Magnolia Pipeline Service Request Form
The proposed pipeline ("Magnolia Extension") is a 45-mile extension of the existing Magnolia pipeline that would transport up to 500,000 dekatherms ("Dth") per day of natural gas from Tennessee Gas Pipeline's ("TGP") 500 Line to Williams' Transco pipeline beginning in 2019. The non-binding open season for the Magnolia Extension will commence on February 22, 2016 and terminate at 6:00pm CT on April 11, 2016.
The Magnolia extension would be designed to receive natural gas supplies from TGP's 500 Line and to deliver the gas through an existing interconnect to Williams' Transco pipeline in Zone 4, a highly liquid trading area upstream of the new Sabal Trail pipeline. The proposed pipeline is expected to provide timely, cost-effective access to expanding local distribution company, industrial user, and natural gas-fired power generation demand in the Southeast markets. The anticipated in-service date for the Magnolia Extension is 2019.
Upon the close of the open season, American Midstream will evaluate service demand to determine if the proposed pipeline is economically viable and whether necessary facilities can be constructed by the proposed in-service date.
Open Season Details
The non-binding open season will commence February 22, 2016 and terminate at 6:00pm CT on April 11, 2016. Prospective customers are required to submit a completed Service Request form by 6:00pm CT April 11, 2016. Requests for capacity must be for a minimum initial contract term of 20 years from the date of first delivery.
The purpose of the open season is to provide all market participants, including producers, marketers, power plants, industrial and other end-users, or local distribution companies, the opportunity to subscribe for capacity. The final level of additional firm transmission capacity and specific system design will be based on the results of this open season and executed precedent agreements. Market commitments and regulatory approvals will be pursued on the basis of a 2019 start-up date. Parties contracting for capacity on this project who qualify as “foundation shippers” or “anchor shippers” as described below will be provided with additional benefits consistent with regulatory requirements.
All interested entities are being provided with an opportunity to attain “foundation shipper” or “anchor shipper” status for the proposed pipeline. To qualify as a foundation shipper, a party must sign a precedent agreement and credit agreement and commit to at least 100,000 Dth per day of firm capacity for a minimum contract term of 20 years. To qualify as an anchor shipper, a party must sign a precedent agreement and credit agreement and commit to at least 250,000 Dth per day of firm capacity for a minimum contract term of 20 years. Foundation and anchor shippers will be eligible to receive certain incentives, consistent with regulatory requirements, that will be contained in the precedent agreements.
Recourse rates will be set based on the cost of the Magnolia Extension, but American Midstream is willing to agree to negotiated rates, depending upon commitment level, in the range of $0.15 - $0.18 per Dth, plus applicable fuel charges, for deliveries to Transco Zone 4. Recourse rates for the proposed pipeline will be determined at the conclusion of the open season based on the facilities required to satisfy the firm service requests from shippers who have executed a precedent agreement. Recourse rates will be based on various factors such as the capacity subscribed and the costs of the facilities. American Midstream will consider all proposals on a not unduly discriminatory basis.
Resources and Contacts
Completed Service Request forms must be submitted to via e-mail, fax, or mail to:
Fax: (713) 493-2826
Manager of Contracts
American Midstream Partners, LP
Re: Chelsea Whitworth
919 Milam Street
For interested parties, or those seeking more information about the open season, please contact:
SVP of Commercial Services
Limitations and Reservations
American Midstream will consider non-conforming bids, but reserves all rights to reject, in its sole discretion, any individual non-conforming bid; provided, however, such discretion will be exercised in a not unduly discriminatory manner.
Each prospective shipper must meet American Midstream’s credit requirements.
In its sole discretion, American Midstream may provide periodic updates to this open season announcement via www.AmericanMidstream.com. American Midstream reserves the right to continue to market the Magnolia Extension to potential shippers beyond the close of the open season to the extent capacity remains available or can be developed on commercial and economic terms acceptable to American Midstream in its sole discretion.
In the event that valid service requests exceed available capacity and cannot be accommodated by changes in project scope or design, American Midstream reserves the right to pro-rate capacity among prospective customers on the Magnolia Extension; provided however, that shippers meeting the criteria of foundation or anchor shipper will have priority for available firm capacity.
American Midstream reserves the right, in its sole discretion, to discontinue or modify the terms of the open season or the project, including a decision not to proceed with or construct the project regardless of the level of interest. American Midstream also reserves the right to deny any and all service requests that do not satisfy the requirements set forth in this open season including any modifications of the terms of this open season, that are incomplete, contain additional or modified terms or are otherwise non-conforming, or are requested by a prospective customer that is unable to meet American Midstream’s credit requirements.
Final rates for service will be determined upon the conclusion of the open season and are dependent on the scope and type of facilities required to satisfy the firm service requests of customers who are awarded capacity.
The project including this open season is subject to all applicable rules, regulations, orders, and policies of the Federal Energy Regulatory Commission and other applicable federal and state laws, rules, and regulations. American Midstream reserves the right in its sole discretion to discontinue or modify this open season to satisfy any such applicable requirements.