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ZIA NATURAL GAS COMPANY ADMSIONOF NATURAL GAS PROCESING CO. , " COi'v'JI\/11S·21C);\i 2005 SEP -I Mi II: 28 SECOND REVISED FORM NO. 11 CANCELLING FIRST REVISED FORM NO. 1 TRANSPORTATION SERVICE AGREEMENT Page 1 ofl ADVICE NOTICE NO. 42 4: Mercedes Femandez-Wells Manager of Regulatory Affairs

SECOND REVISED FORM NO. 11 CANCELLING FIRST REVISED FORM ...nmprc.state.nm.us/.../gas/zia-gas-company/forms/form11.pdf · zia natural gas company ... second revised form no. 11 cancelling

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Page 1: SECOND REVISED FORM NO. 11 CANCELLING FIRST REVISED FORM ...nmprc.state.nm.us/.../gas/zia-gas-company/forms/form11.pdf · zia natural gas company ... second revised form no. 11 cancelling

ZIA NATURAL GAS COMPANY ADMSIONOF

NATURAL GAS PROCESING CO.

, "

COi'v'JI\/11S·21C);\i

2005 SEP -I Mi II: 28

SECOND REVISED FORM NO. 11 CANCELLING FIRST REVISED FORM NO. 1 TRANSPORTATION SERVICE AGREEMENT

Page 1 ofl

ADVICE NOTICE NO. 42

4: ~/[ Mercedes Femandez-Wells

Manager of Regulatory Affairs

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ZIA NATURAL GAS COMPANY A DIVISION OF

NATURAL GAS PROCESSING CO.

STANDARD TRANSPORTATION SERVICE AGREEMENT X

This Standard Transportation Service Agreement is entered into this day of , 20 ~ by and between , hereinafter referred to as "Transportation Customer" and Zia Natural Gas Company, a division of Natural Gas Processing Co., hereinafter referred to as the Company.

WITNESSTH

WHEREAS, the Company operates facilities for the transportation of natural gas within the State of New Mexico;

WHEREAS, the Transportation Customer has submitted its Request for Transportation on Company Form No. 10, and its Application Fee, and the Company has x determined Available Capacity exists pursuant to Company Rule No. 33 and the New Mexico Public Regulation Commission (''NMPRC'') Rule 17.10.660.10(b)(I)(a) NMAC; and

WHEREAS, the Company, subject to the terms and conditions set forth herein, is willing to receive natural gas from the Transportation Customer for transportation and x delivery as herein provided; and

WHEREAS, this Service Agreement is entered into pursuant to the terms of the X

currently applicable and effective NMPRC Rule 17.10.660 NMAC, the Company's Rate X

No.6 and Rules 33 and 34, and all other applicable rates and rules of the Company as x approved by the Commission, and all services provided for hereunder are subject to such x rates and rules, and the Transportation Customer agrees to abide by such rates and rules; x

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Transportation Customer and the Company agree as follows:

I. DEFINITIONS

1.1. Btu shall mean the quantity of heat required to raise the temperature of one (1) pound of water one (1) degree Fahrenheit at sixty (60) degrees Fahrenheit.

1.2 Day shall mean a period of twenty-four (24) consecutive hours commencing at 12:00 a.m. (midnight) Mountain Standard Time (MST) or Mountain Daylight Time (MDT).

1.3 MCF shall mean 1,000 standard cubic feet of gas. 1.4 MMBtu shall mean one million Btus or a Decatherm, which is equivalent to

r";;;:;;;:=====~~~~U.L""'~eJ shall mean a period of approximately thirty (30) days as applicable F or purposes of this Contract, the term billing shall mean the

1

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ZIA NATURAL GAS COMPANY A DMSION OF

NATURAL GAS PROCESSING CO.

period commencing on the day of any calendar month and ending on the __ day of the next calendar month.

