High Island Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 04/01/2007, Docket: RP07-575-000, Status: Effective

Second Revised Sheet No. 225 Second Revised Sheet No. 225 : Effective

Superseding: First Revised Sheet No. 225

 

 

NGL BANK AGREEMENT (Continued)

 

 

For purposes of this Agreement, the representative sales price for each

NGL component shall be based on the monthly average of the daily average

of the high and low Mt. Belvieu price quotes as published by the Oil Price

Information Service (or like publication if no longer available) for the

month of production as follows:

 

i. Ethane Purity

ii. Propane Non-TET

iii.Isobutane Non-TET

iv. Normal butane Non-TET

v. Natural gasoline Non-TET

 

The sales price for each NGL component shall be reduced by four cents

($.04) per gallon for NGL transportation and fractionation. Such NGL

component recovery factors, settlement basis, prices and deductions used

to determine the Theoretical Revenue may be adjusted by the Advisory Group

as needed to be representative of the operating parameters of the

downstream Plants.

 

5.1.b NGL Bank settlements shall be calculated for each Point of Receipt on

HIOS for each shipper by subtracting the "Shrinkage Cost" and the

"Fuel Cost" for each Point of Receipt from the Theoretical Revenue for

each shipper's NGL components at each Point of Receipt.

 

Shrinkage Cost shall be defined as the sum of the products derived when

multiplying the "Heat Content" for each of the NGL components by the

"Value of the Btu's" and by the respective gallons for each of the

adjusted NGL components and adding eight tenths percent (0.8%) to the

result for the pipeline fuel portion of fuel and shrinkage transportation

cost. The Heat Content for the NGL components shall be as set forth under

the heading "Gross Heating Value, Btu/gal, fuel as ideal gas" in the most

recent GPA Standard 2145, currently Standard 2145-03. For hexane and

heavier hydrocarbons, however, the Heat Content shall be the sum of the

products derived by multiplying the hexane Heat Content by 50% and by

multiplying the heptane Heat Content by 50%.

 

Fuel Cost shall be defined as the product of multiplying the Value of the

Btu's by 16,000 Btu's of fuel used per gallon and by the total Theoretical

NGL Recovery gallons and adding eight tenths percent (0.8%) to the result

for the pipeline fuel portion of fuel and shrinkage transportation cost.

 

Effective April 1, 2007, Fuel Cost shall be defined as the product of

multiplying the Value of the Btu's by 12,800 Btu's of fuel used per gallon

and by the total Theoretical NGL Recovery gallons and adding eight tenths

percent (0.8%) to the result for the pipeline fuel portion of fuel and

shrinkage transportation cost.

 

For purposes of this Agreement, the Value of the Btu's shall be determined

monthly based on the numerical average of the index price quotes published

in the first issue of Inside FERC's Gas Market Report (or like publication

if no longer available) for the month of production, under the heading

"Prices of Spot Gas Delivered To Pipelines" for the following indices:

 

(1) ANR Pipeline, Louisiana

(2) Florida Gas, Zone 1

(3) NGPL, Louisiana

(4) Tennessee Gas, Louisiana, 800 Leg

(5) Transco, Zone 2