Kinder Morgan Louisiana Pipeline LLC

Original Volume No. 1

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

Original Sheet No. 171 Original Sheet No. 171

 

GENERAL TERMS AND CONDITIONS

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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 KMLP and

shall grant KMLP 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 prepayments

required under Section 12.1(b) of these General Terms and

Conditions. If KMLP 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) In the event KMLP constructs new lateral

facilities to accommodate a Shipper, KMLP may (unless otherwise

agreed) require from the Shipper security in an amount up to the

cost of the facilities. This provision does not apply to mainline

expansions. Such security may be in any of the forms available under

Section 12.1(b) of these General Terms and Conditions, at Shipper's

choice. KMLP is only permitted to recover the cost of facilities

once, either through rates or through this provision. As KMLP

recovers the cost of these facilities through its rates, the

security required shall be reduced accordingly. Specifically,

collateral provided by Shipper related to new facilities shall be

returned to that Shipper in equal Monthly amounts over the term of

its contract for service related to the new facilities or as

otherwise mutually agreed by KMLP and Shipper. Where facilities are

constructed to serve multiple Shippers, an individual Shipper's

obligation hereunder shall be for no more than its proportionate

share of the cost of the facilities. This requirement is in addition

to and shall not supersede or replace any other rights that KMLP may

have regarding the construction and reimbursement of facilities.

 

(e) KMLP may not take any action under this

Section 12.1 which conflicts with any order of the U.S. Bankruptcy

Court.

 

12.2 (a) (1) If at any time KMLP reasonably

determines based on adequate information available to it that a

Shipper is not creditworthy under Section 12.1(a) of these General

Terms and Conditions or if Shipper fails to maintain assurance of