing service

rendered hereunder, as though stated herein; provided, however, that in the

event of any inconsistency, the terms of this Rate Schedule ILS shall

control.