GENERAL TERMS AND CONDITIONS

(continued)


 


 


 

(a) an advance deposit;


 

(b) a standby irrevocable letter of credit issued by a bank

to Pipeline's satisfaction;


 

(c) security interest in collateral found to be satisfactory

to Pipeline; or


 

(d) a guarantee, acceptable to Pipeline, by another person

or entity which satisfies the credit appraisal criteria

set forth in GT&Cs Section 2.5.


 

If Shipper obtains credit approval by providing an advance deposit or

other credit instrument and then subsequently satisfies the credit

criteria, Pipeline shall return to Shipper any such advance deposit

with interest. Shipper shall continue to provide such advance deposit

or credit instrument for a period of three Months following the

termination of service, unless Shipper pays all of the amounts of any

invoices for service as reasonably determined by Pipeline prior to that

time.


 

For a Service Request on Pipeline's existing facilities, the amount of

the advance deposit, standby irrevocable letter of credit, security

interest or guarantee should at all times equal (a) for firm

transportation service, three Months of reservation charges, and (b)

for interruptible transportation service, three Months of projected

usage charges, at the maximum applicable unit rate hereunder. For a

Service Request for which Pipeline has agreed to construct new

facilities, the amount of the advance deposit, standby irrevocable

letter of credit, security interest or guarantee should at all times

equal (a) where the new facilities will enable Pipeline to serve more

than one shipper, the lesser of the following: (i) an amount equal to

the reservation rate that will be payable by Shipper under its

transportation agreement multiplied by the maximum daily transportation

quantity under such agreement for five years of service thereunder;

(ii) an amount equal to the ratio of Shipper's maximum daily

transportation quantity under its transportation agreement to the total

authorized capacity of the new facilities multiplied by the total

capital expenditures with respect to such authorized transportation

capacity; or (iii) the reservation rate payable by Shipper for the

number of years remaining on the term of its transportation agreement;

and (b) where the new facilities will enable Pipeline to serve only

Shipper, the entire cost of the new facilities.


 

Termination or suspension of service and a Service Agreement does

not affect the validity or requirement of a letter of credit or

guarantee in effect at the time service is terminated or suspended.