Exhibit 10-D-6
SERVICE AGREEMENT
between
PINE NEEDLE LNG COMPANY, LLC
and
PUBLIC SERVICE COMPANY OF NORTH CAROLINA
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January 29, 1997
SERVICE AGREEMENT
THIS AGREEMENT entered into this 29 day of January, 1997, by and between PINE
NEEDLE LNG COMPANY, LLC, a North Carolina limited liability company, hereinafter
referred to as "Pine Needle," and PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
hereinafter referred to as "Customer,"
WITNESSETH
WHEREAS, by order issued November 27, 1996, in Docket No. CP96-52, the Federal
Energy Regulatory Commission granted a certificate of public convenience and
necessity to Pine Needle to construct and operate a liquefied natural gas
storage facility in Guilford County, North Carolina; and
WHEREAS, Pine Needle's LNG storage facility, which is proposed to be in service
by May 1, 1999, will have a total storage capacity of 4 Bcf of gas, with the
ability to vaporize 400 MMcf/day and to liquefy at a net rate of 20 MMcf/day;
and
WHEREAS, Customer has requested firm storage service at Pine Needle's LNG
storage facility under Pine Needle's Rate Schedule LNG-1 and has executed with
Pine Needle a Precedent Agreement dated September 22, 1995 for such service; and
WHEREAS, Pine Needle is willing to provide the requested firm storage service
for Customer pursuant to the terms and provisions of this Service Agreement,
Rate Schedule LNG-1, and the Precedent Agreement.
NOW, THEREFORE, Pine Needle and Customer agree as follows:
ARTICLE I
SERVICE TO BE RENDERED
Subject to the terms and provisions of this agreement and of Pine Needle's Rate
Schedule LNG-1, as amended from time to time, Pine Needle agrees to liquefy
natural gas; store such gas in liquefied form; and vaporize and deliver such gas
to Customer or for Customer's account as follows:
To withdraw from storage and vaporize the gas stored in liquefied form by Pine
Needle for Customer's account up to a maximum quantity on any day of the
dekatherm equivalent of 100,000 Mcf, which quantity shall be Customer's
Vaporization Quantity. 1/
To liquefy natural gas for Customer up to a maximum quantity on any day of the
dekatherm,equivalent of 5,000 Mcf, which shall be Customer's Liquefaction
Quantity. 1/
To store in liquefied form for Customer's account up to a total quantity of the
dekatherm equivalent of 1,000,000 Mcf, which quantity shall be Customer's
Storage Capacity.
1/ In addition to these quantities, Pine Needle shall retain quantities of gas
for fuel and gas otherwise used or lost and unaccounted for pursuant to Rate
Schedule LNG-1.
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SERVICE AGREEMENT (CONTINUED)
ARTICLE ll
POINT OF RECEIPT AND DELIVERY
1. The Point of Receipt for all gas tendered to Pine Needle for liquefaction
hereunder shall be at the following point(s):
The interconnection between Pine Needle's 10-inch inlet pipeline and
Transcontinental Gas Pipe Line Corporation's ("Transco") mainline
system at milepost 1356.95 on Transco's mainline in Guilford County,
North Carolina.
2. The Point of Delivery for all gas delivered by Pine Needle to Customer or
for the account of Customer shall be at the following point(s):
The interconnection between Pine Needle's 24-inch outlet pipeline and
Transco's mainline system at milepost 1356.95 on Transco's mainline in
Guilford County, North Carolina.
ARTICLE lll
TERM OF AGREEMENT
This agreement shall be effective as of the date that Pine Needle's
facilities necessary to provide service hereunder to Customer have been
constructed and are ready for liquefaction of gas, as determined by Pine
Needle in its sole opinion, hereinafter referred to as the "In-Service
Date," and shall remain in force and effect for a primary term of twenty
(20) years from and after the In-Service Date, and year to year
thereafter, subject to termination by either party upon two (2) years
prior written notice to the other.
ARTICLE IV
RATE SCHEDULE AND PRICE
1. Customer shall pay Pine Needle for service rendered hereunder in
accordance with Pine Needle's Rate Schedule LNG-1 and the applicable
provisions of the General Terms and Conditions of Pine Needle's FERC Gas Tariff
as filed with the Federal Energy Regulatory Commission, and as the same
may be amended or superseded from time to time. Such rate schedule and
General Terms and Conditions are bv this reference made a part hereof.
2. Pine Needle shall have the unilateral right to propose, file and make
effective with the Federal Energy Regulatory Commission, or other regulatory
authority having jurisdiction, changes and revisions to the rates and rate
design proposed pursuant to Section 4 of the Natural Gas Act, or to propose,
file and make effective superseding rates or rate schedules, for the purposes of
changing the rates, charges, rate design, terms and conditions of service and
other provisions thereof effective as to Customer; provided however that the (i)
firm character of service, (ii) term of agreement (as set forth in Article lll
above), (iii) quantities, and (iv) points of receipt and delivery shall not be
subject to unilateral change under this paragraph. Customer shall have the right
to file with the Commission or other regulatory authority in opposition to any
such filings or proposals by Pine Needle.
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SERVICE AGREEMENT (CONTINUED)
ARTICLE V
MISCELLANEOUS
1. The subject headings of the Articles of this agreement are inserted for
the purpose of convenient reference and are not intended to be a part of
this agreement nor to be considered in the interpretation of the same.
2. This agreement supersedes and cancels as of the effective date hereof the
following contracts between the parties hereto: None.
3. No waiver by either party of any one or more defaults by the other in the
performance of any provisions of this agreement shall operate or be construed as
a waiver of any future default or defaults, whether of alike or different
character.
4. This agreement shall be interpreted, performed and enforced in accordance
with the laws of the State of North Carolina.
5. This agreement shall be binding upon, and inure to the benefit of the
parties hereto and their respective successors and assigns.
6. Notices to either party shall be in writing and shall be considered as
duly delivered when mailed to the other party at the following address:
(a) If to Pine Needle:
Pine Needle LNG Company, LLC
c/o Pine Needle Operating Company
X.X.Xxx 1396
(2800 Post Oak Boulevard 77056)
Xxxxxxx, Xxxxx 00000-0000
Attention: Director - Customer Services and Scheduling
(b) If to Customer:
Public Service Company of North Carolina
X.X. Xxx 0000
(400 Xxx Road 28054)
Xxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Vice President, Marketing & Gas Supply
Such addresses may be changed from time to time by mailing appropriate notice
thereof to the other party.
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SERVICE AGREEMENT (CONTINUED)
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
signed by their respective officers or representatives thereunto duly
authorized.
PINE NEEDLE LNG COMPANY, LLC
by its agent
PINE NEEDLE OPERATING COMPANY
By: s/Xxxxx X. Xxxxxxx
Vice President
PUBLIC SERVICE COMPANY OF NORTH CAROLINA
By: s/Xxxxxxxx X. Xxxx
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