1.6 Psia shall mean pounds per square inch, absolute. 1.7 Tender shall mean making gas available for receipt and transportation by

the Company at the specified point of tender.

n. RECEIPTS AND DELIVERIES OF GAS

2.1 Subject to the terms and conditions of this Service Agreement, the x Company agrees to transport gas tendered by the Transportation Customer and to deliver equivalent quantities of gas, less designated fuel, lost and unaccounted for gas, up to a Maximum Daily Quantity of MCF. The quantity of gas tendered by the Transportation Customer and received by the Company shall be reduced by the Company's designated fuel and overall lost and unaccounted-for gas percentage as provided for in the Company's Rate No.5. Gas tendered by the Transportation Customer shall meet the quality standards specified in Article V and shall be tendered to the Company for transportation for the account of the Transportation Customer at the receipt point(s) specified on Exhibit 1. Subject to the provisions of Article ill and after adjustments for designated fuel, lost and unaccounted for gas as provided in the Company's Rate No.5, the Company shall deliver the volume of gas received by the Company at the tender point for the account of the Transportation Customer to the designated end-user at the delivery point(s) specified on Exhibit 1.

2.2 Any time after this Service Agreement has been in effect for three (3) X

months or more, the Company may, upon providing the Transportation Customer with ten (10) days written notice, reduce the Transportation Customer's MDQ due to the Transportation Customer's failure to use its contracted-for MDQ; provided however, that the Company shall not reduce the MDQ if the Transportation Customer provides satisfactory written explanation to the Company. The Company's reduction of the MDQ shall be to a level no lower than the following:

(a) One hundred fifty percent (150%) of the Average Daily Take (ADT) for the month with the Highest ADT (HADT) during the Applicable Period. ADT shall be determined by dividing the aggregate daily deliveries for the month by the number of days in such month. (b) For purposes of this section, the "Applicable Period" shall be defined as follows:

(i) The twelve (12) months of transportation service and/or gas sales history immediately preceding the month in which such notice is given; or

(ii) if such history is not available and if more than three (3) r--~m1!'i1;n:~Il1t-IeslH!llan twelve (12) months of this Service Agreement have x

Applicable Period may be based on the available history.

2

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ZIA NATURAL GAS COMPANY A DMSION OF

NATURAL GAS PROCESSING CO.

If the HADT during the Applicable Period is greater than the MDQ, the Transportation Customer shall have the right to request in writing an increase in the MDQ. The Company shall grant such request upon its determination that the requested additional capacity is available. Any reduction or increase in MDQ shall commence on the first (1st) day of the month following notificatiqn to the Transportation Customer of the Company's decision to reduce or increase the MDQ.

-----"---Z~1-----TheTtansportation Customer agrees to use diligent efforts to secure any necessary cooperation of other persons in the transportation chain which can affect the orderly operation of this Service Agreement.

2.4 Transportation service hereunder shall be subject to curtailment and interruption under the Company's Rule No. 21 and Rule No. 32 and any other subsequent rule approved by the Commission concerning curtailments and interruptions.

2.5 Nothing contained herein shall limit either party's right to take any action whatsoever to correct or remedy any potential hazardous situation or condition on such party's system. The party shall immediately give notice of the action to the other party.

2.6 The Transportation Customer warrants and agrees that during the term of this Service Agreement, the Transportation Customer shall not cause directly or indirectly nor assist any end-user receiving gas transported by the Company under the operation of this Service Agreement to have such gas transported to such end-user through facilities not owned or controlled by the Company so long as the Company has facilities that are available and adequate for transportation to such end-user. In the event the Transportation Customer breaches this requirement, the Transportation Customer shall pay the Company, in addition to amounts payable for gas actually transported by the Company under this as liquidated damages equal to the applicable cost of service rate multiplied by the amount of gas transported to such end-user through facilities not owned or controlled by the Company.

m. BALANCING

3.1 The Transportation Customer shall follow the procedures outlined in the Company's Rule No. 31 for daily nominations of gas supply. If the Transportation Customer's gas supplier fails to deliver the daily nominated volumes and has not contracted for Standby Service with the Company, the Company may provide the Transportation Customer with emergency gas at the higher of its Emergency Gas Service Rate in the Company's filed Rate NO.6 or that month's Inside FERC Gas Market Report index price of spot gas delivered to the pipelines (the "Index price") plus transportation costs and any penalties associated therewith, to meet the nominated volumes. The Company shall notify the Transportation Customer within forty-eight (48) hours of the under-delivery, and demand that the Transportation Customer provide an alternative supply within twenty-four (24) hours pursuant to the provisions in Paragraph B of

III-___ ~~~· ~.;U;!oI;!.lL..Io.3.!ol.~ 1. If the Transportation Customer fails to provide an alternative m~~e twj~n1:\'-tOll1 (24) hour period, the Company may terminate service to

~-==i:na1~rnn~M£Ltiald Customer.

