East Australian

Pipeline Limited

ACN 064 629 009

ACCESS ARRANGEMENT
5 May 1999

TABLE OF CONTENTS

1.	INTRODUCTION	1
2.	BACKGROUND - EAPL	1
3.	THE PIPELINE	1
4.	EXISTING UTILISATION AND SPARE CAPACITY	2
5.	COMMENCEMENT	2
6.	SERVICES OFFERED	3
7.	APPLYING FOR ACCESS	3
8.	TARIFFS AND POLICIES	8
9.	TYPES OF REFERENCE SERVICES	11
10.	OTHER  SERVICES	17
11.	REBATABLE SERVICES	21
12.	ORDER OF PRIORITY OF SERVICE	22
13.	TERMS AND CONDITIONS	23
14.	CAPACITY MANAGEMENT POLICY	23
15.	TRADING POLICY	24
16.	EXTENSIONS AND EXPANSIONS	24
17.	REVISIONS	25

ATTACHMENT 1
DEFINITIONS AND INTERPRETATION	26

ATTACHMENT 2
TARIFFS FOR REFERENCE SERVICES	28

ATTACHMENT 3
PRINCIPLES FOR TERMS AND CONDITIONS OF SERVICE	35
ATTACHMENT 4

OPERATIONAL REQUIREMENTS AND PROVISIONS	53

ATTACHMENT 5

MAP OF PIPELINE	55

ATTACHMENT 6
REQUEST SHEET FOR SERVICES	56

ATTACHMENT 7

GAS QUALITY SPECIFICATION	58

1.	INTRODUCTION
1.1	This Access Arrangement, submitted to the ACCC by EAPL under the Gas Pipelines Access Law and section 2.2 of the National Third Party Access Code for Natural Gas Pipeline Systems (“the Code”), sets out the policies and basic terms and conditions applying to third party access to the Moomba – Sydney Pipeline System owned and operated by EAPL.  
1.2	This Access Arrangement includes a Services Policy, Reference Tariffs, Reference Tariff Policy, Terms and Conditions, Capacity Management Policy, Trading Policy, Queuing Policy, Extensions/Expansions Policy, Revisions Submission Date and Revisions Commencement Date. 
1.3	Terms and expressions used in this Access Arrangement (other than Attachment 3) have the meanings set out in Attachment 1.
2.	BACKGROUND - EAPL
2.1	EAPL  owns and operates the Moomba – Sydney pipeline system, originally constructed in the mid 1970’s to deliver natural gas from the Cooper Basin in South Australia to Sydney.
2.2	The registered office of the company is, at the date of this Access Arrangement, at 189 Gladstone Street, Fyshwick in the Australian Capital Territory.
2.3	EAPL operated under the Moomba Sydney Pipeline System Sale Act 1994 (Cmwlth), Part 6 of which (now repealed) contained provisions regulating the management of the Pipeline.  Consistent with that Act, EAPL has since 1994 offered transportation on the Pipeline to third parties in accordance with a set of policies and conditions developed for third party access to the Pipeline.
3.	THE PIPELINE
3.1	The Pipeline consists of the Moomba to Sydney pipeline system,  a natural gas transmission pipeline system extending from Moomba in South Australia to Wilton (Sydney) in New South Wales, together with:
(a)	a pipeline from Young to Cootamundra and Wagga Wagga in NSW and an extension to that pipeline from Wagga Wagga to Culcairn in NSW (which is known as the Interconnect);
(b)	lateral pipelines from Young to Bathurst, Orange, Lithgow and Oberon in NSW;
(c)	a lateral pipeline from Dalton on the Moomba - Sydney pipeline to Canberra in the Australian Capital Territory;
(a)	
(d)	a lateral pipeline from Burnt Creek on the Young – Wagga Wagga pipeline to Junee, Griffith, Leeton and Narrandera in NSW

through which Gas is transported.
3.2	The Pipeline comprises two components for the purpose of setting Reference Tariffs, namely:
(1)	the mainline pipeline from Moomba to Young, Young to Wilton and Young to Culcairn (“the Mainline”); and
(2)	lateral pipelines comprising all other pipelines except those referred to in clause 3.2(1) (“the Laterals”).
3.3	A map of the Pipeline is at Attachment 5.
3.4	Under the terms of the Code, the Pipeline is a Covered Pipeline except for the  extension between Wagga Wagga and Culcairn.  That extension is treated as part of the Covered Pipeline for the purposes of this Access Arrangement.

4.	EXISTING UTILISATION AND SPARE CAPACITY
4.1	Capacity on the Pipeline is committed to certain third parties including those under agreements put in place when the Commonwealth sold the Moomba – Sydney Pipeline to EAPL.  
4.2	Spare Capacity will be determined from time to time by EAPL in accordance with the Code and set out in the Capacity Register.

5.	COMMENCEMENT
5.1	This Access Arrangement comes into effect on the later of:
(a)	1 July 2000; and 
(b)	the date specified by the ACCC in its approval of this Access Arrangement.
1.	
6.	SERVICES OFFERED
6.1	Classes of Service Offered: 
(1)	The  following categories of Service are available under this Access Arrangement:
(a)	two Reference Services:
(i)	a Reference Service with a related Reference Tariff for firm transportation service (Class FT Service); and
(ii)	a Reference Service with a related Reference Tariff for firm transportation service intended to promote the development of small regional markets (Class STP Service);
(b)	three Rebatable Services with biddable tariff features (Class WFT Service, Class OFT Service and Class IT Service). These Services are intended to promote the efficient growth of the Gas market and increase the use of the Pipeline; and
(c)	a Negotiable Service with negotiable tariffs and negotiable terms and conditions.
(2)	These Services are described in more detail below in Sections 9 and 10.

7.	APPLYING FOR ACCESS
7.1	Requests for Service
(1)	Prospective Users must submit a request in writing in the form specified by EAPL.  The current form is at Attachment 6.  The application must include the following information:
(a)	name, Australian Company Number (or ARBN) and registered office of the Prospective User;
(b)	if the Prospective User is a subsidiary company, the name, Australian Company Number (or ARBN) and registered office of the parent company;
(c)	the class of Service required;
(d)	the proposed Receipt Points and Delivery Points;
(e)	the term for which the service is requested (including a commencement and termination date);
(f)	the requested MDQ by year over the term;
(g)	the estimated annual quantity by year over the term; and
(h)	any relevant technical requirements such as delivery pressure or Gas quality.
(2)	Acceptance by EAPL of a request from a Prospective User will be subject to the Prospective User satisfying EAPL’s reasonable prudential requirements, which may be in the form of the most recent audited financial statements of the Prospective User (and its parent company if it is a subsidiary company).  If the prudential requirements  are not met, EAPL may reject the request by notice in writing to the Prospective User.
(3)	If a request does not contain all of the information required by EAPL, the Prospective User will be advised of the deficiencies.  If the Prospective User does not rectify the deficiency within 14 days, the request may be rejected by notice to the Prospective User by EAPL.
(4)	EAPL is not obliged to accept a request from a Prospective User where EAPL reasonably believes that the Prospective User already has a current request in respect of that same capacity.
(5)	Within 30 days of receipt of a fully compliant request EAPL will notify the Prospective User in writing that its application for Service has been accepted and that the Prospective User’s application has been registered.
7.2	Queue Process
(1)	A queue process will be established and maintained by EAPL for the orderly allocation of Capacity.  All registered applications for Class FT Service, Class STP Service and Negotiable Service will be placed in the queue.
(2)		Prospective User applications for Services to which the queue applies will be listed in the date and time order in which the applications are registered in accordance with clause 7.1(5).
(3)	Where an application for Service to which the queue applies has been placed in the queue, EAPL will  provide the following information to the Prospective User on request at reasonable intervals and when the Prospective User’s queue position is elevated:
(a)	the available Capacity at the requested Receipt and Delivery Point; and 
(b)	the current position of the  complying request in the queue.
(4)	Without affecting their place in the queue, Prospective Users in the queue may, in accordance with the bidding process established by EAPL, bid for Class IT Service, Class OFT Service or Class WFT Service.  
(5)	The queuing process and the availability of Capacity is at all times subject to any preserved contractual rights pursuant to section 2.25 of the Code.
7.3	Notification of Capacity Availability
(1)	When notifying a Prospective User that its request has been registered on the queue EAPL will also either advise the Prospective User that:
(a)	Spare Capacity exists to satisfy the request and offer that Spare Capacity to the Prospective User in accordance with the provisions of this Access Arrangement; 
(b)	Spare Capacity does not presently exist and that the Prospective User has been registered on the queue; or
(c)	investigations are required to be undertaken prior to advising the Prospective User whether or not Spare Capacity exists.
(2)	If Spare Capacity does not exist, EAPL will, upon registration of the Prospective User in the queue, provide the Prospective User with:
(a)	an explanation why Spare Capacity does not exist to satisfy the request and indicating, based on current commitments, when the requirement might be satisfied; or
(b)	notification that investigations need to be undertaken prior to responding to the request. 
(3)	If investigations need to be undertaken, EAPL will also provide the Prospective User with the information required by section 5.5 of the Code including the cost of any such investigation.  
(4)	Within 30 days of EAPL providing a Prospective User with the cost of any investigation, the Prospective User must sign an acknowledgement, in such form as EAPL may require, that it will pay EAPL the reasonable costs of undertaking the investigation.  If the Prospective User fails to do so EAPL is not required to proceed with the investigation.
7.4	Conditions Applicable to the Queue
(1)	Prior to the date on which EAPL notifies a Prospective User registered in the queue that Capacity exists,  a Prospective User may reduce but not increase the Capacity sought in its application without affecting the Prospective User’s queue position.
(2)	EAPL may periodically seek confirmation from a Prospective User that it wishes to remain in the queue.  If a Prospective User fails to respond within 14 days that it wishes to continue with its registration, the registration will lapse, will be removed from the queue and the Prospective User’s position on the queue will be lost.
(3)	A Prospective User may assign its registration in the queue to a bona fide purchaser of the Prospective User’s business and/or assets with the consent of EAPL, which will not be unreasonably withheld.  The assignee must provide EAPL with the same information as it would be required to provide were it making a request for Service under clause 7.1.
7.5	Offering Capacity
General Procedure
(1)	When Spare Capacity on the Pipeline is available or is anticipated by EAPL to become available, that Capacity will be progressively offered to each Prospective User in the queue in order of registration, even if that Capacity is not sufficient to wholly meet the needs of the Prospective User or the date from which the Capacity will be available is different to the Commencement Date specified by the Prospective User in its request.
(2)	The method by which the offer is made is that EAPL will, within 30 days of the Spare Capacity being available or is anticipated by EAPL to become available, either:
(a)	provide a Term Sheet to the Prospective User who has first priority.  EAPL will also provide all of the applicable terms and conditions on which EAPL will offer the Service requested; or
(b)	advise the Prospective User who has first priority that investigations need to be undertaken prior to responding to that Prospective User’s application.  Subject to clause 7.5(4), upon completion of the investigations, EAPL will provide a Term Sheet to the Prospective User with all of the applicable terms and conditions on which EAPL will offer the Service requested.  

Investigation Procedure
(3)	If investigations need to be undertaken, EAPL will also provide the Prospective User with the information required by section 5.5 of the Code and the cost of any such investigation.  
(4)	Within 30 days of EAPL providing a Prospective User with the cost of any investigation, the Prospective User must sign an acknowledgement, in such form as EAPL may require, that it will pay EAPL the reasonable costs of undertaking the investigation. If the Prospective User fails to do so, EAPL may offer the Spare Capacity successively to other Prospective Users in the queue and the Prospective User’s place in the queue will be lost.
(5)	If investigations are required to meet a Prospective User’s request then after the investigations are completed, the Prospective User will be offered capacity in accordance with clause 7.5(2). The Term Sheet will include:
(a)	the amount of any applicable surcharge for any enhanced or new facilities; and
(b)	the date when the Prospective User’s request can be satisfied having regard to matters such as construction, licensing and approvals period for the new facilities.

