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8. Pressures.
The Gas delivered by Shipper to the Receipt Points hereunder shall be=20 delivered at a pressure sufficient to overcome the operating pressure=20 existing in Houston's facilities from time to time; provided, however, in n= o=20 event shall such pressures ever exceed the Maximum Allowable Operating=20 Pressure ("MAOP") and Shipper shall at its sole cost and expense ensure tha= t=20 all documentation and data required by the applicable regulatory authority= =20 with regard to Shipper's or Shipper's supplier's overpressure protection=20 facilities upstream of the Delivery Point are made available and updated on= =20 an annual basis throughout the term of this Agreement. If Shipper fails to= =20 comply with the foregoing covenant, Houston may, at Shipper's sole cost and= =20 expense, install such overpressure protection facilities (either upstream o= r=20 downstream of the metering facilities, as Houston may elect) in order to=20 ensure compliance with applicable laws and regulations. The Gas delivered = by=20 Houston to the Delivery Points shall be delivered at the pressure existing = in=20 Houston's facilities from time to time. 9. Quality. Shipper agrees that all Gas received by Houston at the Receipt Points=20 hereunder and Houston agrees that all Gas delivered hereunder to or for the= =20 account of Shipper at the Delivery Points hereunder shall be merchantable G= as=20 which shall: a. Have a total heating value of not less than nine hundred fifty (950)=20 British Thermal Units per cubic foot when saturated with wator vapor (gross= =20 basis); b. Be commercially free of all dust, hydrocarbon liquids, water, suspended= =20 matter, all gums and gum forming constituents and any other objectionable= =20 substances; c. Not contain more than twenty (20) grains of total sulfur, nor more than= =20 one-fourth (1/4) grain of hydrogen sulfide per one hundred (100) standard= =20 cubic feet at the Receipt Points nor more than one (1) grain of hydrogen=20 sulfide per one hundred (100) standard cubic feet at the Delivery Points; d. Contain no more than two percent (2%) by volume of carbon dioxide, two= =20 tenths of one percent (0.2%) by volume of oxygen, and three percent (3%) by= =20 volume of total inerts; e. Have a temperature of not more than one hundred twenty degrees Fahrenhei= t=20 (120F.) or less than forty degrees Fahrenheit (40F.); f. Not contain more than seven (7) pounds of entrained water vapor per=20 million cubic feet; and g. Have a hydrocarbon dewpoint of 45=01"F or less at pipeline operating=20 pressures between 200 psig and 1100 psig. Shipper shall be responsible for odorizing any part of the Gas delivered=20 hereunder to or for Shipper's account which is diverted and/or used by=20 Shipper for any purpose for which odorization is required pursuant to=20 regulations of the Railroad Commission of Texas. Should the Gas delivered to either party hereunder fail to meet the quality= =20 specifications above, either party shall notify the other and the party=20 responsible for the deficiency shall make a diligent effort to correct such= =20 failure. The party receiving the deficient Gas shall have the right to=20 refuse to accept such Gas for so long as the other party is unable to deliv= er=20 Gas conforming to such specifications, or either party may accept delivery = of=20 such Gas or any part thereof during such period. Should either party's=20 tender of deficient Gas hereunder extend for a period greater than sixty (6= 0)=20 Days, the receiving party shall have the right and option at the end of suc= h=20 sixty (60) Days, and as long thereafter as the other party continues to=20 tender such non-conforming Gas, to terminate this Agreement on twenty-four= =20 (24) hours advance written notice to the other party stating the effective= =20 date of such termination. 10. Metering Facilities and Measurement. Except as otherwise agreed by Houston, the metering facilities to measure t= he=20 volumes of Gas delivered at each Receipt Point and Delivery Point shall be= =20 maintained and operated or caused to be maintained and operated by Houston.