Natural Gas Pipeline Company Of America

Seventh Revised Volume No. 1

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Effective Date: 04/18/2008, Docket: RP08-319-000, Status: Effective

Original Sheet No. 403 Original Sheet No. 403 : Pending

 

 

GENERAL TERMS AND CONDITIONS

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to loan Shipper pursuant to an executed RO, times the Index Price.

The Index Price as used herein shall mean the Midpoint Price published

in Gas Daily on the day the loan is agreed upon (which will generally

reflect the previous Business Day's activity) for the Natural Receipt

Zone in which the loan is to occur. For example, if the loan is agreed

to on March 8, for a loan on March 12 in the Louisiana Zone, the Gas

Daily Daily Midpoint Price published on March 8 (reflecting March 7

business) for "NGPL LA" would be used. If such a price is not published

by Gas Daily for that day, Natural will use a price based on an

appropriate index price in another Gas Daily publication or another

publication of common use in the industry as mutually agreed upon by

Natural and Shipper.

 

(c) Where a Shipper selects the prepayment option under

Section 16(b) of these General Terms and Conditions, the prepayment

amounts shall be deposited in an interest-bearing escrow account if such

an account has been established by Shipper which meets the criteria set

out in this paragraph. The costs of establishing and maintaining the

escrow account shall be borne by Shipper. The escrow bank must be rated

at least AA or better and shall not be affiliated with Shipper. The

escrow arrangement shall provide for the prepayment amounts to be

applied against the Shipper's obligation under its service agreement(s)

with Natural and shall grant Natural a security interest in such amounts

as an assurance of future performance. The escrow agreement shall

specify the permitted investments of escrowed funds so as to protect

principal, and shall include only such investment options as

corporations typically use for short-term deposit of their funds. Such

escrow account shall at all times maintain the amount of prepayment

required under Section 16(b) of these General Terms and Conditions. If

Natural is required to draw down the funds in escrow, it will notify the

Shipper and Shipper must replenish such funds within three (3) Business

Days after such notice.

 

(d) Natural's credit appraisal procedures involve the

establishment of dollar credit limits on a standardized,

nondiscriminatory basis. To the extent that a Shipper's accounts with

Natural do not exceed such limit, and Shipper has met all

creditworthiness requirements as determined in periodic credit reviews

by Natural, which reviews may be conducted on at least an annual basis,

no new credit appraisals shall be required when an existing Agreement is

amended or a request for a new Agreement is made, provided that

Shipper's payment history has been satisfactory and there is no bona

fide basis for questioning Shipper's creditworthiness, subject to the

provisions of Section 5.12 of these General Terms and Conditions.