Conditional Concurrent Offers
(6)	EAPL may make offers of Spare Capacity to Registered Users other than the first on the queue but on the basis that the offer is conditional on:
(a)	a Prospective User who is higher in the priority order not taking up the Spare Capacity; and/or
(b)	other Prospective Users concurrently offered a proportion of Spare Capacity also taking up that proportion of Spare Capacity.
Concluding a Service Agreement
(7)	Where EAPL has offered Spare Capacity to a Prospective User, the Prospective User may, by signing the Term Sheet and returning it to EAPL within 14 days, accept the offer in the Term Sheet. If the Term Sheet is not accepted by the Prospective User within that time the request for service lapses unless an access dispute has been notified pursuant to the Code.
(8)	EAPL will, upon acceptance of the Term Sheet, issue to the Prospective User a Service Agreement (and if appropriate an Enhanced Facilities Agreement) consistent with the Term Sheet. 
(9)	The Prospective User must, within 30 days from the date of issue of the Service Agreement  either:
(a)	sign the Service Agreement and return it to EAPL; or
(b)	notify EAPL in writing that the Prospective User wishes to enter negotiations over the Service Agreement, other than the essential terms set out in the Term Sheet including MDQ, tariffs and Receipt Points and Delivery Points.
(10)	If clause 7.5(9)(b) applies, the parties must enter bona fide negotiations to attempt to reach agreement on the Service Agreement.
(11)	If the parties are unable to agree on the terms and conditions of the Service Agreement and do not sign the agreement within 30 days of receipt of a notice under clause 7.5(9)(b), either party may at any time thereafter terminate further negotiations. 
(12)	If either clause 7.5(9)(a) is not complied with or negotiations are terminated under clause 7.5(11), the request for service will lapse unless EAPL and the Prospective User otherwise agree.
(13)	The Prospective User must have:
(a)	entered into a Service Agreement;
(b)	reasonably demonstrated that it has made appropriate arrangements for upstream and downstream transport and supply of Gas;
(c)	reasonably demonstrated its financial ability to pay for the services;
(d)	subject to the financial standing of the Prospective User, if requested by EAPL, provided a satisfactory performance guarantee or other satisfactory security to EAPL guaranteeing the performance of its obligations under its Service Agreement; 
(e)	entered into an Enhanced Facilities Agreement if enhanced facilities are required;  and
(f)	reasonably demonstrated to EAPL’s reasonable satisfaction, if enhanced facilities are required, that it has or will be able to obtain all necessary regulatory approvals and licences
prior to EAPL being under any obligation to provide any Services.
Resort to Code Procedures
(14)	A request will not lapse and will retain its priority in the queue in the event of an access dispute being notified under the Code, until the dispute has been resolved in accordance with the Code.
8.	TARIFFS AND POLICIES  
8.1	General Principles and Policy 
(1)	In developing its proposed Services and Tariffs in this Access Arrangement EAPL has focussed on the following objectives:
(a)	achieving greater utilisation of the Pipeline;
(b)	providing a flexible tariff structure that can be responsive to price sensitive markets;
(c)	providing encouragement for the growth of natural Gas markets;
(d)	identifying new market opportunities;
(e)	generating sufficient revenue to operate the Pipeline safely and reliably and to provide a fair return on the capital invested in the Pipeline; and
(f)	providing an incentive to all affected parties to retain and develop Gas markets through market responsive Reference Tariffs and Rebatable Services.
8.2	Reference Tariff Principles and Policies
(1)	The following principles apply to the development of EAPL’s Reference Tariffs:
(a)	a current cost accounting methodology is used to determine the revenue requirement;
(b)	the Initial Capital Base is valued by the application of the depreciated optimised replacement cost methodology. Other methodologies described in Section 8.10 of the Code have been considered;
(c)	a real pre tax rate of return of 8.4% will be applied to the Initial Capital Base; 
(d)	the rate of return is set to provide EAPL with a return commensurate with prevailing conditions in capital markets and with the risks involved in providing the Reference Services;
(e)	Reference Tariffs are structured to reflect the costs of providing the Reference Services;
(f)	total costs are to be recovered from  Class FT Service and Class STP Service which will be eligible to rebates from  Rebatable Service;
(g)	Reference Tariffs are to reflect the distance the Gas is transported through the Pipeline; and
(h)	a portion of the proceeds from the Rebatable Services will be applied to the depreciation reserve to reflect the increased usage of the Pipeline.
(2)	The Capital Base at the end of this Access Arrangement period will be adjusted to account for New Facilities Investment, Depreciation Redundant Capital and inflation as measured by the annual CPI.
(3)	The Capital Base at the commencement of the subsequent Access Arrangement period will include the actual cost of the New Facilities if the actual cost of the New Facilities differs from the forecast New Facilities Investment in this Access Arrangement.
(4)	EAPL will decide in the future, with the ACCC’s approval, whether extensions and expansions that are not included in the Capital Base will be treated as part of the Covered Pipeline.
(5)	EAPL may undertake New Facilities Investments in the future that do not meet the requirements of the Code for inclusion in the Capital Base.
(6)	In addition to the applicable Reference Tariffs EAPL has elected to apply a tariff surcharge to Users of expansion/extension facilities where the NPV of revenue based on a Reference Tariff is less than the NPV of the cost of owning and operating the facilities plus a contribution for the use of existing facilities.
(7)	EAPL has established Reference Tariffs for Reference Services on the basis of government taxes, charges, levies, imposts and fees applying at 30 April 1999.  In the event that any new or increased taxes, charges, levies imposts or fees occur, EAPL will adjust the Reference Tariffs to recover such costs.  Should any reductions in such imposts occur the Reference Tariffs will be reduced accordingly.  This arrangement will include any  GST.
(8)	EAPL has selected a price path approach whereby the Reference Tariffs for Reference Services are established for five years in advance.  During the Access Arrangement period the Reference Tariffs will only be adjusted for:
(a)	new or increased taxes, charges, levies, imposts or fees; and
(b)	CPI-related escalation in accordance with Attachment 2.
(9)	
An amount in respect of the balance after deducting the Recoverable Portion of the New Facilities Investment may subsequently be added to the Capital Base if at any time the type and volume of services provided using the increase in Capacity attributable to the New Facility change such that any part of the Speculative Investment Fund would then satisfy the requirements of the Code for inclusion in the Capital Base.
9.	TYPES OF REFERENCE SERVICES 

The following describes the Reference Services available under this Access Arrangement.
9.1	Class FT – Firm Transportation Service
(1)	Scope
This Service is intended for a Prospective User who wants Service on a firm basis provided that Capacity is available.
(2)	Nature of Service
(a)	EAPL will receive into the Pipeline Quantities of Gas up to the MDQ and MHQ at a Receipt Point and deliver from the Pipeline Quantities of Gas up to the MDQ and MHQ at a Delivery Point as specified in the Service Agreement.  Users will be required to establish an MDQ and MHQ which fairly reflect their maximum daily and hourly requirement at each Delivery Point. 
(b)	Class FT Service will be provided on a Firm Service basis and will not be subject to curtailment or interruption except as set out in this Access Arrangement and the Service Agreement. 
(c)	The minimum term for Class FT Service is one year and the maximum is twenty years.  The term is determined by the User. 
(d)	Class FT Service Users are required to submit daily nominations in accordance with Attachment 4.  
(e)	Class FT Service may include multiple Receipt or Delivery Points if individual receipt and delivery obligations are set out on a point-to-point basis in the Service Agreement.
(3)	Reference Tariffs Description
The Reference Tariffs for  Class FT Service consist of:
(a)	two Capacity Reference Tariffs in $/TJ/day/mth/km, one applying to the Mainline and the other applying to the Laterals; and 
(b)	two Throughput Reference Tariffs in $/TJ/km, one applying to the Mainline and the other applying to the Laterals.

The Reference Tariffs applicable from the Commencement Date are set out in Attachment 2.

Where a Service of this class extends beyond the Revisions Commencement Date, the tariffs will be revised in accordance with the then applicable Access Arrangement.
(4)	Charges for Service Based on Reference Tariffs
(a)	The charge payable by the User for Class FT Service for each month of the Service Agreement term (and pro rata for part months) will be the sum of:-
(i)	the Capacity Charges for Mainline and Laterals; and
(ii)	the Throughput Charges for Mainline and Laterals; and
(iii)	other charges set out in section 9.1(4)(d)

where:
(b)	each Capacity Charge equals the product of:
(i)	Capacity Reference Tariff in $/TJ/day/mth/km; and
(ii)	the Pipeline distance from Receipt Point to Delivery Point comprised of Mainline and Laterals sections; and
(iii)	the MDQ specified in the Service Agreement for the relevant month for which the charge applies, expressed in TJs per day.
(c)	each Throughput Charge equals the product of:-
(i)	Throughput Reference Tariff in $/TJ/km; and
(ii)	the distance in kilometres transported through the Pipeline from Receipt Point to Delivery Point comprised of Mainline and Laterals sections; and
(iii)	Actual monthly Quantity delivered to the User, in TJ.
(d)	Other charges payable by the User, if incurred, are:
(i)	overrun charges;
(ii)	balancing charges; 
(iii)	odorisation charges; and
(iv)	capacity surcharge if applicable for enhanced facilities.
These other charges are calculated in accordance with Attachment 2 (other than the capacity surcharge).
Where a Service of this class extends beyond the Revisions Commencement Date, the charges will be revised in accordance with the then applicable Access Arrangement.
(5)	Backhaul Credits
(a)	For any segment of the Pipeline where Backhaul of the User’s Gas occurs based on monthly flows as determined by EAPL, the User will be entitled to the following reductions for the backhaul Quantity:
(i)	a 50 % discount on the Capacity Charge; and
(ii)	a waiver of the Throughput Charge. 
(6)	Service Agreement and Terms and Conditions
EAPL will provide the Reference Service under a Service Agreement on the terms and conditions consistent with the Principles (see Attachment 3).
9.2	Class STP – Small Take-off Point Service
(1)	Scope
Class STP Service is intended for Prospective Users who want Service on a firm basis where the transport of Gas will promote the development of small regional natural Gas markets at new Delivery Points where the Quantity of Gas at a new Delivery Point is not expected to exceed 200 TJ per year. EAPL’s concessional tariff is intended to reduce the delivered cost of Gas to small communities. This Service is available to a Prospective User provided that Capacity is available.
(2)	Nature of Service
(a)	EAPL will provide, and the User will pay for, an offtake from the Pipeline with pipework extending to an isolating valve at the edge of EAPL’s easement.  EAPL will not provide any metering facilities and the User is obliged to provide to EAPL metering information generated from the metering facilities in a form reasonably acceptable to EAPL.  The Prospective User must also provide, maintain and operate suitable pressure reduction, control equipment, associated facilities and land at the Delivery Point adjacent to the Pipeline.
(b)	Class STP Service has the same level of priority as Class FT Service, Class WFT Service, Class OFT Service and other Firm Services and will not be subject to curtailment or interruption except as set out in this Access Arrangement and the Service Agreement.
(c)	EAPL will receive into the Pipeline Quantities of Gas up to the MHQ at a Receipt Point and deliver from the Pipeline Quantities of Gas up to the MHQ at a Delivery Point as specified in the Service Agreement.  Users will be required to establish a MHQ which fairly reflects their maximum hourly requirement at the Delivery Point.
(d)	Where the deliveries to a Class STP Service Delivery Point increase beyond the 200TJ per year level, the User may with EAPL’s prior approval, convert the Service Agreement to a Class FT Service.  Any new facilities required to effect the conversion will be subject to the same conditions as for other new facilities set out in the extensions/expansions policy in section 16 (including the payment by the User of a surcharge for the new facilities).  The MDQ to be established under the Class FT Service must reasonably reflect the User’s requirements and not be in excess of 2 TJ per day.
(e)	Class STP Service Users will not be required to submit daily nominations but may provide a nomination for each day for a period not exceeding one month.  In the absence of such nomination, EAPL will determine the delivery Quantity for each day from the estimated annual Quantity set out in the Service Agreement.
(f)	The minimum term for Class STP Service is one year and the maximum term is twenty years.  The term is determined by the User.
(3)	Reference Tariffs Description
(a)	The Reference Tariffs for Class STP Service are made up as follows:
(i)	a Capacity Reference Tariff in $/TJ/km for the Mainline and Lateral sections as appropriate, equal to:

where:
A is equal to the Capacity Reference Tariff for Class FT Service for that Mainline and Lateral section in $/TJ/day/mth/km; and
B is equal to the annual Quantity in TJ delivered to the User

			and

			30.4375 = 365.25/12 (average number of days per month)
(ii)	Throughput Reference Tariffs for the Mainline and Lateral sections as appropriate in $/TJ/km, equal to the Throughput Reference Tariffs for Class FT Service.
(4)	Charges for Service Based on Reference Tariffs
(a)	The charge payable by the User for Class STP Service for each year of the Service Agreement term (and pro rata for part years) will be the sum of:-
(i)	the Capacity Charges for Mainline and Laterals;
(ii)	the Throughput Charges for Mainline and Laterals; and
(iii)	other charges set out in section 9.2(4)(e) and (f)

where:
(b)	each Capacity Charge equals the product of:
(i)	Capacity Reference Tariff in $/TJ/km;
(ii)	the Pipeline distance from Receipt Point to Delivery Point comprised of Mainline and Laterals sections; and
(iii)	Actual annual Quantity delivered to the User, in TJ.
(c)	each Throughput Charge equals the product of:
(i)	Throughput Reference Tariff in $/TJ/km; 
(ii)	the distance in kilometres transported through the Pipeline from Receipt Point to Delivery Point comprised of Mainline and Laterals sections; and 
(iii)	Actual annual Quantity delivered to the User, in TJ.
(d)	Where the annual Quantity is reasonably expected to be less than 50 TJ, the User and EAPL may agree to annual instead of monthly invoicing.
(e)	The minimum annual payment for Class STP Service is $6,000 per annum.
(f)	The User will also pay a balancing charge and odorisation charges calculated in accordance with Attachment 2.
(g)	Where a Service extends beyond the Revisions Commencement Date, the tariffs and charges will be revised in accordance with the then applicable Access Arrangements.
(5)	Backhaul Credits
For any segment of the Pipeline where Backhaul of the User’s Gas occurs based on monthly flows as determined by EAPL, the User will be entitled to the following reductions for the backhaul Quantity in the relevant period which was transported:
(i)	a 50 % discount on the Capacity Charge; and 
(ii)	a waiver of the Throughput Charge. 
(6)	Service Agreement and Terms and Conditions
EAPL will provide the Reference Service under a Service Agreement on the terms and conditions consistent with the Principles (see Attachment 3).
9.3	Reference Tariff After 30 June 2005
When the  date of effect of a subsequent Access Arrangement is later than 1 July 2005, the Reference Tariffs for the Reference Services for the period after 30 June 2005, will be adjusted as follows:
(i)	For the purposes of this paragraph 9.3, “CPI” means the Consumer Price Index (All Groups Weighted Average of Eight Capital Cities) published by the Australian Bureau of Statistics.  If that index no longer exists, “CPI” means an index that EAPL reasonably determines best reflects that Index.
(ii)	On 1 July 2005, and on each 3 months thereafter (“Review Date”) the Reference Tariffs will be revised to an amount represented by A where:

where:

B	=	the Reference Tariff payable immediately before the relevant Review Date
	
C	=	the CPI for the quarter last published before the relevant Review Date

D	=	the CPI for the quarter three months prior to that represented by C	
10.	OTHER SERVICES
10.1	The following describes other  Services available under this Access Arrangement but which are not Reference Services.
10.2	Negotiable Service
If a Prospective User’s requirements and circumstances vary significantly from those conditions on which the Reference Tariff for Reference Services is based, that Prospective User may seek to negotiate different terms and conditions, including tariff as a Negotiable Service. Negotiable Service will have priority agreed on a case by case basis but will not be higher than Firm Service.
10.3	Class WFT - Winter Season Firm Service 
(1)	Scope
(a)	Subject to capacity being available, Class WFT Service will be offered for a period between 1 June and 30 September each year.  EAPL will call for expressions of interest for Class WFT Service from Prospective Users in the national press prior to 1 March in each year. 
(2)	Nature of Service
(a)	The term for Class WFT Service is not less than 1 month and not more than 4 months as determined by EAPL.  A User’s tariff, MHQ and MDQ will be established by a bidding process.
(b)	EAPL will receive into the Pipeline Quantities of Gas up to the MDQ and MHQ at a Receipt Point and deliver from the Pipeline Quantities of Gas up to the MDQ and MHQ at a Delivery Point as specified in the Service Agreement.  Users will be required to establish a MDQ and MHQ which fairly reflects their maximum daily and hourly requirement at each Delivery Point.
(c)	Class WFT Service will be provided on a Firm Service basis and will not be subject to curtailment or interruption except as provided in this Access Arrangement the Class WFT Service Agreement.
(d)	The User will be required to submit daily nominations in accordance with Attachment 4. Any daily nomination up to the MDQ will be treated as Firm Service. 
(e)	Service Agreements for Class WFT Service will not be renewable.
(f)	Class WFT Service may include multiple Receipt or Delivery Points if individual receipt and delivery obligations are set out on a point-to-point basis in the Service Agreement.
(3)	Tariffs and Charges
(a)	Tariffs and charges for Class WFT Service will be determined in accordance with the bidding procedures established by EAPL (see clause 11.2). 
(b)	Other charges payable by the User for Class WFT Service are as follows:
(i)	overrun charges at the Class FT Service overrun charge;
(ii)	odorisation charges; and
(iii)	balancing charges.
These other charges are calculated in accordance with Attachment 2.
(4)	Terms and Conditions
(a)	Terms and conditions relating to Class WFT Service will be available to Prospective Users at the time expressions of interest are sought.  These will be similar to those applying to Class FT Service.
10.4	Class OFT - Off Season Firm Service 
(1)	Scope
(a)	Subject to capacity being available, Class OFT Service will be offered for a period between October and May each year.  Availability during the months of October and May will be determined by EAPL after considering its maintenance schedule and market demand for this service during these months.  EAPL will call for expressions of interest for Class OFT Service from Prospective Users in the national press prior to 1 July in each year.
(2)	Nature of Service
(a)	The term for Class OFT Service must be not less than 1 month and not more than 8 months as determined by EAPL.  A User’s tariff, MHQ and MDQ will be established by a bidding process.
(b)	EAPL will receive into the Pipeline Quantities of Gas up to the MDQ and MHQ at the Receipt Point and deliver from the Pipeline Quantities of Gas up to the MDQ and MHQ at the Delivery Point as specified in the Service Agreement.  Users will be required to establish a MDQ and MHQ which fairly reflects their maximum daily and hourly requirement at each Delivery Point.
(c)	Class OFT Service will be provided on a Firm Service basis and will not be subject to curtailment or interruption except as provided in this Access Arrangement and the Class OFT Service Agreement. 
(d)	The User will be required to submit daily nominations in accordance with Attachment 4. Any daily nomination up to the MDQ will be treated as Firm Service. 
(e)	Service Agreements for Class OFT Service will not be renewable.
(f)	Class OFT Service may include multiple Receipt or Delivery Points if individual Capacity obligations are set out on a point-to-point basis in the Service Agreement.
(3)	Tariffs and Charges
(a)	Tariffs and charges for Class OFT Service will be determined in accordance with the bidding procedures established by EAPL (see clause 11.2). 
(b)	Other charges payable by the User for Class OFT Service are as follows:
(i)	overrun charges at the Class FT Service overrun tariff; 
(ii)	odorisation charges, and
(iii)	balancing charges.

These other charges are calculated in accordance with Attachment 2.
(4)	Terms and Conditions
(a)	Terms and conditions relating to Class OFT Service will be available to Prospective Users at the time expressions of interest are sought.  These will be similar to those applying to Class FT Service.
10.5	Class IT - Interruptible Service 
(1)	Scope
(a)	Subject to capacity being available, Class IT Service will be offered at least twice each year. EAPL will call for expressions of interest from Prospective Users of Class IT Service in the national press prior to each bidding period.
(2)	
Nature of Service
(a)	The term for Class IT Service will be at least one month as specified by EAPL in setting the bidding process.  Each User’s tariff, MHQ and MDQ and the priority amongst Users of Class IT Service will be established by means of the bidding process.
(b)	If capacity in the Pipeline is not required for a Firm Service or any other class of service, EAPL will receive into the Pipeline Quantities of Gas up to the User’s MDQ and MHQ at the Receipt Point and deliver from the Pipeline Quantities of Gas up to the MDQ and MHQ at the Delivery Point as specified in the Service Agreement. 
(c)	Class IT Service will be subject to whole or partial interruption by EAPL at any time or by the User on short notice subject to the terms and conditions specified in the Service Agreement.  The User will be required to submit daily nominations in accordance with Attachment 4.
(d)	The Service Agreement for Class IT Service will not be renewable. 
(e)	Service Agreements for Class IT Service may include multiple Receipt or Delivery Points if receipt and delivery obligations are set out on a point-to-point basis in the Service Agreement.
(3)	Tariffs and Charges
(a)	Tariffs and charges for Class IT Service will be determined in accordance with the bidding procedures established by EAPL (see clause 11.2).
(4)	Other Charges
(a)	Other charges payable by the User are:
(i)	overrun charges payable for Class IT Service at the Class FT Service overrun tariff;
(ii)	odorisation charges; and
(iii)	balancing charges.
These other charges are calculated in accordance with Attachment 2.
(5)	Terms and Conditions
Users will be required to enter into a Service Agreement with EAPL.  Terms and conditions relating to Class IT Service will be available to Prospective Users at the time expressions of interest are sought.
11.	REBATABLE SERVICES
11.1	The following Services are Rebatable Services:
(1)	Class WFT Service (see clause 10.3);
(2)	Class OFT Service (see clause 10.4); and
(3)	Class IT Service (see clause 10.5).
11.2	Bidding Process for Rebatable Services
(1)	EAPL will establish a bidding process for Rebatable Services each year after consultation with the market and the ACCC.  The bidding procedure will include but not be limited to the following features:
(a)	EAPL may specify a minimum bid price and the capacity available for the Rebatable Service;
(b)	EAPL will keep all bids confidential;
(c)	EAPL will advise the ACCC of the outcome of the bidding process;
(d)	Bids will be evaluated against criteria specified by EAPL in the bidding process (such as NPV and benefit to other Users);
(e)	EAPL may reserve the right not to accept any bid; and
(f)	The Prospective User is not obliged after submitting a bid to enter into a Service Agreement if the MDQ offered is substantially less than the MDQ bid by the Prospective User.
11.3	Incentive Mechanism
(1)	A market-based incentive will apply to promote efficient growth of the Gas market while increasing the utilisation of the Pipeline.  The incentive mechanism will be implemented through the Rebatable Services.  All of the Rebatable Services have biddable tariff features.
(2)	The price path approach to setting Reference Tariffs provides EAPL with strong incentives to reduce costs and promote growth in Gas transmission volumes.  This incentive is intended to provide constructive market signals by encouraging Users to use transportation services, while affording fairness to participants.