3

x

x

x

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ZIA NATURAL GAS COMPANY ADMSIONOF

NATURAL GAS PROCESSING CO.

3.2 If the Transportation Customer's gas supplier delivers more than the nominated volumes, the Company will purchase the difference between the receipts and deliveries at the lesser of that month's Index price or the Company's current tariffrate in accordance with the following scale:

(I) up to and including 5%: 100% of the

applicable price; (IT) greater than 5% but less than or equal to

10%: 90% of the applicable price; (Ill) greater than 10% but less than or equal to

15%: 80% ofthe applicable price; (IV) greater than 15% but less than or equal to

20%: 70% of the applicable price; (V) greater than 20%: 60% of the applicable

price.

3.3 If the Transportation Customer disputes the Company's calculation or basis for assessing an imbalance, the Transportation Customer must notify the Company of the reason the imbalance is in bona fide dispute in writing within ten (10) days of receipt of the Company's notification. Within thirty (30) days after the Company's notification of an imbalance, the Transportation Customer shall agree to the imbalance calculated by the Company and cash out the imbalance in accordance with the above procedures, without prejudice to the Transportation Customer's rights to dispute all or part of said imbalance. If the Transportation Customer does not concede the accuracy of the Company's calculation of the imbalance, it shall furnish sufficient surety bond, guaranteeing the correction of any imbalance ultimately owed to the Company after resolution of the dispute, including late payment charges, which resolution may be reached by agreement or by referral to the New Mexico Public Regulation Commission.

3.4 If the Company receives an invoice from a transporting pipeline which includes an imbalance charge or penalty, within ten (10) days of receipt of the invoice, the Company shall make the initial determination as to whether it or the Transportation Customer caused the imbalance. If the Company determines the Transportation Customer caused the imbalance, the Company shall provide notification to the Transportation Customer of the amount of imbalance charge or penalty with a request for immediate payment. If the Transportation Customer disputes the Company's determination, then the provisions of Paragraph 3.3 above shall be applied to resolve the dispute.

IV. FACILITIES

4.1 Prior to receipt, transportation or delivery of gas hereunder, the Company

•;-~=.;m;;f:t:he~additiOnal meter(s), pressure regulator( s), and other equipment and the Company to render transportation service under this Service

FOR additional meters, pressure regulators, other equipment and facilities the parties shall negotiate a separate agreement for their

/I /A ,-,-,­~,;--"

4

x X

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ZIA NATURAL GAS COMPANY ADMSIONOF

NATURAL GAS PROCESSING CO.

purchase and installation at no cost to the Company, pursuant to NMPRC Rule 17.10.660.10 NMAC. Such additional meters, pressure regulators, other equipment and facilities shall become the property of the Company and shall be operated and maintained by the Company. '

4.2 The Transportation Customer may, at its own expense, install a check ~=m=et:erW~stream of the tender point(s) to the Company's system. In any case, the

meter(s) of the Company shall be the sole and eXCIUSlve means ofdeterminingthe quantities of gas tendered to the Company for transportation under this Service Agreement.

v. QUALITY

5.1 All gas tendered to the Company by the Transportation Customer shall be

x ,

x X

of merchantable quality and be reasonably free of any objectionable material and commercially free from dust, gums or gum-forming constituents, liquids, or solid matter which might become separated from the gas and shall conform to the lesser of the x applicable interstate pipeline quality standards or the following specifications: x

(a) Contain not more than one quarter (114) grain of hydrogen sulfide per one hundred (100)standard cubic feet.

(b) Contain not more than five (5) grains of total sulfur per one hundred (100)

standard cubic feet. (c) Contain not more than one percent (1%) by volume carbon dioxide. (d) Contain not more than two-tenths of one percent (0.2%) by volume of

oxygen. (e) Be commercially free of water or hydrocarbons in their liquid state at the

temperature and pressure at which delivered; and in no event contain water vapor in excess of seven (7) pounds per million cubic feet.

