PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
INTERCONNECTION AGREEMENT
Between
Ridgeline Midstream Services LLC
and
Appalachian Trunk Pipeline Company, LLC
Prepared in Connection with FERC Docket Nos. RP22-847-000 and RP22-847-001
Privileged and Confidential — Attorney Work Product
Prepared by:
Calderwood & Harkness LLP 1601 K Street NW, Suite 900 Washington, DC 20006
C&H Matter No. 1016-00005
TABLE OF CONTENTS
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INTERCONNECTION AGREEMENT
This INTERCONNECTION AGREEMENT (this "Agreement") is entered into as of the Effective Date (as defined herein) by and between Ridgeline Midstream Services LLC, a Delaware limited liability company ("Ridgeline"), and Appalachian Trunk Pipeline Company, LLC, a Pennsylvania limited liability company ("ATPC," and together with Ridgeline, the "Parties" and each individually, a "Party").
RECITALS
WHEREAS, Ridgeline Midstream Services LLC ("Ridgeline"), a Delaware limited liability company with its principal office at 700 Kanawha Boulevard East, Suite 1400, Charleston, WV 25301, is the sole owner and operator of the Ridgeline Pipeline System, a 187-mile, 24-inch-diameter high-pressure natural gas transportation pipeline extending from the Wetzel County Interconnect in Wetzel County, West Virginia, to the Waynesburg Compressor Station in Greene County, Pennsylvania, with a design capacity of 1.2 Bcf/d (1,200,000 Dth/d);
WHEREAS, Ridgeline is a wholly owned subsidiary of Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted limited company (Cayman Registry No. CR-381204), registered at 4th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman KY1-1002;
WHEREAS, Ridgeline's registered agent is Capitol Filings Inc., 1209 Orange Street, Wilmington, DE 19801; EIN: 87-4231956; FERC Code: 960442;
WHEREAS, Appalachian Trunk Pipeline Company, LLC ("ATPC"), a Pennsylvania limited liability company with its principal office at 2200 Penn Center West, Suite 300, Pittsburgh, PA 15276, is the owner and operator of a 640-mile interstate natural gas pipeline system with a system capacity of 3.8 Bcf/d serving markets in Pennsylvania, Ohio, and New York; FERC Code: 840117; EIN: 25-1987643;
WHEREAS, ATPC's registered agent is Keystone Corporate Services LLC, 600 North Second Street, Harrisburg, PA 17101;
WHEREAS, ATPC is a wholly owned subsidiary of Tidewater Infrastructure Partners LP ("Tidewater"), a Delaware limited partnership (EIN: 51-0438712), whose general partner is Tidewater GP Inc., a Delaware corporation, with its principal office at 2200 Penn Center West, Suite 300, Pittsburgh, PA 15276;
WHEREAS, on May 12, 2022, Ridgeline filed an application before the Federal Energy Regulatory Commission ("FERC" or the "Commission") in Docket Nos. RP22-847-000 (rate case) and RP22-847-001 (interconnection) seeking approval of an initial tariff rate for interstate transportation service on the Ridgeline Pipeline System under Part 284, Subpart G, of the Commission's regulations, and authorization for physical interconnection with ATPC's existing pipeline network;
WHEREAS, Ridgeline's proposed FERC Gas Tariff, Original Volume No. 1, contemplates open-access transportation service under the Natural Gas Act, §§ 4, 5, and 7, and 18 C.F.R. Parts 154, 157, and 284;
WHEREAS, the Ridgeline Pipeline System was placed in service on October 1, 2021, has an original construction cost of $587.2 million, and currently operates at a throughput of approximately 680 MMcf/d (56.67% utilization);
WHEREAS, Ridgeline has three compressor stations—Wetzel Station (Wetzel County, WV), Mannington Station (Marion County, WV), and Waynesburg Station (Greene County, PA)—with aggregate installed compression of 45,000 HP;
WHEREAS, the Parties desire to establish the terms and conditions for the physical interconnection of the Ridgeline Pipeline System with ATPC's existing 30-inch mainline at ATPC Milepost 412.6, to be located at the Wetzel County Interconnect in Wetzel County, West Virginia (the "Interconnection Point");
WHEREAS, this Agreement is intended to be filed with FERC as part of Ridgeline's tariff filing in the above-referenced docket proceedings; and
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following capitalized terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.
"Agreement" means this Interconnection Agreement, including all Exhibits and Appendices attached hereto and incorporated herein by reference, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the provisions hereof.
"AGA" means the American Gas Association.
"API" means the American Petroleum Institute.
"ASME" means the American Society of Mechanical Engineers.
"ATPC" means Appalachian Trunk Pipeline Company, LLC, a Pennsylvania limited liability company, and its successors and permitted assigns.