11.4	Revenue from Rebatable Services
(1)	The revenue generated from the Rebatable Services, net of incremental capital and operating costs attributable to these services (including but not limited to compressor fuel and maintenance) will be distributed through a rebate process in the following proportions:
(a)	75% to Eligible Users;
(b)	15% to a depreciation reserve; and
(c)	10% to EAPL. 
(2)	The rebate will be calculated and distributed by EAPL shortly after the end of each financial year.
(3)	The amount of revenue which will be generated from the Rebatable Services is uncertain.
(4)	The Eligible Users’ share of the rebate from Class WFT and Class OFT Services will be distributed annually to each Eligible User proportionately, based on the charges (other than overrun charges, balancing charges and interest payable on overdue amounts) paid by each Eligible User as a percentage of the total charges incurred by all those Users over that year.
(5)	The Eligible Users’ share of the rebate from the Class IT Service will be distributed to each Eligible User each year in proportion based on each Eligible User’s unutilised annual Firm Service Capacity expressed as a percentage of the Total Unutilised Capacity for all Users.
12.	ORDER OF PRIORITY OF SERVICE
12.1	The following  existing Gas transportation contracts to which EAPL is a party will be accorded priority equivalent to Class FT Service:
(1)	the Gas Transportation Agreement with AGL Wholesale Gas Pty Limited dated 30 June 1994; and
(2)	contracts for Class FT Service, Class STP Service or similar Firm Service entered under EAPL’s previous Service Agreements and General Terms and Conditions.

The above levels of priority are subject to any established pre existing contractual rights to a higher priority (if any).
12.2	Contracts for Class IT-H Service, Class IT-L Service or similar interruptible services entered under EAPL’s previous Service Agreements and General Terms and Conditions are accorded a priority equivalent to Class IT Service.
12.3	
The levels of priority for all Services and classes of service provided by the Pipeline are subject to any established pre existing contractual rights to a higher priority of service (if any) and any Service provided to a User may be curtailed or interrupted by EAPL to give effect to any such pre existing rights.
12.4	Notwithstanding any other provision of this Access Arrangement, in accordance with clause 2.25 of the Code, this Access Arrangement does not deprive any person of a contractual right in existence prior to the date this Access Arrangement is submitted to the ACCC, other than any Exclusivity Right which may have arisen on or after 30 March 1995. 
13.	TERMS AND CONDITIONS 
13.1	EAPL will provide the Reference Services under a Service Agreement on terms and conditions consistent with the Principles (see Attachment 3).
13.2	The operational principles and procedures which will be applied by EAPL in regard to nominations and balancing will be consistent with the procedures described in Attachment 4.
14.	CAPACITY MANAGEMENT POLICY  
14.1	The Pipeline covered by this Access Arrangement is a Contract Carriage Pipeline.
14.2	Accordingly:
(1)	EAPL will manage its ability to provide Services primarily by requiring Users to use no more than the quantity of Service specified in that User’s Service Agreement with EAPL;
(2)	Users will be required to enter into a contract that specifies a quantity of Service in accordance with this Access Arrangement;
(3)	charges levied by EAPL for use of a Service are based on the quantity of Service specified in the relevant Service Agreement in accordance with this Access Arrangement; and
(4)	the User will be entitled to trade its right to another User but only in accordance with this Access Arrangement. 
15.	
TRADING POLICY 
15.1	Bare Transfer  
(1)	The Service Agreement will provide that, in accordance with clause 3.10 of the Code, a User may make a Bare Transfer if the transferee notifies EAPL beforehand that it wishes to utilise the portion of the Contracted Capacity subject to the Bare Transfer and of the nature of the Contracted Capacity subject to the Bare Transfer.
15.2	Conditional Transfer 
(1)	The Service Agreement will provide that the User may transfer or assign all or part of its Contracted Capacity other than by way of a Bare Transfer with the prior written consent of EAPL.  
(2)	The Service Agreement will also provide that EAPL may withhold its consent only on reasonable commercial or technical grounds and may make such consent subject to conditions if they are reasonable on commercial and technical grounds which are consistent with the Principles (see Attachment 3). 
15.3	Transfer of Receipt Points and Delivery Points
(1)	The Service Agreement will provide that upon request by a User in writing, EAPL may transfer all or part of a User’s MDQ for a Receipt Point or Delivery Point set out in the relevant Service Agreement to another designated and pre-existing Receipt Point or Delivery Point respectively. The Service Agreement will also provide that EAPL may only withhold its consent to such a transfer on reasonable commercial or technical grounds and may make its consent subject to conditions if they are reasonable on commercial and technical grounds which are consistent with the Principles (see Attachment 3).
(2)	The Service Agreement will provide that the provision for transfer of Delivery Points does not apply to Class STP Service as it is not commercially and technical reasonable to transfer Delivery Points for that class of Service.
16.	EXTENSIONS AND EXPANSIONS 
16.1	EAPL’s Capital Base includes all of the Pipeline as well as the following New Facilities Investments:
(1)	looping of a section of the Canberra lateral; and
(2)	the pipeline extension between Wagga Wagga and Culcairn (for the purposes of this Access Arrangement and the Code, the pipeline extension between Wagga Wagga and Culcairn, owned and operated by EAPL is treated as an extension to the Covered Pipeline and has been included in the Capital Base).
16.2	For the forecast Quantities to be carried in the Pipeline no other capital expenditures for additional Capacity are expected to be required.
16.3	In accordance with section 3.16 of the Code, EAPL will decide in the future, with the consent of the ACCC, whether any new extension or expansion, other than that included in section 16.1 above, will be part of the Covered Pipeline.
16.4	When provision of Services requires enhancement or expansion of facilities (including new Delivery or Receipt Points), a surcharge or extension of the term requested by the Prospective User may be required to provide sufficient revenue to support the capital and operating cost of the new facilities.  
16.5	The maximum term of any Service Agreement requiring enhanced Capacity will be twenty years.  The minimum term of any Service Agreement requiring enhanced Capacity will be one year.  For Reference Services, an evaluation will be made to the project to determine whether a surcharge may be required to provide the enhanced Services over the requested term of the Service Agreement at the Reference Tariff.  The User and EAPL may negotiate a longer term up to 20 years to reduce or eliminate the surcharge for the enhanced services.
16.6	The evaluation  will be based on the NPV of revenue and costs. Where the NPV of the revenue for the proposed project at the Reference Tariff over the term is less than the NPV of the capital and operating costs of the new facilities plus a contribution for the use of existing facilities, a surcharge will be applied.  The surcharge will be determined by adding amounts to one or more components of the Reference Tariff to achieve equalisation of the NPVs.  
16.7	An amount in respect of the balance after deducting the Recoverable Portion of the New Facilities Investment may subsequently be added to the Capital Base if at any time the type and volume of services provided using the increase in Capacity attributable to the New Facility change such that any part of the Speculative Investment Fund would then satisfy the requirements of the Code for inclusion in the Capital Base.
17.	REVISIONS
17.1	A revised Access Arrangement will be submitted to the ACCC for approval on or before 1 January 2005 (“the Revisions Submission Date”).
17.2	The revisions to this Access Arrangement will commence on the later of:
(1)	the date being 6 months after the Revisions Submission Date; and
(2)	the date on which the approval by the ACCC of the revisions to the Access Arrangement takes effect under the Code (“the Revisions Commencement Date”).

ATTACHMENT 1

DEFINITIONS AND INTERPRETATION

Terms and expressions which are used in this Access Arrangement, have the meaning given to those terms in the Code unless otherwise defined below.  

“ACCC” means the Australian Competition and Consumer Commission;

“Backhaul” means the circumstance where the flow of Gas under a User’s Service Agreement is in the opposite direction to the predominant flow of Gas in the relevant segment of the Pipeline;

“Delivery Point” means the point of exit from the Pipeline at which Gas is delivered from the Pipeline to or for the account of a User;

“EAPL” means the owner from time to time of the Pipeline which at the date of this Access Arrangement is East Australian Pipeline Limited (ACN 064 629 009);

“Eligible User” means a User being provided with Firm Service but excluding any Negotiable Service or Rebatable Service;

“Enhanced Capacity” means additional Capacity that is required to satisfy the needs of a Prospective User where EAPL determines that Capacity is not available and new or modified or upgraded facilities are necessary;  

“Enhanced Facilities Agreement” means an agreement between EAPL and a User in relation to the construction of additional, modified or enhanced facilities to provide Services;

“Firm Service” means transportation service with priority over other classes of Service which will not be interrupted or curtailed except as provided under the conditions of the User’s Service Agreement or when any pre-existing contractual rights to a higher priority of service are invoked;

“Gas” means any natural gas which enters into the Pipeline at a Receipt Point subject to certain conditions set out in the Service Agreement;

“GJ” means one Gigajoule or one thousand million Joules;

“GST” means any goods or services tax, consumption tax, value added tax, use tax or any similar tax, import or duty;

“MDQ” means the daily maximum quantity of Gas as set out in the Service Agreement;

“MHQ” means the hourly maximum quantity of Gas as set out in the Service Agreement;

“NPV” means net present value

“Pipeline” means the pipeline as described in clause 3 and any expansion or extension which forms part of the Pipeline as set out in clause 16;

“PJ” means one peta joule or one thousand tera joules;

“Quantity” or “Quantity of Gas” means a quantity of Gas, expressed in joules or multiples thereof, and calculated as the product of the heating value and the volume of that Gas;

“Rebatable Services” means the following classes of service:

(a)	Class WFT Service;

(b)	Class OFT Service; and

(c)	Class IT Service.

“Receipt Point” means the point of entry for Gas to enter into the Pipeline;

“Reference Service” means a reference service described in Clauses 9.1 and 9.2;

“Reference Tariff” means the Reference Tariff for a Reference Service as described in Section 9;

“Service” means Class FT Service, Class STP Service, Negotiable Service, Class WFT,  Class OFT Service,  Class IT Service and any other Gas transportation service;

“Service Agreement” means an agreement (including schedules) between EAPL and a User in relation to the transportation services to be provided by EAPL from time to time;

“Term Sheet” means EAPL’s standard term sheet for a particular class of Service as published by EAPL from time to time setting out a summary of key proposed contractual terms and conditions;

“TJ” means one Tera Joule or one million million Joules;

“Total Unutilised Capacity” means the MDQ of all Eligible Users multiplied by 365 less total annual throughput for those Eligible Users.

ATTACHMENT 2

TARIFFS, CHARGES AND DISTANCES FOR REFERENCE SERVICES

1.	CLASS FT SERVICE
1.1	Class FT Service Mainline Tariff Components for Financial Year Commencing 1 July 2000:

Table A2.1

Tariff Components	Tariff	
Capacity Charge
($/TJ/d/Km/month)	
$15.26	
Throughput Charge
 ($/TJ/Km)	
$0.0434	

1.2	Formula to Index Mainline Capacity and Throughput Tariffs for Financial Years Commencing on and after 1 July 2001.

In each financial year beginning on and after 1 July 2001 the mainline capacity and throughput reference tariffs will be determined by the following formula:

MRTt	=	MRT t-1 *(CPIA t - X)

Where:

MRTt	=	Mainline Capacity or Throughput Reference Tariff component for the Year t.  Year t is the financial year commencing 1 July under consideration eg: 2001.

