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Enron Mail |
An event of Force Majeure occurred on Northern Border (NBPL) on July 13 at =
Station 8 resulting in curtailment of deliveries through Ventura from July1= 3-18. As a result, ENA was not able to take full delivery of firm volumes = from EC at the Monchy upstream interconnect. EC and ENA hold divergent views on how to implement the curtailment. We ne= ed to reach a common understanding. The view of EC is that a force majeure event, as defined by Article 5 of ou= r master agreement with ENA (see Attachment) or superceded by amendments co= ntained in individual confirmation letters, implies that all firm transacti= ons must be curtailed "by the same percentage that the applicable transport= er interrupts or curtails firm delivery service..." (language in parenthese= s was directly lifted from a Monchy confirmation letter dated November 1, 1= 997 signed by Julie Gomez). =20 The view of ENA, as articulated by Martin and Lisa, is that Northern Border= sends scheduled volumes back to Unify via EDI with a service agreeement pa= thed to a firm supply deal. The pipeline scheduled volume for the path dri= ves how much each individual deal is curtailed even if some supply deals = are cut by a different percentage than others. My apologies if I have not e= xpressed this properly. In other words, we agree on the magnitude of the curtailment but not how to= allocate cuts to individual deals. Because we have desk to desk deals (since earlier this year), ENA and EC mu= st agree on scheduled volumes. In the past our deals were Physical Forward= and if our volumes did not agree it was not discovered until invoicing, at= which time the accountants would duke it out. Now, Logistics quite proper= ly has to deal with it within the month. This has implications at all poin= ts where ENA transacts with EC such as Kingsgate, Empress, Eastern Canada. EC has reluctantly agreed to accept ENA's non-proportional scheduled volum= es for this event so that the schedulers can move on but I would appreciate= a policy resolution to this issue prior to the next downstream curtailment= . Kevin Heal Enron Canada Corp. 403 974-6727 Attachment Legal Opinion dated July 20, 2001 Kevin, further to your voice-mail, as indicated to you yesterday, our physi= cal gas master agreement with ENA is in their form of Enfolio master agreem= ent and not our form of master. What that means is that, although the mech= anics of declaring force majeure, etc. are the same, the definition of forc= e majeure under our Enfolio master with ENA is not restricted to delivery p= oint force majeure as it is in ECC's standard form, but is rather a broader= based force majeure. However, it must be kept in mind that, depending on = the transaction, the definition of "force majeure" may be amended in the te= rms of the particular confirmation letter. The application section (which = is basically the same as in our form) is as follows: This Article 5 is the sole and exclusive excuse of performance permitted un= der this Agreement, and all other excuses at law or in equity are waived to= the extent permitted by law. Except with regard to payment obligations, i= n the event either Party is rendered unable, wholly or in part, by Force Ma= jeure to carry out its obligations hereunder, it is agreed that upon such P= arty's giving notice and full particulars of such Force Majeure to the othe= r Party as soon as reasonably possible (such notice to be confirmed in writ= ing), the obligations of the Party giving such notice, to the extent that t= hey are affected by such event, shall be suspended from the inception and d= uring the continuance of the Force Majeure for a period of up to 60 Days in= the aggregate during any 12 Month period, but for no longer period. The P= arty receiving notice of Force Majeure may immediately take such action as = it deems necessary at its expense for the entire 60 Day period or any part = thereof. The Parties expressly agree that upon the expiration of the 60 Da= y period Force Majeure shall no longer apply to the obligations hereunder a= nd both Buyer and Seller shall be obligated to perform... I will send a copy of the agreement over to you which also contains the def= inition of Force Majeure, but again it must be remembered that such definit= ion may be amended in the particular confirm. Greg Johnston Senior Counsel Enron Canada Corp. phone: 403-974-6745 greg.johnston@enron.com
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