= =20 The Btu content of the Gas shall be determined by the facilities at the=20 Receipt Points and Delivery Points. Such facilities and measurement data= =20 with respect to the Gas covered hereby shall at all reasonable times be=20 subject to joint inspection by the parties hereto. Gas volumes measured wi= th=20 the use of orifice meter(s) shall be determined in accordance with the=20 provisions of the Gas Measurement Committee Report No. 3 of the American Ga= s=20 Association, as revised in 1985 and as amended and/or supplemented from tim= e=20 to time, and Gas volumes measured with the use of positive meter(s) shall b= e=20 determined on the basis of Gas Measurement Committee Report No. 7 of the=20 American Gas Association, as revised in 1981 and as may be amended and/or= =20 supplemented thereafter from time to time. The unit of volume for=20 measurement of Gas delivered hereunder shall be one (1) cubic foot of Gas a= t=20 a base temperature of sixty degrees Fahrenheit (60F.) and at an absolute=20 pressure of fourteen and sixty-five one hundredths (14.65) pounds per squar= e=20 inch absolute. Atmospheric pressure for each of the Receipt Points and=20 Delivery Points shall be assumed to be the pressure value determined by=20 Houston for the county in which such point is located pursuant to generally= =20 accepted industry practices (but not less than 14.1 psia nor more than 14.7= =20 psia) irrespective of the actual atmospheric pressure at such points from= =20 time to time. Temperature shall be determined by a recording thermometer o= f=20 standard make. If recording charts are used, the arithmetical average of t= he=20 temperature recorded during periods of flow for each chart, the factor for= =20 specific gravity according to the latest test therefor, and the correction= =20 for deviation from Ideal Gas Laws applicable during each chart period shall= =20 be used to make proper computations of volumes hereunder. If electronic fl= ow=20 measurement is used, continuous temperature, static pressure and differenti= al=20 pressure monitoring will be applicable. If electronic measurement is used = in=20 conjunction with on-site chromatograph, continuous monitoring of specific= =20 gravity will be applicable; otherwise the volumes computed using a fixed=20 value specific gravity factor shall be corrected to reflect the actual=20 specific gravity of the flowing Gas as determined by a chromatographic=20 analysis of the sample accumulated during the same period of flow or, in th= e=20 case of spot samples, the specific gravity factor determined by=20 chromatographic analysis shall be applied to volumes delivered during the= =20 succeeding chart periods. The correction for deviation from the Ideal Gas= =20 Laws shall be computed and applied to volumes calculated by electronic=20 measurement devices. Specific gravity and Btu shall be determined by such= =20 methods as may be developed by Houston through use of a continuous Gas samp= le=20 accumulator, on premises analysis, or by spot samples taken at the Receipt= =20 Points and Delivery Points at intervals determined to be appropriate by=20 Houston. Results from a continuous sampler shall be used to calculate=20 volumes delivered during the same period in which the sample was accumulate= d;=20 provided, however, that Houston reserves the right to adopt the practice of= =20 using the Btu content measured for a period prior to the Month of Gas flow = in=20 calculating the quantity of Gas transported during a given Month. Results= =20 from a spot sample shall be used to calculate volumes during the subsequent= =20 period until another sample is taken. The arithmetical average of the=20 continuous temperature recorded during each chart period, the factor for=20 specific gravity according to the latest test therefor, and the correction= =20 for deviation from Ideal Gas Laws applicable during each chart period shall= =20 be used to make proper computations of volumes hereunder. The gross heatin= g=20 value (Btu content) used shall be determined by adjusting the Btu content= =20 measured to reflect the actual water vapor content of the Gas delivered at = a=20 temperature of sixty degrees Fahrenheit (60F.) at an absolute pressure of= =20 fourteen and sixty-five one-hundredths (14.65) pounds per square inch=20 absolute. If the water vapor content of the Gas delivered is equal to or= =20 less than seven (7) pounds per one million cubic feet (1,000 Mcf), the Gas= =20 shall be considered dry. The volume of Gas measured shall be multiplied by= =20 the applicable Btu content for such Gas (either that measured for the Month= =20 of Gas flow or for the designated period of Btu measurement that may occur= =20 prior to the actual Month of Gas flow) to determine the total volume of Gas= =20 in MMBtu. In the event that the aggregate quantity of Gas tendered by=20 Shipper and accepted by Houston under this Agreement during any Month at a= =20 given Receipt Point equals a quantity less than the product of (i) 300 MMBt= u=20 per Day times (ii) the number of Days in the Month during which Shipper=20 tendered Gas to Houston in accordance with a confirmed nomination, then=20 Houston may, at its election, charge Shipper a metering fee ("Metering Fee"= )=20 of $350 for such Month with respect to each such Receipt Point. Eric Gillaspie 713-345-7667 Enron Building 3886
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