MRTt–1	=	Mainline Capacity or Throughput Reference tariff in year t – 1.

CPIAt	=	CPI t/CPI t-1.

CPIt	=	Consumer Price Index (All groups, Average of eight capital cities) for the March quarter preceding by 3 months the start of Financial Year t.

CPIt-1	=	Consumer Price Index (All groups, Average of eight capital cities) for the March quarter preceding by 15 months the start of Financial Year t.

X	=	0.0125 (a tariff smoothing factor).

If the Australian Bureau of Statistics suspends or ceases publication of, or materially alters the Consumer Price Index, then an alternative index reflecting consumer price changes in Australian Capital Cities will be substituted by EAPL.
1.3	Class FT Service Lateral Tariff Components for Financial Year
Commencing 1 July 2000:
Table A2.2

Tariff Components	Tariff	
Capacity Charge
($/TJ/d/Km/month)	
$38.17	
Throughput Charge
($/TJ/Km)	
$0.210	

1.4	Base Values and Indexation Factor to Develop Lateral Tariff Components for Financial Years Commencing on and after 1 July 2001.
The lateral reference tariff components commencing on and after 1 July 2001 will be determined by multiplying the base value by an indexation factor for each year as shown in Table A2.3.
Table A2.3
Base Values in 2001 $ and Indexation Factor
for Class FT Lateral Tariff Components
Financial Year Commencing 1 July	2001	2002	2003	2004	
Capacity Charge
($/TJ/d/Km/month)	$61.04 x CPIBt	$83.90 x CPIBt	$106.76 x CPIBt	$129.63 x CPIBt	
Throughput Charge
($/TJ/Km)	$0.336 x CPIBt	$0.462 x CPIBt	$0.588 x CPIBt	$0.714 x CPIBt	
CPIBt is the indexation factor to convert from July 2000 $ to current dollars of the year under consideration.
Where:
CPIBt	=	CPIt/CPI2000.
CPIt	=	Consumer Price Index (All groups, Average of eight capital cities) for the March quarter preceding by 3 months the start of Financial Year t.
CPI 2000	=	Consumer Price Index (All groups, Average of eight capital cities) for the March 2000 quarter.

2.	CLASS STP SERVICE
2.1	Class STP Service Mainline and Lateral Capacity Reference Tariffs

Both the STP Mainline and Lateral Capacity Reference Tariffs will be linked directly to the Class FT Service Mainline and Lateral Capacity Reference Tariffs by the following formula:

STPCRTt	= 	A x 1.25 x B
		200 x 30.4375

Where:

STPCRTt	=	Class STP mainline or lateral Capacity Reference Tariffs for the year t.  Year t is the financial year commencing 1 July that is under consideration.  This tariff will be expressed in $/TJ/Km.

A	=	The mainline or lateral capacity reference tariff for Class FT Service for the year t.

1.25	=	Factor to convert the Class FT Service tariff from 100% to 80% load factor.

B	=	Annual Quantity of gas delivered to the User in TJ.

200	=	The annual Quantity delivery limit in TJ.

30.4375	=	Average number of days in a month within a year with 365.25 days.

2.2	Class STP Mainline and Lateral Throughput Reference Tariffs

The Class STP Service Mainline and Lateral Throughput Reference Tariffs will be equal to the Class FT Mainline and Lateral Throughput Reference Tariffs, respectively, in the relevant Year as indexed.  For the financial year commencing 1 July 2000,this Tariff will be $0.0434/TJ/Km.  Indexing will be performed as described in Section 1.2 of this Attachment for Class FT Service.

2.3	Summary of Class STP Service Tariffs

Table A2.4

Tariff Components	Mainline	Lateral	
Capacity Tariffs
($/TJ/d/Km/month)	Linked by formula in Section 2.1 to Class FT Service mainline capacity tariff and indexed annually.	Linked by formula in Section 2.1 to Class FT Service lateral capacity tariff and indexed annually.	
Throughput Tariffs
($/TJ/Km)	Equal to Class FT Service tariff for mainline.  For year starting 1 July 2000 the tariff will be:
$0.0434/TJ/Km	Equal to Class FT Service tariff for lateral throughput tariff.  For year starting 1 July 2000 the tariff will be:
$0.210/TJ/Km.	

3.	PIPELINE DISTANCES FOR DETERMINING CHARGES FOR TRANSPORTATION SERVICES

When determining the capacity and throughput charges, the pipeline distance in kilometres from Receipt Point to Delivery Point and separated into Mainline and Laterals is used.

Typical pipeline distances for the current pipeline system are set out in Table A2.5 below.

Table A2.5

TRANSPORTATION DISTANCES, MAINLINE AND LATERALS (KMS)

MAINLINE	LATERAL	
Delivery/Lateral Offtake Points	Distance from Moomba	Distance from Culcairn	Lateral Delivery Point	Distance from Mainline Offtake	
Mainline Delivery Point

Marsden/West Wyalong
Yass/Blakney Creek
Goulburn
Marulan
Sally’s Corner
Moss Vale
Bowral
Bargo
Wilton

Young (township)
Cootamundra
Wagga Wagga
Culcairn (Interconnection)

Lateral Offtake Points

Burnt Creek-Griffith Lateral
Young-Oberon-Lithgow Lateral
Dalton-Canberra Lateral

	

942
1114
1185
1207
1231
1246
1256
1284
1299

1046
1090
1164
1252

1138
1033
1131	

310
300
370
393
417
432
442
470
485

206
167
88
-

114
219
317	Burnt Creek-Griffith Lateral

Junee
Coolamon
Ganmain
Narranderra
Rockdale
Leeton
Griffith

Young-Oberon-Lithgow Lateral

Cowra
Blayney
Millthorpe
Orange
Bathurst
Wallerawang
Lithgow
Oberon

Dalton-Canberra Lateral

Canberra	

6
40
56
104
116
125
179

58
125
121
138
161
204
212
201

58	

The Minline distance is measured between the Receipt Point and the Delivery Point or Lateral Offtake Point on the Mainline.

The Lateral distance is measured between the Lateral Offtake Point on the Mainline and the Delivery Point on the Lateral.

Capacity and Throughput charges on Laterals will be based on Lateral Reference Tariffs for the first 100 kilometres.  Any Lateral distance in excess of 100 kilometres will be based on the Mainline Capacity and Throughput Reference Tariffs for the applicable service.

4.	OVERRUN CHARGES

4.1	Overrun charges apply to all classes of Service except Class STP Service.
4.2		Quantities of Gas withdrawn by the User from a Delivery Point in a Day in excess of the User’s MDQ are Overruns, and may either be authorised by EAPL prior to the event or occur as unauthorised Overruns if not authorised by EAPL.  A different charge applies to authorised and unauthorised overruns.
4.3	The charges to apply to Overrun Quantities are set out in Table A2.6  The throughput will be charged once only at the Throughput Tariff for Class FT Service for the overrun quantity.  The charge for the Capacity component will apply for the aggregate Authorised Overrun Quantity and aggregate Unauthorised Overrun Quantity in that month at the charge for each type of Overrun set out in Table A2.6.
4.4		The charges will be applied on a Distance basis as if the Gas had been transported by EAPL from the furthermost Receipt Point on the Pipeline to the Delivery Point.

Table A2.6

Overrun Charges for all Services (Except Class STP)

	Authorised Overrun	Unauthorised Overrun	
Capacity Charge	200% of the Equivalent1 Capacity Reference Tariffs for Class FT Service	350% of the Equivalent1 Capacity Reference Tariffs for Class FT Service	
Throughput Charge	Class FT Service Throughput Reference Tariffs	Class FT Service Throughput Reference Tariffs	

Note 1:	Equivalent Capacity Reference Tariffs for Class FT Service will be the relevant tariffs presented in Table A2.1, Section 1.2, Table A2.2 or Table A2.3 of this Attachment 2 and divided by 30.4375 to convert to a daily tariff basis which will be expressed in $/TJ/Km.

5.	ODORISATION

EAPL reserves the right to impose a reasonable charge for odorisation of the User’s Gas.  The charge is expected to be less than $0.01/GJ of Gas delivered to the User.

6.	BALANCING CHARGES

If the User, after notice from EAPL to overcome an imbalance, does not rectify the imbalance, and EAPL is unable to cease receipt from or delivery to the User to overcome the imbalance, then EAPL may impose balancing charges on the User as follows:

(i)	150% of the cost of the Quantity required to restore the Customer to zero User Inventory at the price that EAPL purchases Gas from any person to rectify the imbalance; PLUS
(ii)	a service fee for costs incurred by EAPL charged at the rate of $2,000 per occurrence in each Month.

	Such balancing charges net of EAPL’s expenses (including Gas purchase) will be reimbursed to Eligible Users (except for the User, who incurred the imbalance) shortly after the end of each financial year, under an allocation process generally pro rata to each User’s MDQ.

ATTACHMENT 3

PRINCIPLES FOR

TERMS AND CONDITIONS OF SERVICES

1.	INTERPRETATION

1.1	Terms and expressions used in this Attachment describing the principles applicable to EAPL’s conditions of Service have the meanings set out in clause 35 of this Attachment.

2.	TRANSPORT OBLIGATIONS

2.1	EAPL will be obliged to:
(1)	transport through the Pipeline the Quantity of Gas received from the User made available at the Receipt Point, as long as such Quantity of Gas does not exceed the MDQ;  and
(2)	deliver, at the Delivery Point, to the User that Quantity of Gas (not exceeding the MDQ),

subject to any interruptions or curtailments, priority provisions, adjustments and the balancing provisions of clause 12.
2.2	The User will not be entitled to take a Quantity of Gas in any hour of a day exceeding the MHQ specified in a Schedule to the Service Agreement.
2.3	Class IT Service will at all times be subject to capacity in the Pipeline not being required for any other class of Service and interruption or curtailment by EAPL at any time or by the User on short notice.

3.	QUANTITY NOMINATIONS

3.1	Except for Class STP Service, the User must nominate the Quantity of Gas to be received into the Pipeline and delivered at each Delivery Point under the relevant Service Agreement, with such nominations to be given to EAPL at daily or other intervals as EAPL advises.  Any nomination of a Quantity of Gas for a day to be delivered in excess of the MDQ will be subject to the conditions for overrun Gas, the principles for which are at clause 5.  EAPL may introduce binding procedures for Nominations which EAPL may amend from time to time by notice to Users.
3.2	
For Class STP Service, the User will be entitled to provide a nomination of the Quantity to be delivered each day for a period not exceeding one month, or in the absence of such nomination, EAPL will determine the delivery Quantity for each day from the estimated annual Quantity in the Service Agreement.

4.	RECEIPT POINTS AND DELIVERY POINTS

4.1	Unless EAPL agrees otherwise, all Receipt Point and Delivery Point equipment will be owned and operated by EAPL.
4.2	Any Receipt Points owned and operated by the User are to be made available for use by EAPL at no cost and to other Users of the Pipeline under reasonable terms and conditions.
4.3	Users may change existing Receipt or Delivery Points if commercially and technically reasonable in the circumstances (including meeting reasonable criteria set out in the agreement for Services).
5.	OVERRUNS

5.1	The principles concerning “authorised” and “unauthorised" overruns are as set out in this clause.
5.2	If EAPL, in accordance with its nomination procedures, agrees to deliver a Quantity of Gas in excess of the User’s MDQ, then that Quantity in excess of the MDQ will be an authorised overrun for which the User will pay an authorised overrun charge.
5.3	If the User exceeds its MDQ or the Quantity of Gas accepted by EAPL as an authorised overrun is exceeded, then the excess Quantity of Gas will be treated as an unauthorised overrun for which the User will be required to pay an “unauthorised overrun charge” (subject to special conditions noted in paragraph  5.5 in relation to interconnecting pipelines without flow or pressure control devices).
5.4	If because of a User’s unauthorised overrun EAPL is unable to comply with obligations to transport Gas for other Users, then the User will be liable for any loss, cost or damage EAPL may incur, including consequential loss.
5.5	EAPL may make particular provision for treatment of overruns at interconnections with other pipelines in circumstances where neither EAPL nor the User is able to control the flow or pressure of the Gas from the Pipeline at or near that point of interconnection.