"ATPC Interconnection Facilities" means those facilities described in Section 4.2 of this Agreement to be designed, procured, constructed, owned, operated, and maintained by ATPC on its side of the Interconnection Point.
"ATPC Milepost 412.6" means the specific location on ATPC's existing 30-inch mainline at which the physical interconnection contemplated by this Agreement will occur, as further described in Article III and Exhibit A hereto.
"Billing Determinants" has the meaning set forth in the Ridgeline FERC Gas Tariff, Original Volume No. 1, as filed with or accepted by the Commission.
"Business Day" means any day other than a Saturday, Sunday, or a day on which federal offices in Washington, D.C. are closed due to a federal holiday recognized by the United States government.
"Commencement Date" means the date on which all conditions precedent set forth in Section 5.6 have been satisfied or waived, the Interconnection Facilities have been placed in service, and gas flows have commenced through the Interconnection Point.
"Commission" or "FERC" means the Federal Energy Regulatory Commission, or any successor agency thereto.
"Confidential Information" has the meaning set forth in Section 12.1 of this Agreement.
"Construction Costs" means all costs and expenses associated with the engineering, design, procurement, construction, installation, testing, commissioning, and start-up of the Interconnection Facilities, including but not limited to costs for materials, equipment, labor, contractors, subcontractors, permits, inspections, insurance, project management, and a reasonable contingency
"Day" or "Gas Day" means, as defined by NAESB standards, a period of twenty-four (24) consecutive hours beginning at 9:00 a.m. Central Clock Time on a given calendar day and ending at 9:00 a.m. Central Clock Time on the next succeeding calendar day.
"DEH" means Dunmore Energy Holdings Ltd., a Cayman Islands exempted limited company (Cayman Registry No. CR-381204), the sole member of Ridgeline.
"Delivery Point" means, for purposes of this Agreement, the point of physical interconnection at the Wetzel County Interconnect, which is co-located with the Interconnection Point.
"Design Capacity" means the maximum throughput capacity of the Interconnection Facilities at the Interconnection Point, which shall initially be 800 MMcf/d bidirectional, and which is expandable to 1.2 Bcf/d through the construction of Expansion Facilities pursuant to Article VI.
"Dth" or "Dekatherm" means a unit of energy equal to one million (1,000,000) British Thermal Units (BTU).
"Effective Date" means July 1, 2022, or such later date as the Parties may mutually agree upon in writing.
"Emergency" means any condition, event, or circumstance that presents an imminent and material threat to public health, safety, or the environment, to the safety or physical integrity of property, or to the physical integrity or operational safety of either Party's pipeline system or facilities, including the Interconnection Facilities.
"EPC" means engineering, procurement, and construction.
"Expansion Facilities" means the additional facilities, equipment, piping, measurement equipment, and associated appurtenances necessary to increase the capacity of the Interconnection Facilities from 800 MMcf/d to 1.2 Bcf/d, as contemplated by Article VI.
"Force Majeure" has the meaning set forth in Section 10.1 of this Agreement.
"Gas" or "Natural Gas" means any mixture of hydrocarbons and noncombustible gases in a gaseous state, consisting primarily of methane, that meets the quality specifications set forth in Exhibit C attached hereto.
"Gas Chromatograph" means continuous analytical equipment designed and calibrated to measure the chemical composition, heating value, and specific gravity of Natural Gas in accordance with AGA Report No. 7 and applicable NAESB standards.
"Interconnection Facilities" means, collectively, the Ridgeline Interconnection Facilities and the ATPC Interconnection Facilities, as described in Article IV of this Agreement.
"Interconnection Point" means the Wetzel County Interconnect, located at approximately 39.6120° N latitude, 80.7540° W longitude, in Wetzel County, West Virginia, as more particularly described in Article III and Exhibit A.
"Mainline" means ATPC's existing 30-inch-diameter high-pressure natural gas pipeline, which is part of the ATPC interstate pipeline system.
"Maximum Allowable Operating Pressure" or "MAOP" means the maximum pressure at which a pipeline or pipeline segment may be operated, as designed, tested, and permitted pursuant to 49 C.F.R. Part 192 and applicable state regulations.
"MMcf/d" means million standard cubic feet per day, measured at a base temperature of sixty degrees Fahrenheit (60°F) and a base pressure of 14.73 pounds per square inch absolute (psia).
"NAESB" means the North American Energy Standards Board, or any successor organization.
"Natural Gas Act" or "NGA" means the Natural Gas Act of 1938, as amended, 15 U.S.C. §§ 717 et seq., and the rules and regulations promulgated thereunder.
"NEPA" means the National Environmental Policy Act of 1969, as amended, 42 U.S.C. §§ 4321 et seq.
