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Midwest Market Access Project
Non-Binding Open Season
January 3, 2017, through January 31, 2017
Providing the Midwest markets with access to abundant Marcellus and Utica Shale gas supplies by leveraging TransCanada's existing regional footprint via its ANR Pipeline ("ANR") and Crossroads Pipeline ("XRDS") systems.
NOTICE OF OPEN SEASON
ANR is pleased to announce a project that links Marcellus and Utica shale production to markets in the Midwest by leveraging ANR and XRDS' existing footprint.
OVERVIEW
ANR is announcing this non-binding open season ("Open Season") to solicit interest in its Midwest Market Access Project ("MMAP"). Specifically, MMAP will provide seamless firm transportation service pursuant to ANR's FTS-1, ETS and FTS-3 rate schedules from receipt points in ANR's ML-3 Zone, including the proposed Westrick interconnection with the Rover Pipeline LLC ("Rover") near Defiance, Ohio, as well as an existing point of receipt with the Rockies Express Pipeline, LLC ("REX") at Shelbyville, Indiana, with deliveries to markets north of ANR's Bridgman compressor station on ANR's Michigan Leg North ("MLN") segment and/or markets west on ANR's Michigan Leg South ("MLS") segment to the Joliet Hub ("Project"). The Project's estimated capacity of 225,000 Dth per day will utilize existing capacity along TransCanada's XRDS system in Ohio and Indiana via a lease between ANR and XRDS. The Project may be able to accommodate more volumes based on certain receipt to delivery point combinations and market support. ANR reserves the right to adjust the Project's size and scope based on market response. While the estimated in-service date for the Project is November 1, 2020, interim service may be available on a limited basis as early as 2019, depending on location of receipt and delivery points.
ANCHOR SHIPPER STATUS
Shippers who execute a binding precedent agreement for a minimum capacity of 225,000 Dth per day at a $12.775/Dth-month reservation rate ($0.42/dth per day unit rate) and a minimum term of 20 years shall receive anchor shipper status. Anchor shippers may enjoy benefits such as contract extension rights, limited capacity proration exposure, favorable cost sharing terms, interim service, negotiated fixed rate and other benefits on a not-unduly discriminatory basis.
CONTRACT TERM
The minimum required contract term is 15 years, and ANR reserves the right to reject bids that offer a contract term of less than 15 years.
LENGTH OF OPEN SEASON
This Open Season will begin at 5:00 PM CDT, January 3, 2017, and close at 5:00 PM CDT, January 31, 2017.
PARTICIPATION IN THE OPEN SEASON
To participate in this Open Season, interested parties desiring firm transportation capacity in the Project should complete an Open Season Request Form (attached), with specific attention to the primary term of service, service commencement date, firm capacity requested, rate for service (as set forth herein) and desired receipt and delivery point combination prior to 5:00 PM CDT on January 31, 2017.
After the close of this Open Season, ANR will follow-up with interested parties submitting a non-binding bid to determine next steps with respect to allocation of Project capacity and execution of a binding precedent agreement for further development of the Project.
ANR reserves the right to immediately negotiate and enter into binding precedent agreements with parties that participate in this Open Season and may or may not elect to hold any further open seasons related to the Project. Priority will be given to those shippers' bids with the highest overall economic value to the Project, as determined by ANR in its sole discretion. It is anticipated that binding precedent agreements will be executed with interested parties on or before February 28, 2017.
SUPPLY AND POINTS OF RECEIPT
ANR is responding to the continued incremental market growth in the Midwest by matching this growth with connectivity to pipelines directly connected to the Marcellus and Utica shale production areas. The MMAP offers primary receipts from 1) the proposed Westrick interconnect with Rover near Defiance, Ohio ("Westrick"), 2) the existing REX interconnect in Shelbyville, Ohio ("Shelbyville") and 3) other mutually agreeable receipt locations.
MARKET AND POINTS OF DELIVERY
The MMAP offers primary firm deliveries to markets north of ANR's Bridgman compressor station on ANR's MLN segment and/or markets west on ANR's MLS segment to the Joliet Hub. ANR may also consider other mutually agreeable delivery locations.
RATES, TRANSPORTER'S USE AND SURCHARGES
Ultimate recourse rate(s) will be a function of the final MMAP facilities, binding precedent agreements, receipt to delivery transportation paths and subscription levels. Indicative negotiated reservation rates for the MMAP are as follows:
Anchor Shippers
$12.775/Dth per month reservation rate ($0.42/Dth per day unit rate) subject to a minimum quantity of 225,000 Dth/d and minimum term of 20 years pursuant to ANR's ETS rate schedule at a 1/24th hourly rate
Non-Anchor Shippers
$13.992/Dth per month reservation rate ($.46/Dth per day unit rate) subject to a minimum quantity of 5,000 Dth/d and minimum term of 15 years pursuant to ANR's FTS-1, ETS or FTS-3 rate schedules, at a 1/24th hourly rate
MMAP shippers shall pay the maximum applicable commodity rates, as well as reservation and commodity surcharges under ANR's ETS rate schedule as provided in ANR's then effective FERC Gas Tariff.
In addition to the above rates, MMAP shippers shall pay the applicable Transporter's Use and Transporter's EPC pursuant to ANR's then effective FERC Gas Tariff.
PROJECT MAP
CREDIT REQUIREMENTS
Prospective shippers shall be subject to the creditworthiness requirements of the MMAP precedent agreement.
PROJECT CONSTRUCTION RISK COST SHARING
ANR anticipates that precedent agreements will include a limited construction cost risk sharing mechanism.