(t) Not be delivered at temperatures in excess of one hundred twenty (120) degrees Fahrenheit nor less than fifty (50) degrees Fahrenheit.

(g) Have a minimum heating value of not less than nine hundred fifty (950) Btus per standard cubic foot, and not more than eleven hundred (1,100) Btu per standard cubic foot.

5.2 If the Transportation Customer's gas fails to meet the above requirements, the Company shall notify the Transportation Customer and the Transportation Customer shall remedy all deficiencies within a reasonable period of time. The Company reserves the right to refuse any deficient gas, particularly if such gas could threaten danger or harm to the Company's facilities, operations or personnel or to the public or the Company's other customers.

AUG 2 3 2005

5

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ZIA NATURAL GAS C01\.1P ANY A DIVISION OF

NATURAL GAS PROCESSING CO.

VI. MEASUREMENT

6.1 Reading, calibration and adjustment of the Company's meters and equipment shall be performed solely by the Company, but may be witnessed by a Transportation Customer's representative.

6.2 Meters and related equipment shall be calibrated by the Company at - reasonable intervals. Any corrections shall be in accordance with NMPRC Rule 17.10.650 x ~C. x

6.3 If for any reason, the Company's metering equipment is inoperable, or if a X

dispute arises over billed volumes under Section X, gas quantities shall be determined by X

the Company using the first of the following methods which is feasible: (a) Using the Transportation Customer's check meter (if any); (b) Using the ascertainable error, calibration or mathematical

calculation; or ( c) Estimating by comparison with deliveries made during preceding

months (under reasonably similar conditions if determinable).

6.4 Measurement shall be in accordance with the Company's normal procedures and accepted industry practice.

6.5 The Company reserves the right to periodically have testing performed by appropriate analysis of gas samples to determine the Btu content or other characteristics of the gas tendered by the Transportation Customer.

VU. CONTROL. OWNERSHIP AND WARRANTIES

7.1 The Company shall be deemed to be in control and possession of the gas while it is being transported or contained in the Company's system.

7.2 The Transportation Customer warrants and represents that it will have title to all gas tendered to the Company and that such gas will be free from any liens and! or adverse claims. The Transportation Customer shall provide reasonable evidence of title if requested by the Company.

7.3 The Transportation Customer represents and warrants that all gas under this Service Agreement shall be consumed in the State of New Mexico. X

7.4 The Transportation Customer represents and warrants that all gas tendered to the Company will be odorized in compliance with 49 CFR 192.625.

7.5 The Transportation Customer represents and warrants that it will pay any applicable third party transportation and/or standby charges for all transportation of gas by parties other than the Company.

7.6 The Transportation Customer agrees to fully indetnnij)r and hold harmless the Company, its officers, agents and contractors from any loss, liabi\\ty or damages, . and attorney's fees, suffered as a result of any claim, action or suit brought

.~.U~'LU"" from any breach by the Transportation Customer or any warranty in r-=~~~reenimt.

6

X

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ZIA NATURAL GAS COMPANY A DIVISION OF

NATURAL GAS PROCESSING CO.

7.7 The Transportation Customer agrees that it shall indemnify and hold harmless the Company, its officers, agents, employees and contractors from any and all losses, liability or damage whatsoever, including costs and attorneys fees, suffered by the Company, its officers, agents, employees or contractors arising, either directly or indirectly, from any claim, action or suit brought by any person, association or entity, public or private, asserting ownership or interest in the gas tendered for transportation

~---~I--------~---.---- tms SerViCe-Agreement. x 7.8 Each party agrees to give the other reasonable notice of any claim, action

or suit brought against it that is subject to the provisions of this Service Agreement. x

vm. TRANSPORTATION CHARGES

8.1 For all gas transported under this Service Agreement, the Transportation Customer shall pay the cost of service rates and other charges for transportation according to the Company's transportation tariff, Rate No.6, and other applicable rates and rules, as such tariffs, rates and rules may be adjusted from time to time by order of the Commission.

8.2 Any additional costs incurred by the Company that result from and are caused by the transportation of gas by the Company for a Transportation Customer shall be assessed to the Transportation Customer ..