"Operational Flow Order" or "OFO" means an order or directive issued by a Party's gas control center requiring shippers or interconnecting parties to take or refrain from specified actions to maintain the operational integrity, safety, or reliability of such Party's pipeline system, as further described in Section 7.2 and the Operational Protocols set forth in Exhibit D.
"Party" or "Parties" means, individually or collectively, as the context may require, Ridgeline and ATPC.
"Pig Launcher/Receiver" means pipeline inspection gauge launching and receiving equipment and associated facilities used for pipeline cleaning, internal inspection, and integrity assessment.
"Prudent Industry Practices" means practices, methods, techniques, standards, and acts that, at the time of performance, are generally recognized and accepted as good, safe, and prudent in the interstate natural gas pipeline industry, including compliance with all applicable laws, regulations, codes, and standards.
"Ridgeline" means Ridgeline Midstream Services LLC, a Delaware limited liability company, and its successors and permitted assigns.
"Ridgeline Interconnection Facilities" means those facilities described in Section 4.1 of this Agreement to be designed, procured, constructed, owned, operated, and maintained by Ridgeline on its side of the Interconnection Point.
"Ridgeline Pipeline System" means the 187-mile, 24-inch-diameter high-pressure natural gas transportation pipeline owned and operated by Ridgeline, extending from the Wetzel County Interconnect (Milepost 0.0) in Wetzel County, West Virginia, to the Waynesburg Compressor Station in Greene County, Pennsylvania, together with all associated compressor stations, meter stations, valves, appurtenances, and related facilities, as described in the Recitals hereto.
"SCADA" means Supervisory Control and Data Acquisition system, a computer-based system used for monitoring and controlling pipeline operations, including flow rates, pressures, temperatures, and valve positions.
"Target Commencement Date" means the fourth quarter of calendar year 2023 (Q4 2023), as set forth in Article V, subject to the satisfaction of the conditions precedent set forth in Section 5.6.
"Tidewater" means Tidewater Infrastructure Partners LP, a Delaware limited partnership, the sole member of ATPC.
"Ultrasonic Flow Meter" means measurement equipment utilizing ultrasonic pulse technology to determine gas flow rate and volume, designed and calibrated in accordance with AGA Report No. 9.
"Wetzel County Interconnect" means the physical point of interconnection between the Ridgeline Pipeline System and ATPC's Mainline, located in Wetzel County, West Virginia, as further described in Article III and Exhibit A hereto.
Section 1.2 — Rules of Interpretation
The following rules of interpretation shall apply to this Agreement:
(a) References in this Agreement to "Articles," "Sections," "Exhibits," and "Appendices" shall be to the Articles and Sections of, and the Exhibits and Appendices to, this Agreement, unless the context otherwise requires. All Exhibits and Appendices attached to this Agreement are incorporated herein by reference and made a part hereof.
(b) Whenever the context so requires, the singular number shall include the plural and the plural shall include the singular. Words of one gender shall include the other genders. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
(c) References to any statute, law, regulation, rule, or order shall be deemed to include references to such statute, law, regulation, rule, or order as amended, modified, supplemented, restated, or superseded from time to time, and to all successor statutes, laws, regulations, rules, and orders, unless the context otherwise requires.
(d) The headings and captions used in this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of any provision of this Agreement.
(e) If any deadline or date for the performance of any obligation or the exercise of any right under this Agreement falls on a day that is not a Business Day, such deadline or date shall be automatically extended to the next succeeding Business Day.
(f) The words "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section, or provision hereof.
(g) The word "or" shall not be exclusive.
(h) References to "dollars" or "$" shall mean the lawful currency of the United States of America.
(i) This Agreement has been negotiated by the Parties and their respective counsel. No provision of this Agreement shall be interpreted or construed against any Party on the ground that such Party or its counsel drafted such provision, and each Party waives any right to assert such a principle of construction or interpretation.
ARTICLE II — PURPOSE AND SCOPE
Section 2.1 — Purpose
The purpose of this Agreement is to establish the terms and conditions governing the physical interconnection of the Ridgeline Pipeline System with ATPC's 30-inch Mainline at ATPC Milepost 412.6, located at the Wetzel County Interconnect in Wetzel County, West Virginia. This Agreement is intended to enable the bidirectional flow of Natural Gas between the two pipeline systems at the Interconnection Point, thereby providing Ridgeline with access to the broader interstate natural gas market through ATPC's pipeline network and affording ATPC and its shippers additional supply access through the Ridgeline Pipeline System.
This Agreement further defines the respective rights and obligations of each Party with respect to the design, engineering, procurement, construction, ownership, operation, maintenance, inspection, and cost allocation of the Interconnection Facilities. The Interconnection Facilities are to be designed and constructed to accommodate the initial Design Capacity and to provide for future expansion as described in Article VI.
