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TSP/TSP Name:  6900518-SOUTHERN NATURAL GAS CO. Critical: N
Notice Type Desc (1):  TSP CAPACITY OFFERING Notice Type Desc (2):  TSP CAP OFFERING
Notice Eff Date/Time:  10/12/2020 10:01:59AM Notice End Date/Time:  12/31/2049 9:00:00AM
Post Date:  10/12/2020 10:01:59 AM Notice ID: 704951
Reqrd Rsp:  5 Notice Stat Desc:  INITIATE Prior Notice: 
Subject:  Open Season for Z2 South System Capacity
Notice Text:

October 12, 2020


To All Southern Natural Gas Company Shippers

RE: Open Season Announced for Zone 2 Firm Transportation

This is to announce an open season for bids for approximately 18,000 dth/day of short-term firm transportation capacity (“FT”) in Zones 1 and 2 of the south system of Southern Natural Gas Company, L.L.C.'s ("Southern”) pipeline system that is currently operationally available  through April 30, 2021 to certain delivery points in Zones 1 and 2. Southern has as much as 14,000 dth/d available to delivery pins east of Southern's Gallion Compressor Station located in Marengo County, Alabama (Segment 440) and west of Southern's Elmore Compressor Station located in Elmore County, Alabama (Segment 460). The remaining capacity is available to delivery pins west of Southern's Gallion Compressor Station located in Marengo County, Alabama (Segment 440). This capacity is available from receipt pins as far west as TGP-Rose Hill (Pin #420546), Destin (Pin # 605900) and Petal Storage (Pin # 606200).  

A portion or all of this capacity is subject to prearranged bid. This capacity is subject to a reserve price which has been established according to the terms of Southern's tariff. Southern will not accept any bids below the reserve price. If Southern accepts a bid at less than the maximum Tariff rate but above the reserve price for this capacity, Southern reserves the right to restrict such discount to specific receipt point(s) and delivery point(s) on a non-discriminatory basis.

The capacity available to be awarded may not be available in the same increments to all locations along Southern's south system and may not be available along particular laterals or at certain receipt or delivery pins. Please note that no receipt or delivery pins on Southern's north main system are included in this open season.  Any bid with a start date or an ending date later than April 30, 2021 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 October 20, 2020.  

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 or for 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 18,000 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 205-612-8946.

SNG Marketing