Non-binding Open Season Notice
August 1, 2008 – August 29, 2008
Texas Eastern Appalachia to Market Expansion Program (TEAM)
Texas Eastern’s Appalachia to Market Expansion Program offers the unique opportunity for moving emerging natural gas supplies from the Appalachian region to premium markets in the Northeast.
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Spectra Energy’s Texas Eastern Transmission, LP, a leading provider of natural gas transportation to Northeast markets including the MidAtlantic and New England states, is pleased to announce its Texas Eastern Appalachia to Market Expansion Program, a new expansion program designed to transport emerging Appalachian production to premium natural gas markets in the Northeast U.S. These newly emerging regional supplies will significantly add to the reliability, security, diversity and optionality of supply for the Northeast region especially when combined with traditional supply sources, as well as new Rocky Mountain and new LNG supply sources.
Texas Eastern is well positioned to develop a multi-year connection and capacity expansion program to efficiently connect these developing Appalachian natural gas supplies to its system - and to provide the incremental expansion capacity necessary as the production develops. Producers and other shippers interested in connecting production to the Texas Eastern system or transporting Appalachian production to the east, or both, should consider participating in the TEAM Open Season. In addition, Northeast market shippers interested in “reaching back” to the increasing number of supply points in the West Virginia and Pennsylvania regions should also consider participating in the TEAM Open Season.
Texas Eastern has a proven track record of delivering successful expansion projects to its customers; TEAM is a project that will provide an efficient means to bring newly emerging natural gas supplies to Northeast citygates. With this non-binding Open Season, Texas Eastern invites parties interested in obtaining firm TEAM capacity to submit a non-binding Service Request Form. Service commencement for this expansion program is targeted for as early as Nov. 1, 2011.
Project Background
The rapidly emerging Appalachian production area has created new opportunities to increase supply diversity for growing domestic natural gas markets. The formation spans the regions of West Virginia, Eastern Ohio, Western and Northern Pennsylvania and Southern New York. Recent studies have estimated that the formation may contain up to 500 trillion cubic feet of gas in place. It is also estimated that 10 percent of this gas is technically recoverable. With the successful development of the Barnett, Fayetteville and other shale plays in the U.S., Texas Eastern is anticipating the positive, potential impact the emerging Appalachian production will bring to its customers and the Northeast markets in general.
Texas Eastern’s existing facilities are uniquely positioned over the Appalachian production area while also providing significant access to all major Northeast markets. We are developing and constructing well-timed, cost effective pipeline expansions that will connect significant sources of supply to the region. These expansions offer growing Northeast markets increased supply diversity, enhanced ability to better manage price volatility, and improved supply security and reliability. Conventional Northeast market growth and increasing natural gas power generation offer attractive market options for these newly developing sources.
Connecting markets to new supply has been instrumental to Texas Eastern’s success for many years. Texas Eastern has proven its ability and experience to develop and execute TEAM as it has developed and executed similar type projects in the past. In addition, Texas Eastern intends to develop future expansion projects as the Appalachian supply increases. TEAM intends to utilize existing rights of way, where possible, for the expansion in order to manage construction cost and minimize the impact on landowners and the environment.
Project Description
TEAM provides shippers with the opportunity to design transportation services from multiple existing and proposed new receipt points on the Texas Eastern system within the Appalachian production region in West Virginia, Ohio and Pennsylvania that span Texas Eastern’s M2 and M3 market zones to delivery points across Texas Eastern’s market area including, but not limited to, Lambertville, N.J.; the Steckman Ridge Storage project in Bedford, Pa.; near Transco Station 195 in York County, Pa; Dominion Transmission at Chambersburg, Pa.; and Columbia Gas Transmission near Eagle, Pa. The expansion has a target capacity of 300,000 Dth/day but the project’s success is not dependent on or restricted to this target volume. TEAM is intended to meet the initial supply growth needs in the 2011/2012 timeframe. Existing delivery interconnects with numerous storage projects and other interstate gas pipelines present tremendous flexibility and opportunity to participants in this expansion program. Texas Eastern’s vast existing infrastructure coupled with necessary expansion facilities allows shippers to address their growth needs and diversify their supply while enjoying the reliable, flexible service Texas Eastern shippers have grown to depend on.
As part of this Open Season, interested Appalachian producers or other parties have the following options:
1) Designate point(s) of receipt on the Texas Eastern system where they want to locate an interconnect where they will bring their supply to the Texas Eastern system; and/or
2) Design a firm transportation service from existing receipt points or new receipt points designated under option 1) to desired markets further east on Texas Eastern’s system; or
3) Exercise both Options 1) and 2).
Also as part of this Open Season, interested Northeast shippers may “reach back” and nominate firm transportation services from any one of the multitude of supply points in the Appalachian production area to their city/plant gate or to any of the pipeline interconnects along the way. Texas Eastern reserves the right to develop subset projects from the nominations that may be more representative of the timing and markets served.