Section 2.2 — Scope
The scope of this Agreement encompasses the following:
(a) The initial Interconnection Facilities, comprising both the Ridgeline Interconnection Facilities and the ATPC Interconnection Facilities as described in Article IV, with a Design Capacity of 800 MMcf/d bidirectional flow capability, expandable to 1.2 Bcf/d through the construction of Expansion Facilities pursuant to Article VI.
(b) The construction of a new metering station on the Ridgeline side of the Interconnection Point, a check metering station on the ATPC side of the Interconnection Point, pig launcher/receiver facilities, and all associated appurtenances, piping, valves, control equipment, civil works, electrical systems, communications systems, and telemetry infrastructure.
(c) The operational protocols, measurement standards, gas quality specifications, maintenance procedures, and other operational matters necessary for the safe, reliable, and efficient operation of the Interconnection Facilities.
(d) The allocation of costs, risks, and liabilities between the Parties with respect to the Interconnection Facilities.
Notwithstanding the foregoing, this Agreement does not establish, and shall not be construed to establish, any obligation on either Party to transport Natural Gas for or on behalf of the other Party. Transportation service on either Party's pipeline system shall be governed exclusively by such Party's respective FERC Gas Tariff and applicable service agreements, and the terms and conditions of this Agreement are without prejudice to the rights and obligations of either Party or its shippers under such tariffs and service agreements.
This Agreement does not affect, modify, amend, or supersede either Party's existing FERC Gas Tariff, rate schedules, general terms and conditions, or any existing service agreement, except to the extent that this Agreement may itself be filed with the Commission as a rate schedule or non-conforming agreement under Ridgeline's FERC Gas Tariff, Original Volume No. 1.
Section 2.3 — FERC Jurisdiction
The Parties acknowledge and agree that this Agreement, the Interconnection Facilities, and the transportation of Natural Gas through the Interconnection Point are subject to the jurisdiction of the Commission under the Natural Gas Act, 15 U.S.C. §§ 717 et seq., and the Commission's regulations, including but not limited to 18 C.F.R. Parts 154, 157, and 284.
This Agreement is intended to be filed with the Commission as a rate schedule under Ridgeline's FERC Gas Tariff, Original Volume No. 1, in connection with the pending proceedings in Docket Nos. RP22-847-000 (rate case) and RP22-847-001 (interconnection). Nothing in this Agreement shall be construed to limit the Commission's jurisdiction over the Parties, the Interconnection Facilities, or the rates, terms, and conditions of service provided at or through the Interconnection Point.
The Parties further acknowledge that this Agreement is subject to modification, amendment, or abrogation by the Commission pursuant to its authority under the Natural Gas Act, including Sections 4 and 5 thereof. To the extent that any provision of this Agreement is inconsistent with any applicable statute, regulation, or Commission order, such provision shall be deemed to be modified to the extent necessary to comply with such statute, regulation, or order.
ARTICLE III — INTERCONNECTION POINT DESCRIPTION
Section 3.1 — Location
The Interconnection Point shall be located at the Wetzel County Interconnect, in Wetzel County, West Virginia. The approximate geographic coordinates of the Interconnection Point are 39.6120° N latitude, 80.7540° W longitude. The Interconnection Point is situated at Milepost 0.0 of the Ridgeline Pipeline System (the western terminus and receipt point of the Ridgeline system) and at ATPC Milepost 412.6 on ATPC's existing 30-inch Mainline.
A detailed legal description of the property on which the Interconnection Facilities are to be located, together with a site plan and survey reference, is set forth in Exhibit A attached hereto and incorporated herein by reference. The legal description shall include all parcels, easements, and rights-of-way necessary for the construction, operation, maintenance, and access of the Interconnection Facilities.
Section 3.2 — Site Description
The Interconnection Point is situated within an existing right-of-way corridor in a rural area of Wetzel County, West Virginia. The site includes portions of ATPC's existing pipeline right-of-way along the 30-inch Mainline, as well as land adjacent to and contiguous with Ridgeline's existing receipt point facilities at the western terminus of the Ridgeline Pipeline System. The surrounding land use is predominantly agricultural and forested.
Each Party shall be responsible for securing all easements, rights-of-way, permits, and land rights necessary for the construction, operation, maintenance, and access of its respective Interconnection Facilities at the Interconnection Point. Where construction activities or permanent facilities of one Party require access across or use of the other Party's existing easement or right-of-way, the Parties shall cooperate in good faith to obtain such access or use rights, including the grant of temporary or permanent easements or license agreements as may be reasonably necessary.
A detailed site plan, including the layout of the Interconnection Facilities, access roads, utility connections, and the relationship of the site to existing pipeline infrastructure, is set forth in Exhibit A.
