Purpose

The purpose of the open season procedures contained herein (this “Open Season Procedure”) is to outline the process by which Union Gas will seek interest in long term Dawn to Parkway/Kirkwall transportation service using the M12 Rate Schedule in a manner which is fair and equitable to all parties.

Applicability

This Open Season Procedure is only applicable to capacity that becomes available as a result of the expansion of Union Gas' Dawn to Parkway/Kirkwall transmission facilities using the M12 Rate Schedule after December 31, 2007. Existing capacity or renewal of capacity using the M12 Rate Schedule, or any transportation service using the C1 Rate Schedule is not subject to this Open Season Procedure.

Shipper Interest

Union Gas encourages all existing and any potential new shippers to contact their Union Gas

account manager with all requests for additional transportation capacity, as the need arises.

Initiating an Open Season

Union Gas will evaluate the need for an expansion of the transportation capacity available from Dawn to Parkway/Kirkwall. Union Gas may consider, among other things, the following parameters:

When Union Gas determines, in its sole discretion, that there may be sufficient market interest to support an expansion of the Dawn to Parkway/Kirkwall facilities, Union Gas may commence an Open Season.

Open Season

1. Notification
   
   Union Gas, at a minimum, will place a notice of Open Season (the “Open Season Notice”) on their website, provide a notice to existing Shippers and issue a press release advising that it is conducting an Open Season.
    

2. Timing
   
   The Open Season will last for a period of not less than seven days.
    

3. Content of Open Season Notice
    

   The Open Season Notice will identify the following:
    

   1. closing date and time of Open Season bidding,

   2. the date by which Union Gas will respond to bids received in the Open Season,

   3. applicable receipt and delivery points,

   4. the minimum term (if any),

   5. the expected in-service date of the expansion,

   6. a reference to the standard transportation contract (and any other applicable agreements).  Union Gas will provide Open Season participants with the ability to view the standard transportation contract and any other applicable agreements,

   7. the time period by which successful Open Season participants must execute the standard transportation contract (and any other applicable agreements),

   8. a link to this Open Season Procedure on Union Gas' website,

   9. the manner in which an Open Season participant may make a bid,

   10. any other terms and conditions that the Open Season participant may select as part of the service, and

   11. any other terms and conditions applicable to the Open Season.
        

   If Union Gas reasonably expects that the demand for expansion capacity will exceed Union Gas' ability to construct additional facilities, Union Gas will provide information in the Open Season Notice which outlines the potential constraint.
    

4. Valid Bids

Valid Open Season bids will:

1. be submitted by the time and in the manner specified in the Open Season Notice,

2. be signed by a representative of the Open Season participant with the legal authority to bind the Open Season Participant,

3. specify all information required by the Open Season, including without limitation:

   1. the legal party name of the Open Season participant,

   2. quantity,

   3. receipt and delivery points,

   4. term (including start and end date),

   5. any other terms and conditions offered by Union Gas that an Open Season participant may select as part of the service as indicated in the Open Season Notice, and

4. comply with all of the requirements set out in the Open Season Notice.

In the event that Union Gas receives a non-valid bid, where possible, Union Gas may, but not be required to, contact the Open Season participant and ensure that the bid satisfies the bid requirements.

Nature of Open Season

All bids submitted by the Shipper in the Open Season shall be considered binding on Shipper unless otherwise indicated in the Open Season Notice.

Unless otherwise indicated in the Open Season Notice, by submitting a bid in the Open Season, subject only to Union Gas' acceptance and notification of quantities allocated to the bidder, Open Season participants irrevocably commit to the execution and delivery of the referenced standard transportation contract (and any other applicable agreements) by the date indicated in the Open Season Notice, modified as necessary to reflect the Open Season participants bid as accepted by Union Gas.

In the standard transportation contract, Union Gas may include condition precedents for the benefit of Union Gas and/or Shipper, which address any timing or other issues that either party may have.

Union Gas has the right to reject any and all bids, in its sole discretion. Without limiting the foregoing, Union Gas may, but is not required to, reject any bids which do not conform to the Open Season, are incomplete, do not comply with the terms and conditions outlined in the Open Season or are otherwise deficient in any respect.

Financial Assurances

Upon receipt of the Open Season participant’s valid bid, Union Gas will conduct a credit review to determine if additional financial assurances are required. The standard transportation contract referenced in the Open Season Notice outlines the financial assurances that may be required as a condition of service. Prior to the awarding of capacity, Union Gas may contact the Open Season participant requesting additional financial information to assist in the credit review.

Bid Evaluation

Unless otherwise indicated in the Open Season Notice,

1. capacity will be awarded in priority based on term (with a longer term having a higher priority),

2. any differences in the M12 Rate Schedule between the transportation toll for Dawn to Parkway and Dawn to Kirkwall will not be factored into the evaluation process, and

3. if two or more bids have an equivalent term and insufficient capacity remains to satisfy all such bids, then the remaining capacity will be allocated pro-rata based on the contract demand among all such bids.

Awarding of Capacity

Union Gas will notify successful and unsuccessful bidders by the date specified in the Open

Season Notice.

Union Gas will communicate at the time of the awarding of capacity if it requires a successful

bidder to provide additional financial assurances as a condition of the awarding of the

capacity.

Contract Execution

Contracts will be executed in the time and manner outlined in the Open Season Notice.