6.	
SHARING ARRANGEMENTS

6.1	Where the User is sharing a Receipt Point or Delivery Point with another User, the User will need to have agreements or arrangements in place with all other sharing Users in relation to quantities and the communication of quantities of Gas for each sharing User to EAPL or to have made appropriate arrangements with the sharing Users to provide EAPL with nominations of the Quantity for the User at that common facility.
6.2	Unless the circumstances in paragraph 6.5 apply, the sharing Users will also need to  agree on and appoint a person (other than EAPL) as the shared facility appointee for a shared Receipt Point or Delivery Point.
6.3	It will be the responsibility of the shared facility appointee, among other things, to make arrangements with sharing Users in relation to nominations and verifications of daily risk quantities, daily transmission of quantities of Gas received or delivered, notification of Users upon receipt of a Quantity of non-specification Gas and other responsibilities as described in EAPL’s nomination and balancing procedures.
6.4	EAPL may  establish procedures for the operation of the shared facility after consultation with the sharing Users with which the User must comply.
6.5	EAPL may also pre-appoint a shared facility appointee and set out its functions with which the User must comply.

7.	GAS QUALITY

7.1	The User will be responsible to ensure that Gas at the Receipt Point meets the Receipt Gas Specifications (as set out the Access Arrangement).
7.2	EAPL will be responsible to ensure that Gas delivered to the Delivery Point meets the Delivery Gas Specification (subject to any changes arising from odorisation or compression or short periods of receipt into the Pipeline of non specification Gas prior to either party becoming aware of the event).
7.3	EAPL may vary the Receipt Gas Specification or Delivery Gas Specification if it is required by law to do so or a common gas specification for New South Wales, the Australian Capital Territory and Victoria is adopted.
7.4	EAPL is not obliged to accept Gas which does not comply with the Receipt Gas Specification and may immediately direct the User to restrict or terminate receipt of such Gas (without EAPL incurring any liability whatsoever).
7.5	If EAPL accepts a Receipt Gas Specification that is different from the Delivery Gas Specification it may require the User to restrict or terminate the Quantity of Gas received into the Pipeline to ensure that the Quantity of Gas delivered to all Users meets the Delivery Gas Specifications (without EAPL being liable to the User).
7.6	Each party will be obligated to notify the other as soon as it becomes aware of Gas received at the Receipt Point failing to meet the Receipt Gas Specification.
7.7	The User will be required to  indemnify EAPL for any loss arising from any non specification Gas made available by the User at the Receipt Point (including direct, indirect and consequential loss).  The User will also be required to continue to pay all charges under the agreement for Services.
8.	COMMINGLING, CUSTODY, CONTROL AND TITLE
8.1	EAPL will have the right to commingle and odorise the Gas in the Pipeline (and may impose a reasonable charge for the odorisation service).
8.2	Custody and control of Gas provided by the User will pass from the User to EAPL at the Transfer Point at the Receipt Point.  Custody and control of the Gas delivered by EAPL to the User will pass from EAPL to the User at the Transfer Point at the Delivery Point.
8.3	Title to the Gas will remain with the User, unless special arrangements are made in the agreement for Service.
9.	MEASUREMENT OF GAS
9.1	EAPL will supply, install, own, operate and maintain measuring equipment at or near each Receipt Point and Delivery Point (subject to EAPL’s right to waive the requirement).
9.2	EAPL will at regular intervals calibrate EAPL’s measuring equipment.  A representative of the User may be present at the calibration.
9.3	The User may, at reasonable times, by giving reasonable notice to EAPL, inspect the measuring equipment and records at any Receipt Point or Delivery Point and request EAPL to conduct a calibration at the Receipt Point or Delivery Point.  The cost of calibration will be borne by the User if the measuring equipment is found to be accurate within the billing correction limits set out in EAPL’s calibration procedures.
9.4	EAPL will maintain measurement procedures setting out the calibration and accuracy verification procedures and other calibration procedures which will be in accordance with good pipeline industry practice.
9.5	The User will, at its own cost, provide pulsation dampening equipment as may be necessary upstream of any Receipt Point to ensure the facilities upstream do not cause interference with the accuracy of the measuring equipment due to non uniform flow in the Pipeline. The equipment will meet specifications reasonably required by EAPL.
10.	
GAS PRESSURES AND TEMPERATURES
10.1	For pressure controlled conditions at a Receipt Point, the pressure of Gas made available by the User to EAPL at the Receipt Point must meet the minimum receipt pressure and not exceed the maximum receipt pressure. The User must keep fluctuations in pressure within limits defined by EAPL. EAPL’s obligation to deliver the MDQ to the User will only be valid if the minimum receipt pressure and the pressure fluctuation conditions are satisfied. 
10.2	For non pressure controlled conditions at a Receipt Point, the User will use all reasonable endeavours to ensure Gas made available at the Receipt Point meets the minimum receipt pressure and does not exceed the maximum receipt pressure (EAPL’s obligation to deliver the MDQ is only valid if the minimum receipt pressure is satisfied).
10.3	The User must, at its cost, provide suitable pressure relief devices or limiting devices to protect the Pipeline to ensure that the pressure of Gas made available by the User at the Receipt Point does not exceed 105% of the maximum receipt pressure at any time. The equipment will meet specifications reasonably required by EAPL.
10.4	EAPL may reduce or terminate receipt of Gas at the Receipt Point if the pressure exceeds the maximum receipt pressure to the extent EAPL considers the safety or integrity of the Pipeline may be jeopardised or damaged.
10.5	EAPL must deliver Gas at the Delivery Point in excess of the minimum delivery pressure but not exceeding the maximum delivery pressure as set out in the agreement for Service.
10.6	If the User exceeds the MHQ in any hour, EAPL will not be obliged to meet the minimum delivery pressure requirement for the subsequent period of 24 hours.
10.7	The User will be required to use all reasonable endeavours to make the Gas available to EAPL at the Receipt Point at a daily average temperature not greater than 10oC above the mean ambient temperature on that day and ensure the Gas is a minimum temperature of 2oC and a maximum temperature not exceeding the maximum receipt temperature.  EAPL will be entitled to terminate the receipt of Gas into the Pipeline if the temperature limit is transgressed for a period of time which in EAPL’s opinion may affect the safety, operation or integrity of the Pipeline.
11.	GAS FOR PIPELINE OPERATION
11.1	EAPL may, subject to reasonable notice, for the purpose of operating the Pipeline:
(1)	take Gas it requires from all Users;  or
(2)	arrange with any User or any other person to take and pay for the Quantity of Gas it requires.
11.2	If EAPL takes Gas from all Users the MDQ at the Receipt Point for each User’s agreement for Service is to be adjusted as appropriate, and EAPL will adjust the tariffs and charges accordingly.
12.	PIPELINE OPERATION
12.1	EAPL will establish and manage a User Inventory account for each User to account for the difference between the Quantity of Gas received by EAPL from, and the Quantity delivered by EAPL to the User over a period of time, adjusted as appropriate for operational conditions.  The User must ensure that the User Inventory is at all times within the specified tolerance limits for balance over a period as reasonably determined by EAPL, and reduce the User Inventory to zero whenever practicable.
12.2	If the User Inventory falls outside the tolerance limit, EAPL may request the User to rectify the imbalance, within a reasonable time period.  If it is not rectified within the advised time period, EAPL may suspend or cease part of the Services until the User Inventory is restored within the tolerance limit as determined by EAPL and, without limiting any other rights, apply applicable charges for imbalances if the User fails to comply with the balancing provisions to EAPL’s reasonable satisfaction.
12.3	The charge for imbalances will be calculated in accordance with Attachment 2.
12.4	EAPL will have the right to establish and implement procedures for balancing and allocation of receipts and deliveries by the User individually and for all Users collectively, and to enter into arrangements with interconnecting pipeline operators and Gas suppliers for the purpose of nominations, balancing and allocations.
13.	TARIFFS AND CHARGES
13.1	EAPL  will invoice the User by the seventh day of each month and the User will be required to pay the invoice within fourteen days of receipt.
13.2	If the User disputes an invoice, then unless there is a manifest error the User must pay the invoice in full and the parties must seek to resolve the amount in dispute by discussion firstly and then use the dispute resolution process set out in the agreement for Service.
13.3	If either party fails, without lawful excuse, to pay any amount due under the agreement for Services, the party will be required to pay interest on the overdue amount, calculated on a daily basis at the bank bill rate (as defined in the agreement for Service) plus 2% per annum from the due date until actual payment.
13.4	Information used by EAPL for the provision of invoicing may be actual or estimated and if estimated will be subsequently adjusted.
14.	
REPRESENTATIONS AND WARRANTY
14.1	Both EAPL and the User will give representations and warranties on each day of the term of the agreement, set out in the agreement for Services, including authority of the parties to contract, User’s title to Gas, licences, legal enforceability, and solvency of the parties.
15.	RECORDS AND EXCHANGE OF INFORMATION
15.1	The User must furnish EAPL with estimated daily, monthly and annual quantities of Gas as EAPL may reasonably require with respect to any service provided under the agreement for Service.  The User must also advise EAPL, upon request, of the estimated annual Quantity of Gas by year and month for future years.
15.2	Each party will be required to maintain all books and records relating to any obligation under the agreement for Services relating to the supply of information to the other party  for a period of seven years.
16.	INTERRUPTIONS AND CURTAILMENTS
16.1	EAPL will be required to conduct all routine and scheduled inspections, repairs and maintenance on the Pipeline so as to minimise the possibility and need for any interruption or reduction of the Services.
16.2	EAPL will be entitled to interrupt or reduce the Services to conduct any inspections, repairs, testing and maintenance and any other work related to the Pipeline which is reasonably required provided that:
(1)	EAPL notifies the User as early as reasonably practicable;
(2)	EAPL makes reasonable endeavours to agree with the User as to the timing of the intended interruption or reduction; and
(3)	EAPL makes reasonable endeavours to minimise the period and the extent to which the Services are interrupted or reduced.
16.3	In relation to planned maintenance, EAPL will be required to take reasonable steps to not interrupt or curtail the transportation of Gas in any year for a continuous period in excess of twenty-four hours or for more than an aggregate of two days per year without the User’s prior approval.
16.4	EAPL will be entitled, without prior notice, to interrupt or reduce Services in cases of emergency or where planned maintenance causes an interruption or reduction due to unforeseen circumstances or where there is a risk of injury or damage to any person, property or the Pipeline for such a period as EAPL reasonably believes it is necessary.  EAPL will be required, as soon as reasonably practicable, to inform the User of the circumstances giving rise to such an unplanned interruption or reduction, and the anticipated duration.  EAPL will provide such Services as it is able to in the circumstances, subject to the order of priority for the various classes of Services.
16.5	EAPL will not be liable to compensate the User for any loss, injury or damage arising directly or indirectly as a result of an interruption or curtailment of the Services arising from a planned or unplanned interruption.
17.	PRIORITY

17.1	Subject to any pre-existing contractual right to a higher priority, if there is any interruption or reduction of Services or inability to meet transport obligations or Force Majeure affecting the Services, then to the extent practicable, EAPL will provide Services in the following decreasing priority levels of class of Service:

(1)	Class FT Service, Class STP Service, Class WFT Service, Class OFT Service and similar classes of Firm Service under pre-existing contracts or negotiated contracts; and

(2)	Class IT Service or similar classes of interruptible service under pre-existing contracts.

