BC LNG Export Co-operative LLC (BC LNG)
Application for a 20-year LNG Export Licence
NEB File No. OF-EI-Gas-GL-B262-2011-01 01
BC LNG Response to NEB IR 3.3(a) Appendix 1
Page 1 of 2
[Buyer’s Letterhead]
October __, 2011
BC LNG Export Co-Operative LLC
c/o Lawson Lundell LLP
1600-925 West Georgia Street
Vancouver, British ColumbiaCanada V6C 3L2
Attention:
RE: Expression of Interest to Provide Back-up Supply of Natural Gas to BC LNG Export
Co-Operative LLC and DCEP Gas Management Ltd. in conjunction with the Nomination
Procedures of BC LNG Export Co-Operative LLC
Gentlemen:
[Name of Buyer] (“Buyer”) has expressed an interest to BC LNG Export Co-Operative
LLC (“Export Co-Op”) and DCEP Gas Management Ltd (“DCEP”) in providing a
commitment for back-up supply of DCEP’s natural gas feedstock requirements in
connection with the proposed “small scale” LNG facility to be operated by DCEP and
located in the vicinity of the western shore of the Douglas Channel located in the Kitimat
Arm, British Columbia (the “Project”). We look forward to reaching a definitive
agreement for back-up gas supply in accordance with the requirements of the Project.
The parties wish to describe herein a summary of the indicative terms to be set forth in a
definitive agreement to be negotiated between the parties:
1.
Volume: Up to 250 mmcf/d as requested by DCEP from time to time upon
reasonable notice, such requested amount not to exceed the lesser of (i) the
pipeline capacity available to DCEP to deliver natural gas to the Project, and (ii)
the liquefaction capability of the Project;
2.
Term: 20 years from the date of first deliveries;
3.
Delivery Points: 1) At a point nearby or proximate to the interconnection
between the natural gas transportation system owned by Pacific Northern Gas Ltd.
and DCEP’s pipeline and metering facilities located at or near Kitimat, British
Columbia; 2) At the interconnection between the natural gas transportation system
owned by Spectra Energy and the natural gas transportation system owned by
Pacific Northern Gas Ltd. located near Summit Lake, British Columbia; and 3)
such other point or points as the parties may agree;
4.
Price: Buyer would receive a price based on a local natural gas index or an oil
price or index, in each case as the parties may agree from time to time or
otherwise for volumes delivered each day a price equal to the lesser of the closing
28036.112013.KLH.4588605.1
BC LNG Export Co-operative LLC (BC LNG)
Application for a 20-year LNG Export Licence
NEB File No. OF-EI-Gas-GL-B262-2011-01 01
BC LNG Response to NEB IR 3.3(a) Appendix 1
Page 2 of 2
deliveries for such day plus the sum of
posted price for AECO/NIT or Station 2
Two and one half cents Canadian ($.025 CAD) for each mmbtu of natural gas
delivered.
This letter is a non-binding expression of interest of the parties and creates no legally
binding obligation of the parties. Only a definitive agreement executed by the parties and
approved by all necessary corporate actions (including partners and board of directors)
and other approvals will be legally binding on the parties.
If the foregoing accurately reflects our understanding, please acknowledge in the space
provided below and forward a fully signed copy back at your earliest opportunity.
Sincerely,
[Name of Buyer]
By: ________________________
Title: _______________________
AGREED AND ACKNOWLEDGED
As of the ___ day of October, 2011:
BC LNG Export Co-Operative LLC
By: __________________________
Thomas P. Tatham
Managing Director
AGREED AND ACKNOWLEDGED
As of the ___ day of October, 2011
DCEP Gas Management Ltd.
By: _________________________
Glenn H. Tatham
President
28036.112013.KLH.4588605.1