DATE: November 11, 2013 TIME:
10:00 A. M.
TO: ALL TENNESSEE GAS PIPELINE COMPANY CUSTOMERS
RE: CAPACITY OPEN SEASON (OPEN SEASON POSTING #888)
In response to multiple inquiries regarding natural gas
transportation from the Utica region, Tennessee Gas Pipeline Company, L.L.C.
(“Tennessee”) is conducting this binding open season for long-term, firm
transportation in an effort to determine its customers' needs for firm natural
gas transportation service and to assess the capacity availability and facility
requirements associated with the proposed abandonment and repurposing of one of
Tennessee's four mainlines from the Gulf Coast (Zone 1) to the Utica region in
Ohio (Zone 4) to natural gas liquid (“NGL”) transportation service (see
footnote 1). Therefore, for availability starting as early as April 1, 2014,
Tennessee is soliciting binding capacity bids for:
Receipts from Zone 4 South of Station 219 to Mutually
Agreeable Zone 1 Delivery Points Subject to Available Capacity:
For availability starting April, 1 2014, through March 31,
2034, Tennessee is offering approximately 400,000 DTH/d of firm capacity.
For availability starting on April 1, 2014, through September
30, 2017, Tennessee is offering 100,000 DTH/d of firm capacity. In accordance
with Article XXVI, Section 5.11 of the General Terms and Conditions
(“GT&C”) of its FERC Gas Tariff (“Tariff”), Tennessee cannot grant
extension rights beyond September 30, 2017.
Receipts from Zone 1 to Mutually Agreeable Zone 4
Delivery Points Subject to Available Capacity :
For availability starting April, 1 2014, through March 31,
2034, Tennessee is offering approximately 165,000 DTH/d of firm capacity.
In order to be considered eligible to be awarded capacity
following this open season, potential shippers must satisfy the
creditworthiness requirements in GT&C Article XXVI, Section 4 of the Tariff
and submit an acceptable bid that specifies term, quantities, and receipt and
delivery points that are consistent with the available capacity described
above. In addition, potential shippers should specify the minimum acceptable
quantity below which they will not participate if Tennessee is required to
award a portion of the capacity to multiple parties based on the evaluation of
bids in the Open Season. Available capacity quantities are contingent upon
mainline, meter and lateral capacity.
Tennessee will consider, but reserves the right to reject, any
bid that: (1) does not specify the transportation path as described above; (2)
contains a term less than 15 years or more than 20 years; (3) specifies a rate
less than the applicable maximum reservation and commodity rates; or (4)
includes conditions precedent or contingencies unacceptable to Tennessee.
Tennessee also reserves the right to reject bids with deviations in monthly
maximum daily quantities (“MDQ's”) or varying quantities over the term of the
In addition to the rate bid, Shipper shall also pay ACA,
applicable Fuel and Lost Retention (FL&R) and Electric Power Cost Recovery
(EPCR) charges and all applicable surcharges specified in Tennessee's Tariff,
as it is in effect from time to time.
Tennessee is holding this open season in accordance with
GT&C Article XXVI, Section 5 of its Tariff, commencing at 10:00 A.M. CST,
November 11, 2013 and ending at 5:00 P.M. CST, December 11, 2013. Tennessee
has the right but not the obligation to clarify and finalize bids containing
non-specific receipt or delivery meters. Tennessee reserves the right to award
capacity for a quantity less than the bid quantity subject to any minimum
acceptable quantity specified in the bid, if sufficient capacity is not
available to award the entire bid quantity.
Tennessee reserves the right, upon notice and in its sole
discretion, at any time during this Open Season to terminate, modify, or extend
the Open Season. Tennessee reserves the right, on a not unduly
nondiscriminatory basis, to reject any bid or service request that, in
Tennessee's sole determination, is incomplete, is inconsistent with the terms
of this Open Season, contains additions or modifications to the terms of the
Open Season, is otherwise deficient in any respect (including failure to provide
credit support as Tennessee deems necessary), or requests service outside the
scope of the Open Season. Tennessee reserves the right to agree to discounted
or negotiated rates on a point, volume, term, and condition specific basis.
All final bids received during the open season will be
evaluated on a Net Present Value (NPV) per Dth basis using the following
NPV / Dth = En [R*(1 / (1+i)**n)] / TQ
En = Summation of months 1 through n (Sigma)
n = term in months
TQ = Contract TQ
R = Incremental monthly revenue
i = Monthly Discount Factor (current FERC quarterly rate).
This rate can be found at
If a Shipper's bid would result in the award of any capacity
and that Shipper's bid contains a condition precedent or contingency, which
Tennessee finds acceptable on a not unduly discriminatory basis, Tennessee will
waive the shipper obligation in GT&C Article XXVI, Section 5.4 of the
Tariff that the Shipper be bound by Tennessee's posting of a notice of award of
capacity until such time, not to exceed January 28, 2014, as the condition
precedent or contingency is satisfied. If the condition precedent or contingency
is not satisfied or waived by such date, then Shipper shall not be awarded
capacity, and Tennessee shall offer such capacity to other participating
Shippers who have submitted bids acceptable to Tennessee.
All bids should include a primary receipt meter and a
primary delivery meter, and refer to Open Season #888. Parties interested in
this capacity should submit a binding Firm Transportation request and binding
bid via e-mail by e-mailing their bid to TGPBidroom@kindermorgan.com. Confirm Tennessee's
receipt of any bid by contacting the Bidroom between 8 A.M. and 5 P.M. CST,
Monday through Friday. For further information, please contact:
Sital Mody (713) 420-4336
Ernesto Ochoa (713) 420-1734
Preston Troutman (713) 420-3022
Footnote 1: On August 7, 2013, Kinder Morgan Energy
Partners, L.P., of which Tennessee is a wholly owned interest, and MarkWest
Utica EMG, L.L.C. announced the signing of a letter of intent to form a
midstream joint venture to pursue the development of a processing complex and
NGL pipeline to support natural gas production in the Utica and Marcellus shale
plays in Ohio and Pennsylvania. The proposed NGL pipeline would be
accomplished, in part, through the conversion of over 900 miles of one of
Tennessee's four mainlines from the Gulf Coast to the Utica region in Ohio to
NGL transportation service.