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Grand Chenier Project
Binding Open Season
September 1, 2016 through September 8, 2016
NOTICE OF BINDING OPEN SEASON: ANR Pipeline Company (ANR) is pleased to announce a binding open season for the Grand Chenier Project ("Project") on ANR's pipeline system in Southern Louisiana. The Project's binding open season will commence on September 1, 2016 at 9:00 AM Central Clock Time (CCT) and is scheduled to close on September 8, 2016 at 4:00 PM CCT ("Open Season").
PROJECT OVERVIEW: ANR plans to modify its natural gas transportation facilities to offer up to 700,000 Dth per day of firm transportation service with receipt from ANR's Southeast Head Station to a new delivery point to be located at or near ANR's Grand Chenier Compressor Station ("GC Delivery Point"). ANR has executed a binding precedent agreement with an Anchor Shipper (defined below) that provides ANR sufficient support to move forward with the Project. The purpose of this Open Season is to provide all interested parties the opportunity to bid up to 700,000 Dth per day of Project capacity. The anticipated Project in-service date is June 1, 2019, but path capacity may be available earlier as described on ANR's unsubscribed board.
ANCHOR SHIPPERS: Project anchor shippers may enjoy certain benefits such as limited proration exposure (consistently applied among all qualifying Anchor Shippers), contract extension rights, and other benefits negotiated on a not unduly discriminatory basis. A bidder in the Open season may qualify as an Anchor Shipper by submitting a bid that includes the following minimum terms:
" Twenty (20) year term; AND
" Quantity of 700,000 Dth per day; AND
" Daily negotiated reservation rate of $0.10/Dth
CONTRACT TERM: ANR reserves the right to reject any bids that provide a contract term of less than twenty (20) years.
PARTICIPATION IN THE OPEN SEASON: Unless a party has already executed a precedent agreement for the Project that serves as its binding bid for capacity being offered as part of this Open Season, interested parties wishing to submit a binding bid pursuant to the terms and conditions of this Open Season must complete and sign a Service Request Form (attached) before the close of the Open Season. Upon receipt of a bidder's conforming and signed Service Request Form, ANR will provide bidder with a precedent agreement that must be executed by bidder within ten (10) days of the close of the Open Season. Bidders shall be required to demonstrate creditworthiness pursuant to the requirements of the Project precedent agreement and resulting FTS-1 Service agreement. If a bidder does not execute a precedent agreement, by such deadline, ANR reserves the right to reject bidder's Service Request Form, cease negotiations with bidder, and reallocate the associated capacity. Pursuant to ANR's FERC Gas Tariff, all requests for service for the capacity detailed in this Open Season will be treated under this Open Season.
Bidders are responsible for securing their own transportation arrangements on pipeline or processing facilities upstream and downstream of the designated receipt and delivery point(s), including ensuring upstream connections are able to deliver gas to ANR at ANR's prevailing line pressure, in accordance with ANR's FERC Gas Tariff.
By submitting and signing a Service Request Form, a bidder is committing to proceed in good faith to negotiate and execute a binding precedent agreement with ANR within ten (10) days of the close of the Open Season that incorporates the terms set forth in the bidder's Service Request Form to the extent such terms are acceptable to ANR.
AWARDING OF CAPACITY: ANR will accommodate shipper requests for capacity on the Project by evaluating bids for the purposes of minimizing facility costs, optimizing the combined use of capacity, and evaluating economics on a not unduly discriminatory basis. After the close of the Open Season, ANR will allocate the Project's capacity, and prorate, as applicable, first to bidders who qualify as Anchor Shippers and then, if capacity is still available, to bidders that did not qualify as Anchor Shippers. The evaluation method to be used to determine successful bids is based upon the discounted cash flow of expected revenues per Dekatherm for a term of up to twenty (20) years, using the interest rate set forth in Section 154.67(c)(2) of the FERC regulations.
All successful bidders will be notified by ANR, no later than five (5) days from the close of the Open Season, of their capacity allocation quantities and will be required to execute a binding precedent agreement no later than ten (10) days after the close of the Open Season. A bidder's status as an Anchor Shipper will continue to apply even if the bidder's capacity falls below the minimum applicable quantity required to qualify as an Anchor Shipper due to any pro rata allocation resulting from this Open Season.
PROJECT RATES: Estimated recourse rates for the Project are expected to be the maximum applicable rates under ANR's then-effective FERC Gas Tariff for Rate Schedule FTS-1. Bidder may also submit a daily negotiated rate.
COMMODITY, FUEL AND SURCHARGES: In addition to the Project Rates noted above, successful bidders will pay all applicable demand and commodity surcharges and Transporter's Use under Rate Schedule FTS-1 as provided in ANR's then effective FERC Gas Tariff, including any incremental fuel should the FERC's order require such for the Project.
RESERVATION OF RIGHTS: ANR reserves the right to reject any Service Request Form that (i) is not received by the close of the Open Season, (ii) is not complete and conforming, (iii) contains delayed in-service dates, partial year terms, or other contingencies, (iv) could adversely affect the economics or operational viability of the Project, or (v) contains terms unacceptable to ANR. Further, and without limiting their scope in any way, ANR explicitly reserves the right to (i) conduct additional open season/reverse open seasons, (ii) determine or re-determine the size, scope, and cost of the Project, (iii) not consider bids that do not provide a sufficient level of detail to aid in the development of the Project, (iv) not consider bids that do not present ANR with sufficient economic value, and (v) reject or accept bids or material if received after the close of this Open Season. ANR's decision to proceed with the Project is subject to the Project remaining economically viable pursuant to the terms and condition of the binding precedent agreements.
CONTACT INFORMATION: Interested parties should contact the following ANR personnel to discuss any questions or to seek additional information about this Open Season:
Josh Gibbon
Director, Business Development
(713) 386-3718
jgibbon@cpg.com
For credit related matters:
Rita Homan
Counterparty Risk Specialist
(832) 320-5449
rita_homan@transcanada.com
Grand Chenier Project
Binding Open Season
Service Request Form
Please return this Service Request Form by email on or before on September 8, 2016 at 4:00 PM CCT to Josh Gibbon, Director, Business Development at jgibbon@cpg.com. Please include the phrase "Grand Chenier Project - Service Request Form" in the subject line.
Company: _________________________________________________________
Contact: ___________________________________________________________
Title: ______________________________________________________________
Address: ___________________________________________________________
Telephone: _____________________________ Fax: _______________________
Email: ____________________________________________________________
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Requested Firm Transportation Service Levels
Please express the amount of capacity desired in terms of Dth per day for the Southeast Head Station Receipt Point and the GC Delivery Point.
Primary Receipt Point -
Southeast Head Station - Maximum Daily Quantity - ________________ Dth per day
Primary Delivery Point -
GC Delivery - Maximum Daily Quantity - ________________ Dth per day
Contract Term: ____________ years (ANR reserves the right to reject any bids that provide a contract term of less than twenty (20) years)
Rate:
(Select one)
_____ Daily negotiated reservation rate of _________________ per Dth.
Or
_____ Estimated recourse rate which is to be the maximum applicable rates under ANR's then-effective FERC Gas Tariff for Rate Schedule FTS-1.
Signature of an authorized representative of bidder
By completing and signing this Service Request Form, subject to the acceptance of bidder's request for service and bidder's receipt of notification from ANR of the quantities of capacity allocated to bidder, bidder hereby agrees to enter into good faith negotiations with ANR toward execution of a binding precedent agreement. If bidder has not executed a binding precedent agreement within ten (10) days of the close of this Open Season, then ANR reserves the right to reject bidder's request for service as set forth in this Service Request Form.
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