February 16, 2017
To All Southern Natural Gas Company Shippers
RE: Open Season Announced for Firm Transportation (FT)/Expansion
This is to announce an open season to solicit non-binding bids for firm
transportation service ("FT") in Zone 0 and Zone 1 of the Southern
Natural Gas Company, L.L.C. (“SNG”) system from SNG's interconnection with
Tennessee Gas Pipeline (“TGP”) near Rose Hill. SNG is considering modifying certain
facilities to increase its ability to receive gas from TGP by approximately
250,000 dth/day (“Rose Hill expansion facilities”). Incremental firm
transportation capacity will be available from Rose Hill to delivery points on
SNG's south system upstream of SNG's Enterprise Compressor Station as far upstream
as its interconnect with Florida Gas Transmission at Franklinton, its
interconnects with ANR, Columbia Gulf, Trunkline, and Gulf South at Shadyside,
and its interconnect with Sabine near Henry Hub. SNG is also soliciting
non-binding bids from shippers interested in amending their current primary
receipt pins from locations upstream of SNG's Bay Springs Compressor Station to
SNG's interconnect with TGP at Rose Hill. The capacity available to be awarded
may not be available in the same increments to all locations along SNG's south
system and may not be available in particular laterals or at certain receipt or
delivery pins. This proposed expansion does not offer any expanded capacity
east of SNG's Enterprise Compressor Station.
This open season is being made
to solicit non-binding bids from any parties that may wish to participate in
The incremental firm transportation capacity is expected to
be available by November 1, 2018. All bids for this capacity must have a requested
start date no earlier than the in-service date of the proposed Rose Hill
expansion facilities. The actual start date shall be subject to receipt of contracts
for adequate capacity to support the project, regulatory approvals by SNG and SNG's
construction schedule for the Rose Hill expansion facilities.
If bid capacity exceeds available 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. SNG will have the right to aggregate
bids in a manner that generates the highest net present value to SNG. Receipt
Point Pin shifts will be given an NPV of zero unless a Shipper elects to extend
the term of its existing firm transportation packages or elects to increase its
discounted or negotiated rate that is less than the maximum rate to the maximum
tariff rate or to a discounted or negotiated rate that is more than the existing
discounted or negotiated rate.
The open season will commence as of the date and time this notice is posted and
end at 3:00 p.m. CCT on March 24, 2017.
SNG will not consider bids with terms of less than ten (10)
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 the Rose Hill expansion facilities; 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 Rose Hill expansion
facilities as stated above. 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
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 Rose Hill expansion facilities 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
Receipt point shifts for existing packages of capacity 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/day), and delivery points on SNG's
system, either existing or proposed, with the corresponding volume being bid.
The receipt point will be the Rose Hill interconnection with TGP. If a Shipper
requests a receipt point shift to the Rose Hill interconnection, it should also
note the receipt point it is requesting to shift from.
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 thirty (30) 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.