U-T Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 11/01/1993, Docket: RS92- 88-006, Status: Effective

Original Sheet No. 66 Original Sheet No. 66 : Superseded

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

17.11 Qualification for Participation in the Capacity Release Program.

 

(a) In order to qualify for participation in a Prearranged Transaction or to submit a

Qualified Bid for a posted Release Proposal, a prospective Replacement Shipper must

first:

 

(i) Demonstrate, to U-TOS' reasonable satisfaction, that it is creditworthy in

accordance with Sections 2.2(k) and 5 of the General Terms and Conditions of

this tariff; and

 

(ii) Provide to U-TOS a statement of its willingness and ability to: (1) execute a

Transportation Agreement for firm transportation service that conforms to Rate

Schedule FT of this tariff; and (2) become a party to the Gas Allocation

Agreement between U-TOS and its shippers.

 

(b) U-TOS reserves the right to request additional or renewed credit evaluation materials

at any time for the purpose of reviewing a completed creditworthiness evaluation.

 

17.12 Rights and Obligations of the Releasing Shipper and the

Replacement Shipper.

 

(a) General Commitment of Replacement Shipper. By acquiring released capacity, a

Replacement Shipper agrees that it will comply with all of the provisions of this

tariff, the terms and conditions of the executed Rate Schedule FT Transportation

Agreement, and the applicable orders, rules, and regulations of the Federal Energy

Regulatory Commission. The Replacement Shipper shall remain fully liable to U-TOS at

the end of the term of the release transaction for all responsibilities under its

Transportation Agreement with U-TOS, including, but not limited to, all charges

incurred by the Replacement Shipper.

 

(b) Continuing Obligations of Releasing Shipper. The original Releasing Shipper in any

sequence of one or more releases involving the same capacity ("Original Releasing

Shipper") shall continue to be liable for all reservation charges associated with the

released capacity, up to the reservation charge specified in the Original Releasing

Shipper's underlying Rate Schedule FT Transportation Agreement with U-TOS. If any

Releasing Shipper agrees to accept a bid from a Replacement Shipper that specifies a

reservation charge that is lower than the reservation charge under the Transportation

Agreement between the Releasing Shipper and U-TOS, the Releasing Shipper shall remain

liable to pay the balance to U-TOS. By releasing firm capacity to a Replacement

Shipper, the Releasing Shipper recognizes and agrees that such release shall reduce

the Releasing Shipper's firm capacity rights under its underlying Transportation

Agreement with U-TOS during the term of the release, beginning on the effective date

thereof, except for any period that the released capacity is recalled by the

Releasing Shipper.