High Island Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 10/01/2007, Docket: RP06-540-004, Status: Effective

Third Revised Sheet No. 36 Third Revised Sheet No. 36 : Effective

Superseding: Substitute Second Revised Sheet No. 36

 

 

Rate Schedule FT-2

Firm Transportation Service

(Continued)

 

 

Mcf per day or the dekatherm equivalent thereof during any specified

Delivery Period and, further, any increase in MDQ under the FT-2

Agreement shall be subject to availability of firm capacity on the

system as determined by HIOS hereunder. Notwithstanding anything herein

to the contrary, if at any time a federal lessor elects pursuant to its

lease with Shipper to take in kind its royalty share of gas produced

from the Exhibit A leases, Shipper's MDQ shall be adjusted upon thirty

(30) Days written notice by Shipper, to a level that reflects Shipper's

working interest share of gas, net of such royalty gas taken by the

federal lessor. If the federal lessor elects to take royalties-in-kind

for a period of time, and then the federal lessor elects to stop taking

royalties-in-kind, or in the event a federal lessor provides notice to

Shipper of its intent to take royalties-in-kind, but does not actually

take royalties-in-kind, then Shipper's MDQ shall be increased upon

thirty (30) Days written notice by Shipper, to a level that reflects

Shipper's full working interest share of such gas, subject to available

capacity. HIOS reserves the right to require Shipper to provide HIOS

with evidence of the federal lessor's election to take Shipper's gas as

royalties-in-kind, including but not limited to receipts, invoices, or

notices.

 

6.4 After the second contract quarter of the first contract year of any

Service Agreement executed after October 1, 2006, if, over any Delivery

Period during which HIOS' pipeline is not fully subscribed on a firm

basis, Shipper's average daily throughput on HIOS exceeds one-hundred

twenty percent (120%) of Shipper's applicable MDQ for such Delivery

Period (an "Excess Delivery Period"), then HIOS shall have the right to

require Shipper to increase its MDQ for the remainder of the contract

year, and in such event Shipper shall elect for the remainder of the

contract year either: (a) a quantity increased by the percentage

increase in actual shipments under its FT-2 Service Agreement over the

sum of Shipper's applicable MDQs for each day of the Excess Delivery

Period identified by Transporter, or (b) a quantity equal to the

difference between the quantity actually shipped by Shipper under its

FT-2 Service Agreement during the Excess Delivery Period identified by

Transporter and the sum of Shipper's applicable MDQ for each day of such

Delivery Period. Shipper shall be required to make such election upon

receipt of HIOS' notice. Notice of Shipper's election shall be provided

to HIOS by the next Day following receipt of HIOS' notice and the

increase shall become effective on the first Day of the Delivery Period

next following HIOS' notice to Shipper. The increase shall remain in

effect for the remainder of the contract year, at which time the MDQ

previously in effect shall apply, subject to Transporter providing a

subsequent notice hereunder requiring an increase in MDQ for another

contract year. In the event that Shipper fails to make a timely

election following receipt of HIOS' notice, Shipper shall be deemed to

have elected to increase its MDQ in accordance with the methodology set

forth in (a) above.

 

6.5 In the event: (i) firm capacity is required to accommodate new shippers

who have requested firm capacity and such capacity is unavailable, or

(ii) HIOS plans a facility expansion to increase mainline capacity, then

HIOS shall have the right to request an updated production profile from

any shipper, subject to the provisions of Section 6.2, and to adjust, if

applicable, the MDQ of such shipper as set forth in this Article VI.