Kinder Morgan Louisiana Pipeline LLC

Original Volume No. 1

 Contents / Previous / Next / Main Tariff Index

 

 

Effective Date: 03/01/2009, Docket: RP09-257-000, Status: Effective

Original Sheet No. 164 Original Sheet No. 164

 

GENERAL TERMS AND CONDITIONS

----------------------------

 

12. EVALUATION OF CREDIT

 

12.1 In evaluating requests for service and for certain other

purposes under this Tariff, including Sections 2.8 and 12.2 of these

General Terms and Conditions, KMLP will perform a credit appraisal

of Shipper.

 

(a) Acceptance of a Shipper's request for service and

the continuation of service are contingent upon the Shipper

satisfying creditworthiness requirement on an on-going basis. KMLP'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 KMLP do not exceed such limit,

and Shipper has met all creditworthiness requirements as determined

in periodic credit reviews by KMLP, which reviews may be conducted

on at least an annual basis, new credit appraisals may be required

when an existing Agreement is amended or a request for a new

Agreement is made, subject to the provisions of Sections 2.8 and

12.2 of these General Terms and Conditions. To determine

creditworthiness, a credit appraisal shall be performed in

accordance with the following criteria:

 

(1) KMLP shall apply consistent evaluation

practices to all similarly situated Shippers to determine the

Shipper's financial ability to perform the payment of obligations

due to KMLP over the term of the requested or existing Agreement(s).

The creditworthiness requirements of this Section 12 shall apply to

any assignment (in whole or in part) of any Agreement or any release

of an Agreement.

 

(2) A Shipper will be deemed creditworthy if (i)

its long-term unsecured debt securities are rated at least BBB- by

Standard & Poor's Corporation ("S&P") and at least Baa3 by Moody's

Investor Service ("Moody's") (provided, however, that if the

Shipper's rating is at BBB- or Baa3 and the short-term or long-term

outlook is Negative, KMLP may require further analysis as discussed

below); and (ii) the sum of reservation fees, commodity fees and any

other associated fees and charges for the contract term is less than

15% of Shipper's tangible net worth. In the event Shipper is rated

by both S&P and Moody's, the lower rating applies. For the purposes

of this Section 12, the term "tangible net worth" shall mean for a

corporation the sum of the capital stock, paid-in capital in excess

of par or stated value, and other free and clear equity reserve

accounts less goodwill, patents, unamortized loan costs or