IX. TAXES

9.1 The Transportation Customer shall payor cause to be paid all applicable taxes, including fees or charges, now or hereafter levied or assessed by any governmental authority not otherwise included within the Company's transportation rates, including taxes applicable to gross receipts, compensating use, or franchise or on the act, right or privilege of transporting, processing, handling, delivery or use of the gas, which are , measured by volume, heating value, monetary value or sales price of the gas. Such taxes, -fees or charges shall be in addition to the Company's charges as hereinbefore specified.

x. BILLING AND PAYMENT

10.1 The Company agrees that as of the end of each billing month it will determine the transportation charges for gas transported during the previous month. Within a reasonable time thereafter, the Company shall render by first class mail to the Transportation Customer a statement showing the payment due hereunder, including any payments due pursuant to Article ID. The Transportation Customer agrees to make payment to the Company for all amounts so billed by mailing said payment by first class mail within twenty (20) days of the invoice date to:

rFO::.:.:R:.=====~,~Il'I\!~larrl1laJ Gas Company, a division of Natural Gas Processing Co., POBox 541

AUG 2.3 2005 Worland, WY 82401

7

Os--t)OOot/-vr

x

x x x x

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ZIA NATURAL GAS COMPANY A DIVISION OF

NATURAL GAS PROCESSING CO.

10.2 If the Transportation Customer fails to make timely payment ofall amounts so billed, a late payment charge of 1.5 % per month shall be applied to past due amounts, or such rate specified by any Commission approved rule for delinquent accounts, from the date upon which the payment was due. Upon such failure to pay in full, the Company, in addition to any other remedy it may have hereunder, may suspend transportation or deliveries of gas upon five (5) days written notice.

the entire amount of the statement under protest. Within thirty (30) days after receipt of the Transportation Customer's written protest, which shall specify the basis for the dispute and provide support therefore, the Company shall make a full investigation of the matter and if the statement is found to be correct, shall explain the basis for such determination. If the statement is in error, the Company shall promptly submit a correct statement to the Transportation Customer, together with any refund and interest as may be specified by X statute for delinquent accounts. All statements, billings, and payments rendered hereunder shall be final unless questioned within six (6) months from the date of such billing, X

statement or payment.

XL FINANCIAL RESPONSmILITY

11.1 Prior to the delivery of gas pursuant to this Service Agreement, the x Transportation Customer shall:

( a) Provide the Company with a bank letter of credit acceptable to the Company in an amount equal to or greater than charges under this Service Agreement for x the estimated two greatest usage months by Transportation Customer; or

(b) Pay the Company a security deposit for the amount specified in (a) above. The deposit shall be treated as a customer deposit under the Commission approved rules of the Company.

11.2 In the event the Transportation Customer makes an assignment for the benefit of its creditors or any general arrangement with creditors, of if there are instituted by or against the Transportation Customer proceedings in bankruptcy or under any insolvency law, or law for reorganization, receivership or dissolution, the Company may refuse acceptance of tenders of gas and withhold deliveries and/or terminate this Service x Agreement without notice. The Company's exercise of any right under this Service x Agreement shall be without prejudice to any claim for damages or any other legal or equitable right of the Company.

XU. REGULATION

12.1 This Service Agreement shall be subject to all present and future applicable x r-4:M:1i!Wim~~'S;1mJ,ers rules and regulations of the New Mexico Public Regulation x ~~~~~~~~ Lj"'",,",VL for claims relating to damages for personal injury or loss of x

agree that any disputes concerning the terms and conditions of x

8

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ZIA NATURAL GAS COMPANY A DIVISION OF

NATURAL GAS PROCESSING CO.

service, billing, or any other matter specified in this Service Agreement, shall be brought before the New Mexico Public Regulation Commission or its successor agency.