Section 3.3 — Flow Direction
The Interconnection Facilities shall be designed and constructed to accommodate bidirectional flow of Natural Gas. Gas may flow from ATPC's pipeline system into the Ridgeline Pipeline System (i.e., receipt into the Ridgeline system), and Gas may also flow from the Ridgeline Pipeline System into ATPC's pipeline system (i.e., delivery from the Ridgeline system into the ATPC system).
The primary anticipated direction of gas flow is from ATPC's system into the Ridgeline Pipeline System, which is consistent with the receipt function at the western terminus of the Ridgeline system as contemplated in Ridgeline's FERC Gas Tariff filing. However, both Parties recognize that operational conditions, including system pressures, shipper nominations, and market dynamics, may from time to time require or permit reverse flow from the Ridgeline Pipeline System into ATPC's system.
Any operational constraints on reverse flow, including minimum and maximum flow rates, pressure requirements, and scheduling coordination, shall be addressed in the operational protocols to be mutually developed and agreed upon by the Parties pursuant to Section 7.2 and Exhibit D.
ARTICLE IV — INTERCONNECTION FACILITIES
Section 4.1 — Ridgeline Interconnection Facilities
Ridgeline shall design, procure, construct, own, operate, and maintain, at its sole cost and expense, the following facilities on the Ridgeline side of the Interconnection Point (collectively, the "Ridgeline Interconnection Facilities"):
(a) Metering Station. A metering station on the Ridgeline side of the Interconnection Point, including the following components:
(i) ultrasonic flow meter runs, each of 12-inch diameter, designed and calibrated in accordance with AGA Report No. 9 and capable of measuring bidirectional gas flow at rates up to and including the initial Design Capacity of 800 MMcf/d, with provision for expansion to
(ii) Gas chromatograph(s) for continuous analysis of gas quality, including heating value (BTU content), specific gravity, and chemical composition, in accordance with AGA Report No. 7 and applicable NAESB
(iii) SCADA integration and remote monitoring equipment, including flow computers, pressure transmitters, temperature transmitters, and communications equipment, capable of transmitting real-time data to both Ridgeline's and ATPC's gas control centers;
(iv) Pressure regulation and control valves, including emergency shutdown valves, sufficient to control and regulate gas flow and pressure at the Interconnection Point within the specified operating parameters;
(v) Filtration and separation equipment, including coalescing filters and moisture separators, to ensure that gas delivered at the Interconnection Point meets the quality specifications set forth in Exhibit
(b) Pig Launcher/Receiver. A pig launcher/receiver facility located at Milepost 0.0 of the Ridgeline Pipeline System, designed and constructed in accordance with ASME B31.8 and 49 C.F.R. Part 192, suitable for accommodating standard pipeline inspection gauges and cleaning tools for the 24-inch Ridgeline mainline.
(c) Interconnecting Pipe and Fittings. All interconnecting piping, fittings, flanges, gaskets, and transition pieces necessary to connect the custody transfer point at the outlet flange of the Ridgeline metering station to the Ridgeline mainline at Milepost 0.0.
(d) Electrical, Communications, and Telemetry Infrastructure. All electrical power supply, distribution, and backup power equipment (including standby generators as necessary), communications lines, fiber optic cable, satellite communications equipment, and telemetry infrastructure located on the Ridgeline side of the Interconnection Point.
(e) Civil Works and Site Improvements. All associated civil works, grading, drainage, foundations, equipment pads, control buildings, fencing, lighting, security systems, access roads, and other site improvements on the Ridgeline side of the Interconnection Point.
The estimated cost of the Ridgeline Interconnection Facilities is This cost estimate is based on preliminary engineering and is subject to final reconciliation in accordance with Section 5.5.
Section 4.2 — ATPC Interconnection Facilities
ATPC shall design, procure, construct, own, operate, and maintain, at its sole cost and expense, the following facilities on the ATPC side of the Interconnection Point (collectively, the "ATPC Interconnection Facilities"):
(a) Hot-Tap Connection and Tie-In. A hot-tap connection and associated tie-in facilities at ATPC Milepost 412.6 on the existing 30-inch Mainline, including all fittings, reinforcement pads, branch connections, and transition piping necessary to effect the physical connection between the ATPC Mainline and the Interconnection Facilities, designed and constructed to permit the hot-tap to be performed without interruption to gas flow on the ATPC Mainline.
(b) Check Metering Station. A
(c) Valves and Pressure Regulation. Isolation valves (including mainline block valves and blowdown valves), control valves, pressure regulation equipment, and emergency shutdown equipment on the ATPC side of the Interconnection Point, designed to enable safe isolation and pressure regulation at the interconnection.
