High Island Offshore System, L.L.C.
Third Revised Volume No. 1
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Effective Date: 06/01/2004, Docket: RP04-288-000, Status: Effective
First Revised Sheet No. 223 First Revised Sheet No. 223 : Effective
Superseding: Substitute Original Sheet No. 223
NGL BANK AGREEMENT (Continued)
2.2 Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in Transporter's FERC Gas Tariff.
2.3 Notwithstanding Section 2.2 above, for purposes of this Agreement a Point of
Receipt is a location where gas is measured to determine Transporter's receipts
from one or more shippers.
ARTICLE III - TERM
This Agreement shall be effective as of ________________________, and shall remain in
full force and effect for the effective term of a Transportation Agreement between
Transporter and Shipper. In the event that there is more than one Transportation
Agreement between Transporter and Shipper, then this Agreement shall remain in full force
and effect until the termination of the latest of any of such Transportation Agreement.
ARTICLE IV - SHIPPER PARTICIPATION
4.1 Participation. Shipper agrees to (i) participate in the NGL Bank as a condition
of receiving service on HIOS in accordance with Shipper's Transportation
Agreement, this Agreement and Transporter's FERC Gas Tariff, (ii) participate in
the NGL Bank, either in person or through its agent holding processing rights to
Shipper's gas, with the relevant agency agreement provided to Administrator
prior to said agent's participation in the NGL Bank on behalf of Shipper, (iii)
make settlements in accordance with the provisions of Article V of this
Agreement, and (iv) pay the administrative fees billed by Administrator to
Shipper for administration of the NGL Bank pursuant to Article V of this
4.2.a Advisory Group. Administrator shall establish the HIOS NGL Bank
Advisory Group ("Advisory Group") to provide a forum to discuss,
consider and determine material NGL Bank issues if, and when, they
arise, including but not limited to, making adjustments authorized by
this Agreement. In making any adjustments authorized by this Agreement,
the objective of the Advisory Group shall be to ensure that the NGL Bank
functions to mitigate inequities in gas processing economics for all
shippers on HIOS to the extent reasonably practicable and consistent
with the terms of this Agreement. The Advisory Group initially shall
consist of the top seven shippers, or their respective agents, of the
largest volume of gas, expressed in Dekatherms ("Dth"), during the
previous six months ending April 30, 2004. Each such shipper or its
agent shall appoint a single representative to serve on the Advisory
Group. Each shipper or its agent may replace its representative on the
Advisory Group by notice to Administrator. Beginning June 1, 2005, and
annually thereafter, Administrator shall redetermine the top seven
shippers, or their respective agents, for the previous six months ending
April 30 and the membership of the Advisory Group shall be altered
accordingly, if necessary.
4.2.b Adjustment Rights. The Advisory Group shall have the right to adjust
the settlement components set forth in Section 5 of this Agreement,
specifically including but not limited to: (1) the NGL component
recovery factors, settlement basis, prices and deductions used to
determine the Theoretical Revenue; (2) the prices, rates and factors
used to determine the Shrinkage Cost; and (3) the prices, rates and
factors used to determine the Fuel Cost.
4.2.c Meetings. Administrator will chair the Advisory Group, record,
distribute and maintain minutes of every meeting, and convene meetings
no less often than annually, in person or electronically as needed. The
first such meeting shall be convened during the month of September 2004.
The Advisory Group shall review the items set forth above to perform the
settlement calculations hereunder, and adjust such items as necessary to
be representative of the operating parameters of the downstream Plants.