17.2	EAPL may grant a higher priority level to Users with Firm Services agreements which include a backhaul segment if, in EAPL’s opinion, the granting of the higher priority benefits other Users.

17.3	Subject to any pre-existing contractual right to a higher priority, when an interruption occurs and the levels of priority are invoked, then to the extent practicable:-
(1)	Services being provided to all Users which are affected by that interruption among Firm Services (noted in section 17.1(1)), will be interrupted or reduced proportionally in the same ratio that the MDQ specified in the Schedule to each agreement for Services bears to the aggregate of the MDQ for the Services affected;
(2)	Services being provided to all Users which are affected by that interruption under Class IT Service will be discontinued sequentially commencing with Users who have the lowest priority in that class, or if one or more Users have equal priority, then the Services will be interrupted or reduced proportionately in the same ratio as the confirmed nomination from the User bears to the aggregate of all confirmed nominations for Class IT Service; and
(3)	Negotiable Services will be interrupted and granted priority as set out in the User’s agreement for Services.
18.	FORCE MAJEURE
18.1	EAPL will be relieved of its obligations under the agreement for Services during the continuance of and to the extent that it is prevented from complying with them because of  Force Majeure.
18.2	
In the event of a Force Majeure EAPL will:
(1)	as soon as reasonably practicable (but in any case within 24 hours of the occurrence of the Force Majeure) give written notice to the User of the circumstances of the Force Majeure;
(2)	endeavour to remedy the Force Majeure as soon as reasonably practicable; and
(3)	give notice to the User upon termination of the Force Majeure.
18.3	In the circumstances of a prolonged Force Majeure (which shall not be less than a 12 month period) either party will be entitled to terminate the agreement for Services subject to the prolonged Force Majeure not being resolved by negotiation.
19.	CAPACITY CHARGE RELIEF

19.1	In the event of an interruption or curtailment of Services as a result of a Force Majeure claimed by EAPL the User will be relieved from liability to pay the Class FT Service and Class STP Service capacity charge, but no other charge.

19.2	The capacity charge relief will be prorata to the reduction in the User’s MDQ, and will be for the period commencing on the expiry of 24 hours from the occurrence of the Force Majeure and terminating at a time when EAPL, in its reasonable opinion, is able to provide Services under the agreement for Services.

20.	TERMINATION

20.1	If the User suffers an “insolvency event” (as defined in the agreement for Services), defaults in the performance of a material obligation (or if the default is capable of remedy, fails to remedy the default within twenty-one days), or defaults in the payment of any money for a period of seven days then EAPL will be entitled, at its discretion, to suspend the Services or terminate the agreement for Services, or both.

20.2	Termination of the agreement for Services will not relieve the User of its obligations to pay money outstanding at that time (including the full amount of any surcharge or amounts under an enhanced facilities agreement whether or not yet due).  The costs reasonably incurred by EAPL in remedying a default may be treated as a liquidated debt payable by the User.

20.3	If EAPL suffers an insolvency event, defaults in the performance of a material obligation (or if the default is capable of remedy, fails to remedy the default within twenty-one days ), the User may terminate the agreement for Services.

20.4	If EAPL is entitled to and does terminate an agreement for Firm Service, then without detracting from any other rights, EAPL will be entitled to the aggregate of the capacity charge (at the then current Capacity Tariff) payable by the User for the balance of the Term and the total surcharge payment payable by the User for the balance of the term (both discounted annually at the bank bill rate plus 2%).

21.	ASSIGNMENT

21.1	EAPL will be entitled to assign its rights or obligations under the agreement for Services without the prior written consent of the User to any person who holds an interest in the Pipeline or to a Related Body Corporate within the meaning of the Corporations Law.  In any other circumstance EAPL will not be entitled to assign its obligations under the agreement for Services without the prior consent of the User (with such consent not to be unreasonably withheld).

21.2	The User will not be entitled to assign its rights or obligations under the agreement for Services without the prior written consent of EAPL (with such consent not to be unreasonably withheld), and provided the assignee meets the same solvency and prudential conditions as applied to the assignor when it entered the agreement for Services.

22.	DISPUTE RESOLUTION 

22.1	Except in the case of a dispute between the Parties concerning the renewal, termination, or assignment of the agreement for Service, or payment by the User of any invoiced amount due  under the agreement, a Party will not be entitled to start arbitration or court proceedings in respect of a dispute arising out of the agreement for Service unless it has complied with a dispute resolution process set out in the agreement for Service which will involve negotiation and then mediation or expert determination.

22.2	 All disputes of an operational or technical nature will be referred to an expert who is given 20 days to determine the dispute. 
 
22.3	Unless otherwise agreed before the reference to the expert, the findings of the expert will be final and binding on the Parties.  A mediator may not make a decision that is binding on a Party unless that Party has so agreed in writing.

23.	CONFIDENTIALITY OF INFORMATION

23.1	Unless required by law or in regard to any information which is publically available, neither Party (including employees, sub-contractors and agents) will be entitled to disclose to any person any of the other Party’s confidential information without the prior written approval of the other Party which approval may impose such terms and conditions as that Party thinks fit.

23.2	If a Party is or may be required by law to disclose confidential information, the Party must immediately notify the other Party of the requirement and endeavour to delay and withhold disclosure (without breach of applicable law) to give the other Party a reasonable opportunity to oppose disclosure by lawful means.

24.	LIABILITIES AND INDEMNITIES

24.1	Each party will be required to indemnify the other for any loss arising out of its negligence.

24.2	However any liability of either party will be limited to direct loss only and does not extend to any consequential loss, claims brought by third parties, consequential damages or loss of business or other income (except as otherwise set out in the agreement for Services, including in relation to receipt of non-specification Gas by the User into the Pipeline, the User exceeding its MDQ or authorised overruns and any liability of EAPL arising due to the User’s imbalances).

25.	INSURANCE

25.1	Each party will be obligated to effect and maintain certain levels of workers compensation and public and product liability insurance for the term of the agreement for Services.  The User will additionally be required to carry all risk property damage insurance to a specified reasonable amount.

26.	AMENDMENT

26.1	EAPL will be entitled to  amend  operational clauses of the agreement for Services unilaterally (subject to the changes not having a material adverse affect on the User).

26.2	Other amendments proposed by EAPL will be notified to all Users, and if a User objects within a specified time period, and the matter cannot be resolved, then the matter will be referred to an expert under the dispute resolution provisions in the agreement for Services.  If the expert determines that a “material adverse change” to the User would occur then the amendment will not proceed (subject to the right of EAPL to withdraw any or part of the proposed amendment).

27.	TRANSFER OF MDQ

27.1	In accordance with and as defined in the Code, the User may initiate a “Bare Transfer” of MDQ without EAPL’s consent.  However, the transferee must notify EAPL prior to  it utilising the portion of the Contracted Capacity subject to the Bare Transfer and of the nature of the Contracted Capacity the subject of the Bare Transfer.
27.2	Any transfer of MDQ other than a Bare Transfer to an Incoming User may be effected by the User with EAPL’s consent which may not be unreasonably withheld, subject to the satisfaction of criteria set by EAPL based on reasonable commercial and technical grounds, including:
(1)	the User agrees on its own or with the Intending User to pay a reasonable charge determined and levied by EAPL for the cost of transfer of the MDQ whether or not the transfer proceeds to completion;
(2)	EAPL and the Intending User execute a service agreement in relation to the transferred portion of the  User’s MDQ in a form similar to the Service Agreement between EAPL and the User;
(3)	the MDQ specified in the Service Agreement with the Intending User is either for the transportation of Gas from the same Receipt Point to the same Delivery Point specified in this Service Agreement, or where transportation of Gas from an alternative Receipt Point is proposed, the Intending User meets requirements similar to those set out in clause 28 below;
(4)	the Intending User arranges and agrees with any User under a transportation agreement with EAPL currently using the Receipt Point (where applicable) and Delivery Point in the Service Agreement for sharing of the use of facilities and any conditions and charges, at no additional cost to EAPL;
(5)	the User and the Intending User agree on payment of any Surcharge for the Service under the Service Agreement to the reasonable satisfaction of EAPL such that EAPL continues to be paid the full amount of that surcharge for the term of the Service Agreement or EAPL is paid an amount determined by EAPL equivalent to the current value of that surcharge taken over the term of the Service Agreement;
(6)	in EAPL’s reasonable opinion the Intending User satisfactorily demonstrates in writing that it has made all necessary arrangements with producers of Gas for the Intending User, purchasers of Gas from the Intending User and any other party relating to such Service, including all gas purchase, gas sale, operating and multi party Receipt Point and Delivery Point arrangements;
(7)	if the transfer of part of the MDQ is proposed before any enhanced facilities are completed under an Enhanced Facilities Agreement which is related to the Service Agreement, then the obligations under that Enhanced Facilities Agreement are accepted by the User and the Intending User jointly and severally, and if the transfer of all the MDQ is proposed, the Intending User accepts all obligations under the Enhanced Facilities Agreement except for any accrued obligations remaining with the User after its release from that agreement;
(8)	if the transfer of part or all of the MDQ to the Intending User requires additional facilities at the Receipt Point or Delivery Point the User or the Intending User (or both) agree to pay EAPL for the cost of construction on such terms and conditions as reasonably determined and levied by EAPL;

(9)	the User is not in default under the existing Service Agreement;
(10)	the Intending User provides a parent company guarantee where required by and in a form satisfactory to EAPL; 
(11)	the Intending User pays or gives to EAPL a letter of credit or bank guarantee where required by and of an amount reasonably determined by EAPL; and
(12)	EAPL is satisfied that the Intending User is a responsible and solvent person with an appropriate level of experience within the industry.

28.	TRANSFER OF RECEIPT OR DELIVERY POINTS

28.1	Upon request by a User in writing, EAPL may transfer all or part of a User’s MDQ for a Receipt Point or Delivery Point set out in the relevant Service Agreement to another designated and pre-existing Receipt Point or Delivery Point respectively.  EAPL may only withhold its consent to such a transfer on reasonable commercial or technical grounds and may make its consent subject to conditions if they are reasonable on commercial or technical grounds, which will include:

(1)	the User and EAPL execute an amendment to the relevant Service Agreement setting out the new Receipt Delivery Point and the portion of the MDQ and MHQ so transferred;

(2)	the User pays EAPL a reasonable charge for the costs incurred in arranging the transfer;

(3)	the User agrees to pay the charges applicable to the new transportation distance which shall not be less than the original charges;

(4)	EAPL has sufficient Capacity to provide the transferred Services;

(5)	the User arranges and agrees with all or any other Users of the relevant Receipt or Delivery Point for sharing of the use of facilities and charges at no additional cost to EAPL; and

(6)	the transfer not affecting EAPL’s ability to operate the Pipeline properly.

28.2	The provision for changes of Delivery Points does not apply to Class STP Service.

29.	RENEWAL

29.1	For Class FT and Class STP Services, and subject to the User giving a sufficient period of notice as set out in the agreement for Services (which shall not be less than 6 months), the User may seek the renewal of the agreement for Services on EAPL’s then current terms and conditions, subject to EAPL’s approval (which will not be unreasonably withheld).