(d) Pig Receiver/Launcher Stub. A pig receiver/launcher stub on the ATPC side of the Interconnection Point, designed to accommodate standard pipeline inspection gauges and cleaning tools for the 30-inch ATPC Mainline, and to coordinate with the pig launcher/receiver on the Ridgeline side.
(e) Associated Piping and Civil Works. All associated piping, fittings, flanges, valves, supports, and civil works (including grading, drainage, foundations, equipment pads, and access facilities) on the ATPC side of the Interconnection Point.
(f) SCADA Integration. SCADA integration equipment, flow computers, pressure and temperature transmitters, and communications equipment on the ATPC side, designed to interface with ATPC's existing pipeline control system and to provide real-time data exchange with Ridgeline's SCADA system as contemplated by Section 7.6.
(g) Electrical, Communications, and Telemetry Infrastructure. All electrical power supply, distribution, backup power, communications, and telemetry infrastructure located on the ATPC side of the Interconnection Point.
The estimated cost of the ATPC Interconnection Facilities is Fourteen Million Seven Hundred Thousand Dollars ($14,700,000), which represents approximately This cost estimate is based on preliminary engineering and is subject to final reconciliation in accordance with Section 5.5.
Section 4.3 — Total Interconnection Facilities Cost and Cost Allocation
The total estimated cost of the Interconnection Facilities (comprising both the Ridgeline Interconnection Facilities and the ATPC Interconnection Facilities) is A detailed breakdown of the estimated costs by major category is set forth in Exhibit E attached hereto.
The costs of the Interconnection Facilities shall be allocated between the Parties as follows:
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The basis for this cost allocation is the principle of cost causation. Each Party shall bear the cost of the Interconnection Facilities that it owns and operates on its respective side of the Interconnection Point, as described in Sections 4.1 and 4.2. The cost allocation is proportional to the scope, complexity, and cost of the facilities owned and operated by each Party and is consistent with Commission precedent on interconnection cost allocation, including the principles articulated in Order No. 2004 and related Commission decisions regarding the allocation of costs for pipeline interconnection facilities.
No Party shall be obligated to bear, reimburse, or indemnify the other Party for any portion of the costs of the other Party's Interconnection Facilities. All cost estimates set forth in this Agreement are engineering estimates based on preliminary design and are subject to final reconciliation upon completion of construction as provided in Section 5.5 and Exhibit E.
Section 4.4 — Design Capacity
The Interconnection Facilities shall have an initial Design Capacity of 800 MMcf/d bidirectional flow at the Interconnection Point. The Interconnection Facilities shall be designed and constructed with provisions to accommodate future expansion to a maximum throughput capacity of 1.2 Bcf/d through the construction of Expansion Facilities pursuant to Article VI.
The design basis for the Interconnection Facilities, including MAOP, shall be consistent with the design parameters of ATPC's 30-inch Mainline and the Ridgeline Pipeline System, as set forth in the technical specifications in Exhibit C. The Parties shall cooperate to ensure that the design of the Interconnection Facilities is compatible with the operating characteristics and safety requirements of both pipeline systems.
Section 4.5 — Ownership and Title
Each Party shall own and hold exclusive title to its respective Interconnection Facilities as described in Sections 4.1 and 4.2. Neither Party shall have any ownership interest in the other Party's Interconnection Facilities by virtue of this Agreement or any activities undertaken in connection herewith.
The custody transfer point at the Interconnection Point shall be located at the outlet flange of the Ridgeline metering station, which shall constitute the physical point of change of custody and control of Natural Gas between the ATPC system and the Ridgeline system. The custody transfer point shall also serve as the demarcation of each Party's ownership responsibility for the physical facilities at the Interconnection Point.
A clear demarcation of the ownership boundary between the Ridgeline Interconnection Facilities and the ATPC Interconnection Facilities, including the custody transfer point, shall be depicted on the engineering drawings attached as Exhibit B.
Section 4.6 — Technical Specifications
All Interconnection Facilities shall be designed, engineered, and constructed in accordance with the following applicable codes, standards, and regulatory requirements:
(a) 49 C.F.R. Part 192 — Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards, including all applicable subparts relating to design, construction, pressure testing, operations, maintenance, and integrity management.
(b) ASME B31.8 — Gas Transmission and Distribution Piping Systems, as published by the American Society of Mechanical Engineers.
(c) API Standards — Applicable standards published by the American Petroleum Institute for measurement equipment, including API MPMS (Manual of Petroleum Measurement Standards) chapters and sections relevant to gas measurement and custody
(d) NAESB WGQ Standards — Applicable standards published by the Wholesale Gas Quadrant of the North American Energy Standards Board for measurement, gas quality, and electronic data interchange.
