July 15, 2019
To All Southern Natural Gas Company Shippers RE: Open Season Announced for North System Firm Transportation
This is to announce an open season for bids for approximately 5,000 dth/day of short-term firm transportation capacity (“FT”) that is operationally available from October 1, 2019 through April 30, 2020 on the north system of the Southern Natural Gas Company, L.L.C. ("Southern”) pipeline system. This capacity is available from receipt pins as far west as those on Segment 50 which includes Tex Gas/SNG Kosciusko Attala (PIN #609000) and TET/SNG Kosciusko Attala (PIN #49128) and any receipt pins downstream of this location along Southern's north system. This capacity is available to delivery pins on the north system that are downstream of this location, including those pins on the Chattanooga lateral.
The capacity available to be awarded may not be available in the same increments to all locations along Southern's north system and may not be available along particular laterals or at certain receipt or delivery pins. Please note that this capacity is not available from receipt pins on Southern's south main system. Any bid with a start date earlier than October 1, 2019 or for an ending date later than April 30, 2020 will be rejected. Southern reserves the right to reject any bids at less than maximum tariff rate.
The open season will commence as of the date and time this notice is posted and end at 10:00 a.m. CCT on August 6, 2019.
Shippers may submit bids to Southern for FT service by completing a standard transportation request form for FT service and 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. http://pipeportal.kindermorgan.com/PortalUI/CommonForms.aspx?TSP=SNGD
On the request form, Shippers should indicate the term (start and end date within the date range being offered), quantity (in dth/d), rate, delivery pins, and receipt pins being bid. Only valid requests for service under the terms of Southern's Tariff will be considered. All bids will be considered binding and, if accepted, Southern shall have the right to charge the winning bidder for the capacity awarded under the terms of the bid. The term of the service package will not contain an evergreen provision and the firm capacity available to be awarded may be restricted to a uniform hourly flow rate, depending on the location.
Southern will award the capacity from bids received during the open season on the basis of net present value (“NPV”) determined with reference to the rate, quantity, term and the date the service is to commence. Shippers may increase their NPV by bidding to buy supplemental capacity which is available in other locations on the system, such as capacity that is available from receipt pins at the Elba Island LNG Terminal, the SNG-Elba Express Interconnects, or the FGT-Suwanee Interconnect to various delivery pins. The restriction on the term is only limited to the 5,000 dth/day of operationally available capacity and does not limit the term a shipper may bid on any supplemental capacity in order to increase its net present value. In addition, Shippers currently receiving discounted FT service may increase the NPV of their bids by increasing their discounted rate for a period of time stated by the shipper in its bid. Please note that offers to extend the term of existing firm contracts will not be utilized as consideration in calculation of the NPV in this open season.
In calculating the net present value, Southern will use a discounted cash flow factor of 10.24%. Southern will have the right to aggregate bids in a manner that generates the highest net present value to Southern. Comparable winning bids that cannot be awarded in full will be awarded on a pro rata basis. 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 Southern must prorate the bids. Shippers should also indicate in their bids if their bid is contingent upon being awarded the full term of the bid or if they will accept a partial term. 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. Southern will take no longer than ten (10) business days to award the bids. This open season is subject to the terms of Section 2.1 (b) of the General Terms and Conditions of Southern's Tariff. If you have any questions regarding the Open Season, please contact your Account Manager or Darryl Outlaw at 205-325-7421. SNG Marketing