12.2 This Service Agreement and all of its terms and provisions shall at all times be subject to modification by order of the New Mexico Public Regulation Commission upon notice and hearing and a finding of good cause therefor. In the event the New Mexico Public Regulation Commission should take any action which may affect any terms

--~~---or conditIOns Of1liiSsefVic~e-Agreemeht,sucntetms or conditions shall apply to this Service Agreement upon the earlier of the effective date of the governmental action or order or thirty (30) days after the Company provides written notice to the Transportation Customer of such change. In the event the Transportation Customer deems such change unacceptable, in addition to pursuing any other rights available to it, the Transportation Customer may terminate this Service Agreement within ten (10) days of receipt of the Company's written notification. Any changes in the terms and conditions of this Service Agreement pursuant to this paragraph shall not affect the remaining terms and conditions of this Service Agreement. In the event that any party to this Service Agreement shall request the Commission to take any action which could cause a modification in the provisions of this Service Agreement, that party shall provide written notice to the other parties at the time of filing the request with the Commission.

xm. TERM

13.1 Subject to the other terms and provisions hereof, this Service Agreement shall be effective from the date first written above. If the Transportation Customer does not commence to tender gas under this Service Agreement within forty-five (45) days from the date first written above, the Company may terminate this Service Agreement upon five (5) days written notice. Unless otherwise terminated in accordance with the provisions hereof, this Service Agreement shall continue in full force and effect as specified in Exhibit 1.

13.2 The Transportation Customer shall provide thirty (30) days written notice to the Company prior to the date of expiration that it desires to continue taking transportation service. The Transportation Customer shall submit a new Request for Transportation Service on the Company's Form No. 10 and the appropriate application fee.

13.3 The Transportation Customer shall provide thirty (30) days written notice to the Company prior to the date of expiration that it desires to terminate transportation service, and if the Transportation Customer desires to become a Sales or Sale for Resale Customer, then the provisions of Rule No. 35 apply.

13.4 If the Transportation Customer fails or refuses to notify the Company of its intent to continue service pursuant to this Service Agreement, or fails to execute a negotiated transportation service agreement, then it shall be deemed to be a Sales or Sale

r-----...tO~:.es;ale."O'1SUlmeI; until such time as a transportation service agreement agreeable to

m~~~~~~~~::.~~~~~ Should this occur, the cost of gas to the Transportation r actual cost of gas, including any transportation fees, and any other

9

x x X X X

X --~

X

X

X X X X

X X

X

X X

X

X

X

X

X X

X

X X

X X X X

X X X

X

X X

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ZIA NATIJRAL GAS COMPANY A DMSION OF

NATURAL GAS PROCESSING CO.

applicable charges, incurred by the Company to continue to provide service to the Transportation Customer.

XIV. FORCE MAJEURE

14.1 In the event the Transportation Customer or the Company is rendered

x x

.-~~----~------~-.-~~~--.~ or part-:DY force majeure to carry outlrsnb1igations Ulldel this Service x Agreement, it is agreed that upon such party giving notice and full particulars of such X

force majeure in writing, by telephone or by telegraph and followed by written confirmation, to the other party within a reasonable time after the occurrence of the cause relied on, then the obligations of the party giving such notice, so far as they are affected by such force majeure, shall be suspended from its inception and during the continuance of any inability so caused but for no longer period, and such cause shall, as far as possible, be remedied with all reasonable dispatch; provided, however, that the Transportation Customer's obligation to make payments accrued hereunder shall not be suspended. The term of this Service Agreement shall not be deemed lengthened or extended by any period x of force majeure.

14.2 The term force majeure, as employed herein, shall mean acts of god, strikes, lockouts or other industrial disturbances (not including market or similar economic conditions), acts of the public enemy, wars, blockades, insurrections, riots, arrests and restraints of rules and people, civil or military disturbances, explosions, fires, storms, floods, washouts, inability to secure labor, inability of either party hereto to obtain necessary materials, supplies or permits due to existing or future rules, orders and laws of governments or courts, federal, state, tribal or local, present and future orders of any regulatory body having jurisdiction, breakage or accident to machinery or pipelines, the necessity for making repairs, maintenance, or alterations to machinery or pipelines, freezing of wells or pipelines, other unforeseen operational problems and partial or entire failure of gas supply or any other cause (not including market or similar economic conditions), whether of the kind herein enumerated or otherwise, not reasonably within the control of the party claiming force majeure.

14.3 It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party affected, and that the requirement of the use of due diligence in restoring normal operating conditions shall not require the settlement of strikes or lockouts by acceding to the demands of the parties involved in such strikes or lockouts when such course is inadvisable in the discretion of the party affected.

