Tennessee Gas Pipeline Company


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Effective Date: 11/01/2000, Docket: RP01- 20-000, Status: Effective

Seventh Revised Sheet No. 323 Seventh Revised Sheet No. 323 : Effective

Superseding: Sixth Revised Sheet No. 323





10.4 Right-of-First Refusal and Extension of Long Term Firm Service Agreements -


10.4.1 Unless Transporter and Shipper expressly agree otherwise in Shipper's

service agreement, this Article III, Section 10.4 shall apply only to

long term firm service agreements at the applicable maximum rate or to

long term firm service agreements entered into prior to March 27, 2000

(qualifying agreement(s)). A Shipper holding a qualifying agreement may

exercise a right-of-first refusal in accordance with, and subject to, the

procedures and limitations set forth below; provided, however, that if

the qualifying agreement is at a negotiated or less than maximum rate,

such agreement must be extended at the applicable maximum rate for a term

of one year or more in order to retain a right-of-first refusal beyond

the extended term. Unless Transporter and Shipper expressly agree

otherwise in Shipper's service agreement, a right-of-first refusal does

not apply to negotiated rate arrangements, to firm service agreements at

less than the applicable maximum rate, to firm service agreements with a

term of less than one year or to a geographic portion of the

transportation service.


10.4.2 Except as provided in Section 10.4(e) and Section 10.5 below and except

as provided in Section 8 of Rate Schedule FT-BH, the following procedure

shall govern extensions of qualifying agreements:


Transporter shall provide notice to a Shipper receiving service from

Transporter pursuant to Part 284 of the Commission's regulations under a

qualifying agreement thirteen (13) months prior to the expiration of the

Agreement's primary term. Unless Shipper then elects upon one year's

prior written notice to Transporter to terminate the Agreement or to

request a lesser extension term, the Agreement will automatically extend

upon the expiration of the primary term for a term of five years.

Thereafter the Agreement shall repeatedly extend for successive five year

terms unless Shipper provides notice as described above in advance of the

expiration of a succeeding term. If a Shipper elects to extend a

qualifying agreement, or any portion of its contract quantity thereunder,

for less than the automatic extension period provided therein as

described above, then Transporter, at its option and in a manner which is

not unduly discriminatory, shall either accept Shipper's requested

extension period or shall require Shipper to exercise its right-of-first

refusal by making the capacity under such agreement available in

accordance with the following procedures:


(a) Transporter shall post the capacity for bidding on PASSKEY no

later than 180 days prior to the expiration of the current service

agreement. Transporter shall provide 30 days prior written notice

to Shipper of the date the capacity will be posted. The capacity

will remain posted on PASSKEY for a minimum of 20 days with such

posting containing the following information with respect to the



(1) daily and other applicable quantity limitations of capacity



(2) receipt and delivery points;


(3) maximum reservation charge as set forth in the Summary of

Rates and Charges in Transporter's FERC Gas Tariff;


(4) any applicable restrictions; and


(5) the last day of the Bidding Period, which will terminate no

later than 45 days prior to the termination date of the

original service agreement.