(e) AGA Reports — AGA Report No. 9 (Measurement of Gas by Multipath Ultrasonic Meters) and AGA Report No. 7 (Measurement of Natural Gas by Turbine Meters and by Ultrasonic Meters, and by Gas Chromatography), as applicable.
(f) All applicable state and federal permits and approvals, including permits and authorizations issued by the Commission, the Pipeline and Hazardous Materials Safety Administration ("PHMSA"), the U.S. Army Corps of Engineers, the West Virginia Department of Environmental Protection, and other state and federal agencies with jurisdiction over the Interconnection Facilities or the construction activities associated therewith.
Detailed technical specifications for the Interconnection Facilities, including equipment specifications, design parameters, gas quality requirements, and pressure specifications, are set forth in Exhibit C attached hereto.
ARTICLE V — CONSTRUCTION
Section 5.1 — Construction Responsibilities
Each Party shall be solely responsible for the engineering, procurement, and construction of its own Interconnection Facilities as described in Sections 4.1 and 4.2 of this Agreement. Each Party shall engage its own EPC contractor(s) and shall bear all costs, expenses, and liabilities associated with the design and construction of its respective facilities.
The Parties shall cooperate and coordinate their respective construction activities to ensure the safe, efficient, and timely completion of the Interconnection Facilities. Ridgeline's Vice President, Engineering & Operations (Thomas Greaves) and ATPC's designated engineering representative shall serve as the primary points of contact for coordination of construction activities. Each Party shall designate an on-site construction manager who shall be available to coordinate day-to-day construction activities and resolve field-level construction issues.
Section 5.2 — Construction Schedule
The Parties shall use commercially reasonable efforts to complete the construction of the Interconnection Facilities and achieve the Target Commencement Date of Q4 2023. The following preliminary construction schedule sets forth the anticipated milestones for the Interconnection Facilities:
The foregoing construction schedule is a target schedule and is subject to receipt of FERC authorization in Docket Nos. RP22-847-000 and RP22-847-001, as well as receipt of all other required permits and governmental approvals. The Parties acknowledge that delays in regulatory proceedings, permitting, procurement, weather conditions, or other factors beyond the Parties' reasonable control may require adjustment of the construction schedule. The Parties shall keep each other informed of any material delays or schedule changes and shall cooperate in good faith to minimize any such delays.
Section 5.3 — Permits and Approvals
Each Party shall be responsible for obtaining, at its own cost and expense, all permits, licenses, approvals, authorizations, and consents from governmental authorities that are necessary or required for the construction, installation, operation, and maintenance of its respective Interconnection Facilities.
Without limiting the foregoing, Ridgeline shall be primarily responsible for obtaining FERC authorization for the physical interconnection under Section 7 of the Natural Gas Act and 18 C.F.R. Part 157, as part of the pending proceedings in Docket Nos. RP22-847-000 and RP22-847-001. ATPC shall cooperate with Ridgeline's FERC application by providing such information, data, and documentation as may be reasonably required for the Commission's review and approval of the interconnection, including technical information regarding ATPC's Mainline at the proposed interconnection location.
Environmental permits and approvals that may be required for the construction of the Interconnection Facilities include, but are not limited to, any environmental review or clearances required under the National Environmental Policy Act ("NEPA") in connection with the FERC authorization, permits under Section 404 of the Clean Water Act (33 U.S.C. § 1344) from the U.S. Army Corps of Engineers (if applicable), National Pollutant Discharge Elimination System ("NPDES") stormwater construction permits, and all applicable state-level environmental permits, including approvals from the West Virginia Department of Environmental Protection. Each Party shall be responsible for obtaining the environmental permits applicable to its own construction activities and shall conduct its construction activities in compliance with all environmental laws and regulations.
Section 5.4 — Construction Standards and Quality Assurance
All construction of the Interconnection Facilities shall be performed in compliance with the codes and standards set forth in Section 4.6, including 49 C.F.R. Part 192 and ASME B31.8, and in accordance with Prudent Industry Practices.
Each Party shall have the right, upon reasonable advance notice (not less than five (5) Business Days, except in the case of an Emergency), to inspect the other Party's Interconnection Facilities during construction to verify compliance with the agreed-upon technical specifications and applicable codes and standards. Such inspections shall be conducted during normal working hours and shall not unreasonably interfere with the inspected Party's construction activities. Any deficiencies identified during such inspections shall be promptly addressed and remedied by the responsible Party at its own cost.
Construction activities shall comply with the following specific requirements:
(a) Welding. All welding shall be performed by qualified welders in accordance with API 1104 (Welding of Pipelines and Related Facilities) and ASME Section IX (Welding, Brazing, and Fusing Qualifications). All welding procedures shall be qualified prior to use.