10

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ZIA NATURAL GAS COMPANY A DIVISION OF

NATURAL GAS PROCESSING CO.

xv. NOTICES

15.1 Any notice, request or demand provided for in this Service Agreement or X

any notice which either party may wish to give to the other shall be in writing and shall be considered as duly delivered when delivered in person to the addressee or three (3) days after mailing by registered or certified mail to the addressee, addressed as follows:

TO TRANSPORTATION CUSTOMER: TO THE COMPANY: Janeen Capshaw Zia Natural Gas Company PO Box 541

Telephone: ______ _ VVorland, VVY 82401 Telephone: (307) 347-8221 Fax: (307) 347-3160 Fax: ----------

or at such other address as either party may from time to time designate by providing notice as set forth above. In the event of an emergency, notice may be given by telephone and confirmed in writing delivered as aforesaid within three (3) days of the telephonic

notice.

XVI. MISCELLANEOUS

16.1 A waiver by either the Transportation Customer or the Company of any one or more defaults by the other in the performance of any provision of this Service x Agreement shall not operate or be construed as a waiver of any future default, whether of x a like or of a different character.

16.2 This Service Agreement shall be binding upon and inure to the benefit of x the successors, assigns and legal representatives of the parties hereto as provided in , Section 16.3 below.

16.3 Neither party may assign its rights nor delegate its obligations under this Service Agreement to any entity not affiliated with that party without the prior written x consent ofthe other party, which shall not be unreasonably withheld; provided, however, that in the event the Company shall transfer all or any of its gas operations to a third party which shall continue such gas operations, the Company may assign its rights and delegate its obligations hereunder without prior consent. In the event of such assignment and delegation, the Transportation Customer may at its option terminate this Service x Agreement upon thirty (30) days written notice. x

16.4 Any change, modification or alteration of this Service Agreement shall be x in writing and signed by the parties hereto.

16.5 Except as otherwise stated herein, if any article or provision is declared or i--~rrr.VIl~~aw:futPy a court or regulatory agency with jurisdiction over the parties hereto

because of statutory change, such action shall not affect the ..... "' .. ,H V"Jl.l~a.uVJLl;) that arise under this Service Agreement. X

11

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ZIA NATURAL GAS COMPANY A DMSION OF

NATURAL GAS PROCESSING CO.

16.6 This Service Agreement contains the entire agreement between the parties x and, except as stated herein, there are no promises, agreements, warranties or conditions affecting it.

16.7 This Service Agreement shall be governed by and construed in accordance x with, the laws of the State of New Mexico, subject to the provisions of Section XII.

to be executed by their duly authorized officers of the day, month and year first written above.

TRANSPORTATION CUSTOMER:

(Name), ________ _

By __________________ _

Title ____________ _

STATE OF NEW MEXICO

COUNTYOF _______ _

) )ss. )

THE COMPANY

Zia Natural Gas Company

By _______________ _

Title ___________ _

THE FOREGOING INSTRUMENT was acknowledged before me this ___ __ day of ,20-, by ., with the full authorization of the governing board of ________________ ~

My Commission expires: ________ _

STATE OF

COUNTY OF

) )ss. )

Notary Public

THE FOREGOING INSTRUMENT was acknowledged before me this ___ _ day of , 20-, by , of Zia Natural Gas Company, a division of Natural Gas Processing Co.

12

-t/T

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EXHIBIT 1

TO THE NATURAL GAS TRANSPORTATION AGREEMENT DATED ________________ _

BETWEEN ZIA NATURAL GAS COMPANY Al{O ________________________ __

Receipt Point(s): As exist on upstream transportation contracts.

Maximum Daily Quantity: _______________ _

Delivery Point(s):

Delivery Pressure: As exists due to the pressure as supplied by the upstream transporter( s).

Atmospheric Pressure at Delivery Point: ____ -----

Effective date: __________ _ Term: -----------Application Fee: ____ _

Rates: Rate No. 6: _____ ------__ ~ Negotiated Rate: ______ _ Other charges: __________ _

Zia Natural Gas Company (Transportation Customer)

By: ________________ ---- By: _____________ ~---

Title: _________________ ~- Title: ________ ---Date: ___________________ _ Date: _______________ _