W T G Hugoton, LP

Original Volume No. 1

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Effective Date: 08/01/2007, Docket: CP06- 90-002, Status: Effective

Original Sheet No. 242 Original Sheet No. 242 : Effective

 

(e) OBA General Terms and Conditions. If requested by a Shipper, WTG

Hugoton will seek to negotiate an Operational Balancing Agreement ("OBA") with

an entity that operates the facilities interconnecting with WTG Hugoton or

controls supplies entering WTG Hugoton's system at interconnection point

and/or receipt point(s) ("Operator"), as applicable. An OBA is a contract

between two parties which specifies the procedures to manage operating

variances at an interconnect. Such OBA shall comply with the applicable

requirements of NAESB governing such agreements and will be subject to the

following conditions.

 

(i) Quantities nominated by Shipper are confirmed on a reliable

basis by Operator.

 

(ii) Data Acquisition Systems or other monitoring equipment

generally acceptable by industry standards exist at the

interconnection point(s) and/or receipt point(s);

 

(iii) Operator must meet the same creditworthiness standards as

Shipper(s) for whom it is operating on behalf of;

 

(iv) Operator must possess sufficient quantities of gas for it to

balance receipts and/or deliveries under the OBA.

 

An OBA may be subject to certain conditions as follows:

 

(i) Any receipt point imbalance and scheduling penalties

otherwise applicable to Shipper will be applicable to operator

unless WTG Hugoton maintains flow control equipment at the

wellhead receipt or interconnection point(s) under the OBA.

 

(ii) Operator and WTG Hugoton will negotiate in good faith to

agree on a method of valuing imbalances based on market price

indices. The method of valuing imbalances will be applied in a

non-discriminatory manner. Nothing in this section is intended to

restrict WTG Hugoton's ability to either execute an OBA without

market based imbalance evaluation or to terminate such an

agreement for lack thereof. However, OBAs applicable to non-

contiguous facilities shall be resolved by cash in/out.