Project Rates
Rates will be determined at the conclusion of the Nonbinding Open Season and are dependent upon the scope and final facilities required to satisfy the firm service requests for shippers who are awarded capacity. Shippers will have the ability to choose to pay Texas Eastern’s applicable recourse rates for service on the TEAM facilities or to pay a mutually agreeable negotiated rate for such service. Texas Eastern may consider favorable rate or rate related incentives to anchor shippers who are willing to both commit early and provide the commercial foundation for the project.
Non-binding Nomination Process
During the Non-binding Open Season period (9:00 a.m., EST, Friday, Aug. 1, 2008, to 5:00 p.m., EST, on Friday, Aug. 29, 2008) interested parties must submit a Non-binding Service Request Form, which specifies the Maximum Daily Quantity (MDQ), contract term (10-year minimum required), receipt points (both existing and proposed) and the delivery points required. The Non-binding Service Request Form is included in this package. The completed Non-binding Service Request Form must be executed by a duly authorized representative and mailed or faxed, to Texas Eastern’s offices at:
890 Winter Street, Suite 300
Waltham, MA 02451
Attention: Sean Foley.
The fax number is 617-560-1581.
Texas Eastern reserves the right to reject any Non-binding Service Request Form that is not received on or before 5:00 p.m. EST, on Friday, Aug. 29, 2008.
Contracting for Service
Upon the close of the Non-binding Open Season, Texas Eastern will evaluate all valid requests for service as set forth in the Non-binding Service Request Forms to determine if the proposed TEAM expansion program is economically justified. If Texas Eastern elects to proceed with the program, Texas Eastern representatives will contact all parties who have submitted valid requests in order to detail preliminary project rates for the nominated transportation services and to commence negotiations.
Any party who is interested in obtaining TEAM capacity must enter into a binding precedent agreement. In order to preserve a Nov. 1, 2011 in-service date, Texas Eastern reserves the right to reject any party’s valid request for service in the event a duly authorized representative of such party has not executed a binding precedent agreement on or before Nov. 30, 2008
Texas Eastern may consider holding a subsequent Binding Open Season to further define the Project participants or parameters.
Limitations and Reservations
Texas Eastern reserves the right, in its sole discretion, to decline to proceed with the TEAM expansion program. Texas Eastern also reserves the right to reject any and all bids that do not satisfy the requirements set forth in this Non-binding Open Season Notice. Without limiting the foregoing, Texas Eastern may, but is not required to, reject any request for service in which the Non-binding Service Request Form is incomplete, is inconsistent with the terms and conditions outlined in this Nonbinding Open Season Notice, contains additional or modified terms, or is otherwise deficient in any respect. Texas Eastern also reserves the right to reject requests for service in the event requesting parties are unable to meet applicable creditworthiness requirements. No request for service shall be binding on Texas Eastern unless and until duly authorized representatives of both a requesting party and Texas Eastern have executed binding precedent agreements.
Communications
Interested parties may contact their Texas Eastern account manager or Bob Riga at 617-560-1436 or Sean Foley at 617-560-1359 to discuss any questions or to seek additional information about this Non-binding Open Season.
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A FORTUNE 500 company, Spectra Energy Corp (NYSE: SE) is one of North America’s premier natural gas infrastructure companies serving three key links in the natural gas value chain: gathering and processing, transmission and storage, and distribution. For nearly a century, Spectra Energy and its predecessor companies have developed critically important pipelines and related infrastructure connecting natural gas supply sources to premium markets. Based in Houston, Texas, the company operates in the United States and Canada approximately 18,000 miles of transmission pipeline, 265 billion cubic feet of storage, natural gas gathering and processing, natural gas liquids operations and local distribution assets. Spectra Energy Corp also has a 50 percent ownership in DCP Midstream, the largest natural gas gatherer and processor in the United States. For more information, visit www.spectraenergy.com
Texas Eastern Appalachia to Market Expansion Program – Open Season
Non-binding Service Request Form
Texas Eastern Transmission, LP
Shipper Information
CompanyContact
Title
Address
Telephone / Fax
Commencement Date / Quantity (Dth/d)
TOTAL QUANTITY =
Receipt Point(s) [1][3] / Quantity (Dth/d) / Delivery Point(s) [2][3] / Quantity (Dth/d)
Contract Term:
By completing this Non-binding Service Request Form, subject to Texas Eastern’s acceptance of shipper’s request for service and shipper’s receipt of notification from Texas Eastern of quantities of capacity allocated to shipper, shipper hereby agrees to enter into negotiations with the objective to enter into a binding precedent agreement with Texas Eastern on or before Nov. 30, 2008. If shipper does not enter into a precedent agreement on or before Nov. 30, 2008, Texas Eastern reserves the right to reject shipper’s request for service as set forth in this Nonbinding Service Request Form.
If you have any questions, please contact your Texas Eastern account manager or the contact listed below. In addition, please send your completed Open Season Non-binding Service Request Form to:
Sean Foley, Account Manager 617-560-1581 fax
Texas Eastern Transmission e-mail
890 Winter Street, Suite 300
Waltham, MA 02451
[1] The sum of multiple nominated receipt point quantities may not exceed the Maximum Daily Quantity.
[2] The sum of multiple nominated delivery point quantities may not exceed the Maximum Daily Quantity.
[3] Please use additional sheets of paper if necessary.
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