Southern LNG Inc.

Original Volume No. 1

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Effective Date: 11/19/2007, Docket: RP08- 25-000, Status: Effective

First Revised Sheet No. 73 First Revised Sheet No. 73 : Effective

Superseding: Original Sheet No. 73

GENERAL TERMS AND CONDITIONS

(Continued)

 

15. PREGRANTED ABANDONMENT OF LONG-TERM, FIRM SERVICE AGREEMENTS

 

The following provisions shall apply to all firm Service Agreements having a primary term of twelve

(12) consecutive months or more and a rate of the maximum rate eligible for the applicable service.

These provisions shall not apply to any firm Service Agreements which have a discounted or negotiated

rate as described in Section 25 of these General Terms and Conditions unless Southern LNG and Customer

mutually agree under the terms of the negotiated rate or discount exhibit that the rights hereunder

shall accrue to Customer. No later than thirty-six (36) months prior to the effective termination date

of Customer's firm Service Agreement, whether such date is specified in the Service Agreement or in

Southern LNG's notice of termination as allowed by such Service Agreement, Southern LNG shall post on

SoNet the capacity which will be available upon the termination of Customer's firm Service Agreement.

 

Each bidder for Customer's firm capacity, or any part thereof, must submit its bid to Southern LNG in

writing or through SoNet (with the appropriate service request form and any required prepayment under

Southern LNG's FERC Gas Tariff applicable to the service, unless already on file with Southern LNG)

within the time specified by Southern LNG on SoNet. Each bid shall contain the term for which the

capacity is sought and the percentage of the maximum rate in effect during said term, which the bidder

is willing to pay for the capacity. If Southern LNG receives more than one bid for Customer's

capacity, and it does not reject all bids as provided below, it will choose the bid, or combination of

bids, that generates the most revenue on a net present value basis ("best bid"); provided, however,

that Southern LNG reserves the right to reject any bid which is for less than one-hundred percent

(100%) of the maximum rate applicable to Customer's firm service. Southern LNG will determine net

present value by multiplying the rate bid by the volume bid discounted to present value based on the

currently effective interest rates issued by the Commission pursuant to its Part 154 Regulations (18

C.F.R. pt. 154).

 

Southern LNG will notify Customer of the best bid received in an arm's length transaction that Southern

LNG is willing to accept, and Customer shall have a specified time of no less than fifteen (15) days

within which it must match the price, quantity, and contract term (not to exceed the applicable term

matching cap, if any) offered in the best bid in order to retain its firm capacity; provided, however,

in the event the bidder bids a negotiated rate higher than the effective maximum rate, SHIPPER shall

only be required to match the bid at the maximum rate applicable to the service in order to retain its

capacity. If Customer matches the best bid, then Southern LNG and Customer will enter into a new firm

Service Agreement reflecting the terms of Customer's matching bid. If Customer fails to match the best

bid within the time allowed by Southern LNG, then Customer's existing firm Service Agreement will be

subject to pregranted abandonment upon the effective termination date of Customer's Service Agreement,

and Southern LNG will enter into a new firm Service Agreement of even date with the party or parties

offering the best bid.