February 10, 2017
To All Southern Natural Gas Company Shippers
RE: Open Season Announced for Firm Transportation (FT)/Expansion
On February 8, 2017 Southern Natural Gas Company, L.L.C. (“SNG”) in Docket No.
CP17-46 filed an application for authorization to expand its system from a
proposed interconnection with Transcontinental Gas Pipe Line (“Transco”) near
the existing Jonesboro, Georgia interconnection to delivery points on the SNG pipeline
system (“SNG Expansion”). Along with the new interconnection with Transco, SNG
proposes to build a connecting pipeline and a new compressor station to receive
gas from Transco. This is to advise shippers that, as part of the SNG Expansion,
incremental firm transportation capacity will be available on SNG's South Main
Line east of SNG's Gwinville, Mississippi compressor station, including deliveries
to the South Georgia Lateral.
This open season is being made
to solicit non-binding bids from other parties that may wish to participate in
this expansion. The capacity available to be awarded may not be available in
the same increments to all locations along SNG's South Main Line, in particular,
less capacity will be available to delivery pins east of SNG's Ocmulgee
compressor station, and may not be available to particular laterals or delivery
pins. For any bids to be awarded, the aggregate total of all such bids must
reach a minimum of 2,500 dth/day. In addition, the maximum capacity available
east of SNG's Thomaston Compressor Station is limited to approximately 8,000
dth/day and no capacity is available on the SNG North Main Lines.
The incremental firm transportation capacity is expected to
become available no earlier than October 1, 2018. All bids for this capacity
must have a requested start date coincident with the in-service date of the SNG
Expansion facilities. The actual start date shall be subject to receipt of
regulatory approvals by SNG and SNG's construction schedule for the SNG Expansion.
If there are more bids than there is capacity, SNG will
award the capacity from bids received during the open season on the basis of
net present value determined with reference to the rate, volume, term and the
date the service is to commence. In calculating the net present value, a
discounted cash flow factor of 10.24% will be used. Southern will have the
right to aggregate bids in a manner that generates the highest net present
value to Southern.
The open season will commence as of the date and time this notice is posted and
end at 1:00 p.m. CCT on February 27, 2017.
SNG will not consider bids with terms of less than fifteen
SNG reserves the right not to accept, in a not unduly
discriminatory manner among similarly situated bids, any bid that is
uneconomical to SNG; that would require the construction of additional
facilities other than those required to expand SNG's facilities proposed in the
application as part of the SNG Expansion; that would require the construction
of facilities which are disproportionate in cost to the quantity bid; that does
not meet the requirements of these open season guidelines; that contains
unacceptable conditions or contingencies; or that contains a start date outside
the in-service date of the SNG Expansion as stated above. SNG will consider
construction of meter station facilities or modifications on a reimbursable
basis. With the exception of any conditions precedent relating to receipt of
regulatory approvals, Shippers must sign a precedent agreement with SNG and
have removed all conditions to their bids by a date acceptable to SNG.
SNG reserves the right to not accept bids at less than the
maximum tariff rate applicable to this expansion. Seasonal bids for incremental
firm capacity will not be considered in this open season. The actual
reservation rate to be paid by recourse rate shippers will depend on the
ultimate cost and design of the facilities to be included in the SNG Expansion
after all the acceptable bids are taken into account. In addition, Shippers
shall pay applicable commodity charges, surcharges and fuel, including fuel for
deliveries on SNG's system. Only valid requests for service under the terms of SNG's
tariff and under the terms of these open season guidelines will be considered. In
the precedent agreement Southern will require each shipper to meet certain
minimum financial criteria (the “Creditworthiness Test”) in order to proceed
with the expansion opportunity.
Receipt point shifts for existing packages of capacity from SLNG Elba
Island to the new Transco-Fairburn Interconnection will be accepted as part of
the open season, even if such packages are seasonal.
Shippers may submit bids to SNG for FT service by completing a standard
transportation request form for FT service and faxing it to the attention of
Darryl Outlaw at (205) 325-3587 or emailing it to FTServiceRequest@kindermorgan.com.
Please call your account manager if you need an FT Request Form or you can
paste the following link in your browser and then click on SNG Service Request.
On the request form, Shippers should indicate the term
(start and end date), quantity (in Dth/d), and delivery points on SNG's system,
either existing or proposed, with the corresponding volume being bid. The
receipt point will be the proposed new interconnection with Transco.
Shippers should indicate in their bids the minimum volume of
capacity they are willing to take in the event the full contract quantity of
the bid is not available or if SNG must prorate the bids. If a bid is submitted
in excess of the available capacity and the bids must be prorated, the bid in
excess of the available capacity will be prorated as though the bidder bid for
the maximum available capacity to be awarded.
SNG will take no longer than ten (10) business days to notify Shippers of bid
awards. Shippers that have not executed a precedent agreement with SNG by the
close of the open season will be required to do so within ten (10) business
days of the award notice.
If you have any questions regarding the Open Season, please contact your
Account Manager or Devy Traylor in Business Development at 205-325-3524.