EVALUATION CRITERIA OF SHIPPER REQUESTS
ANR will evaluate individual bids based on the total impact on and optimization of Project economics and/or operational viability as determined by ANR in its sole discretion on a not unduly discriminatory basis. ANR reserves the right to reject and remove from consideration non-conforming bids, bids that have a delayed in-service requirement or other contingencies, bids that require a contract with a partial-year term, or fail to meet the minimum terms set forth above with regards to rate, contract term, or any other economic criteria which could adversely affect the optimization of the economics or operational viability of the Project. ANR reserves the right to define and maintain the economic viability of the Project at all times in its sole discretion, and ANR retains the right to enter into negotiations during this Open Season with those parties who express interest in the Project.
Interested parties are responsible for securing their own transportation arrangements on pipelines upstream and downstream of the designated receipt and delivery points.
These procedures and the attached Request Form are provided solely to enable interested parties to participate and attempt to obtain capacity in the proposed Project. ANR's decision to proceed with the proposed Project is subject to receiving a level of binding precedent agreements, that in its sole discretion, ANR determines to be acceptable.
ANR explicitly reserves the right to (1) conduct additional open seasons/reverse open seasons; (2) determine or re-determine the size, scope, and cost of the Project; (3) not consider bids that do not provide a sufficient level of detail to aid in the development of the Project; (4) reject bids that do not present ANR with sufficient economic value and/or (5) reject or accept bids and/or material it receives after the close of this Open Season. ANR also reserves the right to reject non-conforming and/or contingent bids and bids from any party that does not qualify for service in accordance with all applicable provisions of ANR's FERC Gas Tariff.
SOLICITATION OF TURNBACK CAPACITY/ REVERSE OPEN SEASON
Existing shippers on ANR desiring to turn back capacity they believe may be used as a substitute to construction of new facilities for the Project are invited to fill out the Open Season Request Form and advise ANR of their desire to turn back capacity by checking the appropriate space on the form. Such notification must specify the contract number, primary receipt and delivery points, and the capacity the shipper is offering to turn back. For those submitting a proposal in the reverse open season, a completed Request Form should be completed and received prior to 5:00 PM CDT on January 13, 2017. ANR will consider and evaluate offers of turnback capacity which may reduce the facility scope of the proposed Project or satisfy services similar to those proposed herein in terms of location, term, and price. However in ANR's sole discretion, any capacity turnback proposal(s) would have to be compatible, economically accretive, and directly offset facilities that ANR proposes to construct or modify to satisfy requests for capacity during the Open Season.
ANR CONTACTS
If any interested party has questions or desires additional information concerning this notice and Open Season, please contact:
Lynn Cannon
(414) 617-5029 Lynn_Cannon@TransCanada.com
Josh Gibbon
(832) 320-5647 Josh_Gibbon @ TransCanada.com
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MIDWEST MARKET ACCESS PROJECT
OPEN SEASON
REQUEST FORM - Page 1
This Request Form is subject to the requirements, conditions, and reservations set forth in the accompanying open season notice. Please complete all sections of the form and return this non-binding Open Season Request Form by email on or before the dates listed below.
Project Open Season Reverse Open Season
5 PM CDT, January 31, 2017 5 PM CDT, January 13, 2017
Email: Lynn_Cannon@TransCanada.Com (Please include the phrase "MMAP Response" in the subject line)
MMAP Capacity ? Turnback Capacity ?
Company: ____________________________________________________________
Contact: ____________________________________________________________
Title: ____________________________________________________________
Address: ____________________________________________________________
Telephone: _______________________ FAX: _______________________________
Email: ______________________________________________________________
Service Commencement Date (month/day/year): ____________________________
Contract Term: ________ years
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MIDWEST MARKET ACCESS PROJECT
OPEN SEASON
REQUEST FORM - Page 2
Requested Project Firm Capacity Levels
Please indicate the amount of capacity desired in terms of Dths per day for each desired Primary Receipt Point to Primary Delivery Point combination, as well as the applicable negotiated rate (i.e. Anchor vs. non-Anchor) that would be of interest to shipper. For avoidance of doubt, if shipper is interested in the Project's recourse rate (to be determined), then please indicate by filling in the words "Project Recourse Rate" in the last column in the table below.
Rate Schedule Primary Receipt Point Primary Delivery Point Maximum Daily Quantity (Dth/day) Daily Negotiated Demand Rate or Project Recourse Rate
Requested Turnback Firm Capacity Levels
Please indicate the desired amount of capacity turnback in terms of Dths per day for each desired Primary Receipt Point to Primary Delivery Point combination. Please specify the contract number, primary receipt and delivery point, and the turnback capacity level in the table below.
ANR
Contract Number Primary Receipt Point Primary Delivery Point Turnback Capacity (Dth/day)
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MIDWEST MARKET ACCESS PROJECT
OPEN SEASON
CREDIT INFORMATION FORM
Bidders who do not already have a credit relationship established with ANR should return this Credit Information Form with the Open Season Request Form by email on or before the close of the Open Season to:
Attention: Rita Homan
Email: Rita_Homan@TransCanada.com
Company Name: ________________________________________________________________________
Credit Contact Name: ___________________________________________________________________
Credit Contact Phone Number: ________________________________________________________
Credit Contact E-mail Address: ________________________________________________________
Street Address: ___________________________________________________________________________
City: ________________________________________________________________________________________
State: ______________________________________________________________________________________
Zip Code: ___________________________________________________________________________________
Please provide complete fiscal year-end audited financial statements for the prior two years and any available interim financial information. Additional information may be necessary in order for ANR to evaluate bidder's creditworthiness status in accordance with the MMAP precedent agreement.
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