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TSP/TSP Name:  1939164-TENNESSEE GAS PIPELINE Critical: Y
Notice Type Desc (1):  TSP CAP OFFERING Notice Type Desc (2):  TSP CAP OFFERING
Notice Eff Date/Time:  11/11/2013 10:00:54AM Notice End Date/Time:  12/31/2049 9:00:00AM
Post Date:  11/11/2013 10:00:54 AM Notice ID: 350421
Reqrd Rsp:  1 Notice Stat Desc:  INITIATE Prior Notice: 
Subject:  AVAIL FIRM CAPACITY (OS #888)
Notice Text:

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.

 

 

Acceptable Bids

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 requested service.

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 factors:

                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 http://www.ferc.gov/legal/acct-matts/interest-rates.asp

 

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.