Southern LNG Inc.

Original Volume No. 1

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Effective Date: 03/01/2010, Docket: RP10-271-000, Status: Effective

First Revised Sheet No. 39 First Revised Sheet No. 39

Superseding: Original Sheet No. 39

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

(b) Allocation of Capacity: Firm capacity that is or becomes available from Southern LNG

from time to time shall be allocated pursuant to the following procedures:

 

(i) Subject to all requirements for submitting a valid request for Firm Service

herein, firm capacity will be allocated to the request(s) that on an

aggregate basis generate the highest net present value to Southern LNG.

Requests for service shall be considered together under the same criteria.

Net present value will be determined based on the discounted cash flow of

revenues to Southern LNG produced, lost, or affected by the request(s) for

service. In determining the highest net present value, Southern LNG will

consider objective criteria only. Such criteria may include, without

limitation, the MSQ requested, the duration of the service requested, the

date on which the requested service would commence, the applicable rate, and

such other factors available based on the requests for service received by

Southern LNG. The net present value discount factor used by Southern LNG

will be applied consistently to all requests for capacity being evaluated at

the same time.

 

(ii) If Southern LNG receives two (2) or more requests for service that produce

comparable net present values, whether during an open season or otherwise,

then available capacity will be allocated to the completed request submitted

first in time. If capacity remains available, then Southern LNG will offer

the remaining capacity to the requester next in time.

 

(iii) If capacity is not available to satisfy a request, then the request for

service will be maintained, if such potential Customer or potential Customer

desires, for future allocations. If capacity subsequently becomes available,

then such capacity will be allocated to pending requests, on the date such

capacity becomes available, based on the highest net present value of the

pending requests as provided above, unless Southern LNG elects to conduct an

open season. If an open season is conducted, Customers or potential

Customers with pending requests shall be individually notified and given an

opportunity to participate in such open season. If such Customer or

potential Customer elects not to participate in the open season, then, at the

end of the open season, its pending requests shall be deemed null and void.