Caledonia Gas And Storage

Original Volume No. 1

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Effective Date: 05/01/2007, Docket: CP05- 15-003, Status: Effective

Original Sheet No. 41 Original Sheet No. 41 : Effective

at all times be entitled to all applicable services specified under the

Service Agreement, subject however, to the pressure requirements and

such other terms and conditions hereof as may be applicable; (b) Caledonia

shall, as soon as practicable after the occurrence of any such Caledonia-Caused

Imbalance, cause the imbalance to be remedied by either injecting Gas into the

Facility or withdrawing Gas from the Facility, such that any Caledonia Pipeline

Imbalance is remedied and the relative Gas Storage Balance Accounts of Customer

and Caledonia at the Facility are brought back into balance; and (c) Caledonia

shall indemnify and hold Customer harmless from and against all costs and

penalties that may be assessed by any third person (whether a Pipeline or other

person) and any other losses that may ensue as a result of the occurrence of any

such Caledonia-Caused Imbalances.

6.2 Customer-Caused Imbalances. The Parties recognize and acknowledge that if,

from time to time, Customer fails to deliver Gas to Caledonia or to accept

delivery of Gas from Caledonia in accordance with Customer’s nominations made

pursuant to the scheduling procedures (Customer Receipt/Delivery Failure), then

Customer or Caledonia may incur an imbalance on one or more pipelines (Customer

Pipeline Imbalance). Both Caledonia and Customer recognize and agree that, if

as a result of a Customer Receipt/Delivery Failure, either (i) a Customer

Pipeline Imbalance occurs and as a result thereof, any Pipeline assesses an

imbalance penalty, fee or other charge; or (ii) a Storage Operational Imbalance

occurs and as a result thereof, Caledonia suffers or incurs any penalties,

charges or other costs assessed by any person (whether a Pipeline, another

customer of Caledonia, of any other person), or Caledonia incurs any other

losses or liabilities, then Customer shall indemnify and hold Caledonia

harmless from and against all such penalties, charges, costs, liabilities and

other losses as the result of the occurrence of any such Customer

Receipt/Delivery Failure.

7. GAS PRESSURE, QUALITY AND MEASUREMENT

7.1 Gas Pressure. Caledonia shall redeliver Gas to Customer at pressures

sufficient to enter the Third Party Transporter’s facilities at the Point(s) of

Delivery against the operating pressures maintained by such Third Party

Transporter(s). Caledonia shall not be required to redeliver gas at pressures

in excess of or below those required by Third Party Transporter(s) or in excess

of Third Party Transporter(s) maximum allowable operating pressure (MAOP).

Customer shall deliver or cause to be delivered to Caledonia all Gas at the

Point(s) of Delivery at such pressures as may exist from time to time in the

Third Party Transporter’s system.

7.2 Quality. Gas delivered by or on behalf of the Customer to Caledonia shall

conform to the Third Party Transporter’s gas quality standards. In the event

that Gas scheduled for Delivery by Customer fails to meet such quality

specifications, Caledonia shall have the right to refuse to accept Delivery of

such Gas for so long as such condition exists. Gas redelivered by Caledonia

shall conform to the Third Party Transporter’s quality standards; provided,

however, that if the Gas tendered for Delivery to Customer by Caledonia is

substantially the same quality in all material respects as the quality of Gas