(b) Pressure Testing. All piping, vessels, and equipment shall be pressure tested (hydrostatic or pneumatic, as appropriate and as permitted by applicable regulations) to the test pressures specified in 49 C.F.R. Part 192, Subpart J. Test records shall be maintained and made available for inspection by the other Party.
(c) Coating and Corrosion Protection. External coatings and cathodic protection systems shall be applied and installed in accordance with 49 C.F.R. Part 192, Subpart I, and applicable industry standards.
(d) Non-Destructive Testing and Examination. Non-destructive examination (NDE) of welds and other critical joints shall be performed in accordance with applicable code requirements, including radiographic, ultrasonic, or other approved examination methods. NDE records shall be maintained and made available for inspection.
(e) As-Built Drawings. Within sixty (60) days after completion of construction of its respective Interconnection Facilities, each Party shall provide the other Party with a complete set of as-built drawings, specifications, and construction records for its facilities, in both hard copy and electronic format.
Section 5.5 — Cost Overruns and Change Orders
Each Party shall bear all cost overruns on its own Interconnection Facilities. In no event shall either Party be obligated to reimburse, indemnify, or bear any portion of cost overruns attributable to the other Party's Interconnection Facilities.
Any change order or modification to the design, scope, or specifications of the Interconnection Facilities that affects the other Party's facilities, the interconnection design, the operating parameters at the Interconnection Point, or the compatibility of the two Parties' respective facilities shall require the prior mutual written consent of both Parties. Neither Party shall implement such a change order without the other Party's prior written approval, which shall not be unreasonably withheld, conditioned, or delayed.
Within ninety (90) days after the Commencement Date, each Party shall provide the other Party with a detailed accounting of its actual Construction Costs for its respective Interconnection Facilities, including a breakdown by major cost category The Parties shall prepare a reconciliation statement comparing the actual Construction Costs to the estimated costs set forth in this Agreement and Exhibit E. Any dispute regarding the cost reconciliation shall be resolved in accordance with Article XI.
Section 5.6 — Delay; Conditions Precedent to Commencement
The Commencement Date and the commencement of gas flow at the Interconnection Point shall be conditioned upon the satisfaction of each of the following conditions precedent:
(a) FERC authorization of the interconnection and Ridgeline's initial tariff rate in Docket Nos. RP22-847-000 and RP22-847-001 shall have been obtained, and such authorization shall be final and no longer subject to rehearing or judicial review (or the Parties shall have mutually agreed to proceed notwithstanding the pendency of any such proceeding);
(b) All Interconnection Facilities (both the Ridgeline Interconnection Facilities and the ATPC Interconnection Facilities) shall have been completed and shall have successfully passed all required pressure tests, commissioning tests, and safety inspections in accordance with the applicable codes and standards;
(c) All required federal, state, and local permits and governmental approvals for the construction and operation of the Interconnection Facilities shall have been obtained and shall be in full force and
(d) The Parties shall have mutually agreed upon the written operational protocols required under Section 7.2 and Exhibit
If any of the foregoing conditions precedent is not satisfied by the Target Commencement Date (Q4 2023), the Parties shall negotiate in good faith to agree upon a revised construction schedule and a revised Target Commencement Date. Neither Party shall be liable to the other Party for any delay in the Commencement Date caused by a Force Majeure event, by delays in FERC regulatory proceedings, or by any other cause beyond such Party's reasonable control, provided that the affected Party uses commercially reasonable efforts to mitigate and overcome such delay.
ARTICLE VI — EXPANSION
Section 6.1 — Expansion Right
Either Party may, at any time after the Commencement Date, request expansion of the Interconnection Facilities from the initial Design Capacity of 800 MMcf/d to a maximum capacity of 1.2 Bcf/d by providing written notice to the other Party (an "Expansion Request"). The Expansion Request shall describe the proposed scope of the Expansion Facilities, the anticipated increase in capacity, the estimated schedule, and a preliminary cost estimate.
Any expansion of the Interconnection Facilities shall be subject to the mutual agreement of both Parties on the scope, design, technical specifications, cost allocation, construction schedule, and operational protocols for the Expansion Facilities. The Parties shall negotiate in good faith to reach such agreement within one hundred twenty (120) days of receipt of an Expansion Request.
Any expansion shall also be subject to receipt of all required governmental and regulatory approvals, including any authorization from the Commission that may be required under the Natural Gas Act.
Section 6.2 — Expansion Cost Allocation
The costs of the Expansion Facilities shall be allocated between the Parties based on the same cost-causation principles applied to the initial Interconnection Facilities under Section 4.3 of this Agreement. Specifically, each Party shall bear the cost of the Expansion Facilities that it owns and operates on its respective side of the Interconnection Point, unless the Parties otherwise agree in writing.