30.	ASSURANCES

30.1	The User must provide such written assurances and information as EAPL may from time to time require with respect to the Services (including that all necessary arrangements have been made with producers of Gas, purchasers of Gas, the provision of data to the person upstream or downstream of the Receipt Point and Delivery Point, and any other party relating to the Services).

30.2	EAPL may, on reasonable grounds, suspend the Services if the User breaches the above requirements or the assurances are revoked (without the User being relieved of any liability to pay any charge).

31.	ENHANCED FACILITIES

31.1	The User will be required to enter into an  Enhanced Facilities Agreement when EAPL provides enhancement to or an extension of the Pipeline or facilities for a User under a Class FT Service Agreement.  The Enhanced Facilities Agreement will among other things set out the obligations of the parties in relation to the construction, installation, commissioning and seeking of all relevant approvals for the enhanced or extended facilities.

31.2	The Enhanced Facilities Agreement will if applicable include an obligation on the User to pay any surcharge over and above the Reference Tariff in relation to the enhanced facilities.

32.	SECURITY

32.1	The User may be required, as a pre-condition prior to entering into the agreement for Services, to provide and maintain a financial security for the due and proper performance of its obligations under the agreement for Services, in the form of an appropriate guarantee or letter of credit , or parent company guarantee.

33.	PRINCIPLES PARTICULAR TO CLASS STP SERVICE

33.1	The following clauses of this Attachment will not apply to Class STP Service:
(1)	Clauses 2.1, 3.1 and 5;
(2)	Clause 4 except in relation to ownership of Receipt Points;
(3)	Clause 6 in relation to Delivery Points; and
(4)	Clauses 9 and 27 (except in relation to a Bare Transfer as defined in the Code).

33.2	References to MDQ in this Attachment are replaced with references to MHQ for Class STP Service unless the context suggests otherwise.

33.3	References in clause 20.4 to EAPL’s entitlement upon termination of an agreement for Services to the aggregate of the capacity charge and the total surcharge payment payable by the User for the balance of the term (as discounted) will be replaced for Class STP Service with a reference to EAPL’s entitlement to a single payment of the annual Account Management Charge as reasonably determined and as set out in the agreement for Class STP Service.

33.4	As a condition of Class STP Service the User will:
(1)	construct and bear the cost of the Gas measurement and pressure reduction and control equipment and associated facilities and land at the Delivery Point located adjacent to the Pipeline and to construct and operate those facilities in accordance with reasonable industry accepted standards;
(2)	bear the cost of EAPL constructing the offtake from the Pipeline and pipe facilities which will be owned by EAPL to connect to the User’s facilities at the Delivery Point; 
(3)	obtain all licences for its equipment and co-operate with EAPL during the construction of the respective facilities; 
(4)	operate and maintain the User’s measurement and pressure reduction facilities at the User’s cost; and
(5)	provide EAPL with measurement signals on site to enable EAPL to monitor the daily Quantity delivered or if EAPL agrees where the Quantity of Gas is small, to provide EAPL with monthly reading reports on the total Gas delivered in the previous month.
33.5	If the Quantity of Gas delivered in any year under a Class STP agreement for Service exceeds 200 Terajoules, the User may negotiate with EAPL to convert from Class STP Service to Class FT Service.

34.	BACKHAUL

34.1	If the Services include a backhaul segment where the Gas is being transported for a specified distance over the Pipeline in the contrary direction to the predominant flow of Gas, then:
(1)	if in each Day of a month the aggregate of all Firm Service MDQ’s for all Users of the Pipeline in the contrary direction to the Services in the User’s agreement exceeds the aggregate of the Firm Service MDQ’s for all Users in the same direction as the User’s Services under an agreement, then in that month the User will be eligible for backhaul concessional tariffs as determined in the agreement for Services; 
(2)	
EAPL may restrict the Quantity of Gas delivered to the User in any Day, to a Quantity less than the MDQ in the User’s agreement for Services if the total Quantity transported through the backhaul segment for all Users in both directions is insufficient to maintain a net physical flow in the contrary direction to that for the User’s Services (EAPL will in any case provide such Service to the User under the agreement for Service as it is able to at the time); and
(3)	if the User is restricted from having Gas delivered under clause 34.1(2), then EAPL will provide relief from charges to the User under the agreement for Services, which relief will reflect the reduced Quantity delivered to the User as a result of the restriction.

35.	DEFINITIONS FOR PRINCIPLES FOR TERMS & CONDITIONS

Terms and expressions which are used in this Attachment, have the meaning given to those terms in the Code unless otherwise defined below.  

“Code” means the National Third Party Access Code for natural gas Pipeline Systems under the Gas Pipelines Access Law;

“Commencement Date” means 0630 hours on the date for commencement of the Services;

“Delivery Point” means the point of exit from the Pipeline specified as the delivery point in the schedule to the Service Agreement;

“EAPL” means the owner from time to time of the Pipeline which at the date of this Access Arrangement is East Australian Pipeline Limited (ACN 064 629 009);

“Enhanced Facilities Agreement” means an agreement between EAPL and a User in relation to the construction of additional, modified or enhanced facilities to provide Services;

“Firm Service” means transportation service with priority over other classes of service which will not be interrupted or curtailed except as provided under the conditions of the User’s Service Agreement or when any pre-existing contractual rights to a higher priority of service are invoked;

“Force Majeure” means any cause not reasonably within the control of the party claiming Force Majeure which results in or causes a failure by such Party in the performance of any one or more of its obligations under the agreement for Services notwithstanding the exercise by such Party of due diligence including, but not limited to:

(a)	lightning storms, earthquakes, landslides, floods, washouts and other acts of God;

(b)	fires, explosions, ruptures, breakages, breakdowns of or accidents to the Pipeline;

(c)	strikes, lockouts or other industrial disturbances;

(d)	civil disturbances, sabotage, acts of public enemies, war, blockades, insurrections, vandalism, riots, epidemics;

(e)	the order of any court, governmental body or regulatory body;

(f)	inability to obtain or curtailment of supplies of electric power, water, fuel or other utilities or services or any other materials or equipment necessary for the continued provision of Services;

(g)	inability to obtain or revocation or amendment of any permit, licence, certificate of authorisation of any governmental or regulatory body;

(h)	inability to fulfil obligations under the agreement for Services in regard to receipt or delivery of Gas from or to interconnecting pipelines (respectively) when an event of Force Majeure occurs or any curtailment or interruption occurs in relation to that interconnecting pipeline;

but does not include a lack of funds or other financial cause.

“Gas” means any natural gas which enters into the Pipeline at a Receipt Point subject to conditions in paragraph 7 and as set out in the agreement for Service;

“LinePack” means at any point in time that Quantity of Gas reasonably determined by EAPL to be the total Quantity of Gas contained in the Pipeline;

“MDQ” means the daily maximum Quantity of Gas set out in the User’s Service Agreement (excluding authorised overruns);

“MHQ” means the hourly maximum Quantity of Gas set out in the User’s Service Agreement;

“Pipeline” means at any time the Pipeline or pipeline system EAPL owns or controls and other facilities or any part or parts thereof for the purpose of transportation of Gas, including but not limited to treating, storing, exchanging, handling, odorisation, receipt or delivery of any Gas, extending from the Transfer Point at all Receipt Points to the Transfer Point at all Delivery Points;

“Quantity” or “Quantity of Gas” means a quantity of Gas, expressed in joules or multiples thereof, and calculated as the product of the heating value and the volume of that Gas;

“Receipt Point” means the point of entry into the Pipeline specified as the receipt point in the Schedule to the Service Agreement;

“Services” means the transportation of Gas through the Pipeline or part thereof as described in this Attachment and relevant agreement for Services;

“Service Agreement” means an executed agreement between EAPL and a User in relation to the Services to be provided by EAPL from time to time;

“Term” means the period from and including the Commencement Date to the Termination Date of the Service Agreement;

"Termination Date" means 0630 Hours on the date for termination of the Services;

“Transfer Point” at a Receipt Point or Delivery Point means in respect of each Receipt Point and Delivery Point, the Transfer Point for that Receipt Point or Delivery Point designated as such in the Schedule to the Service Agreement.

ATTACHMENT 4

OPERATIONAL REQUIREMENTS AND PROVISIONS
 
1	INTRODUCTION
This section summarises the requirements and supporting arrangements for nominations, allocations and balancing of the User’s Quantity of Gas into and out of the Pipeline.  Full details are set out in EAPL’s Nominations and Balancing Procedures as published and amended by EAPL from time to time, which do not form part of this Access Arrangement.

Prospective Users should note that these summarised procedures are provisional only and subject to amendment as operational practices are improved and the Pipeline is developed with additional Users.  EAPL will establish a review process to consult with industry participants and Users prior to EAPL amending these procedures.

2.	OPERATIONAL PROVISIONS
EAPL will apply the following principles and operating procedures in regard to Nominations and Balancing.  

a)	The User is expected to provide EAPL with a Nomination under each Service Agreement of the Quantity to be received into and delivered from the Pipeline for each Receipt and Delivery Point.  The Nomination must be submitted each day by a certain time or may, subject to conditions, be submitted in the form of a daily schedule as an advance nomination for a specified future period.  The Nominations may be submitted to EAPL directly or through another party.

b)	The Nominations must be made in good faith and represent the User’s best anticipations of the Quantity it expects to make available for receipt at the Receipt Point and withdraw at the Delivery Point to meet its market demands in the applicable period.  The receipt Nomination may differ from the delivery Nomination to take account of adjustment to the User’s Inventory on the Pipeline.

c)	The User is expected to match the Quantity of gas received by EAPL and the Quantity withdrawn by the User over a period of time, to ensure that the User imbalance trends to zero and in any case remains within specified balancing tolerance limits.  The tolerance limits will be 10% of the Users MDQ for daily imbalance and 2% and 0.5% of the MDQ for the cumulative imbalance over weekly and monthly periods respectively.

d)	EAPL will communicate with the User (directly or through another party) to advise of its ability to transport and deliver the nominated Quantity and, subject to meeting certain conditions, will accept the Nomination as a Confirmed Nomination.  The Confirmed Receipt Nomination may include an adjustment for change of linepack in the Pipeline.

e)	The Nominations under each User’s Service Agreement must conform with the maximum Quantities the User is entitled to receive and deliver each day under the agreement for Services, but EAPL may accept an excess Quantity if certain conditions are met.

f)	EAPL will allocate service each day to Users with valid nominations in accordance with the priority of the class of service.  Subject to any pre existing contractual rights, Firm Service within the contract MDQ will have highest priority, with lower priorities to overruns, interruptible service, and late nominations.

g)	The actual Quantity that EAPL has received from the User each day and has delivered to the User each day will either be the measured Quantity at single-User Receipt Points or Delivery Points, or will be a Quantity allocated to the User from the aggregate Quantity measured at that facility, using an allocation methodology.  The allocation may be generally based on a proportion of the aggregate Quantity pro rata to the Nomination or the Quantity may be deemed to be equal to the Nomination at some facilities.  The Quantity so measured or allocated will be used by EAPL for invoicing and for determining the User imbalance on the  Pipeline.

h)	Unless Users are supplying the EAPL operational gas ‘in kind’, EAPL will decrease the aggregate receipt Quantity by the amount of the gas EAPL uses for fuel and Pipeline operation and will adjust for metering difference over the total system.

i)	If the User’s cumulative imbalance on the  Pipeline exceeds the tolerance limits specified for a period, the User is expected to rectify the imbalance.  If the imbalance is not rectified in a reasonable period, EAPL may reduce the quantity received from or delivered to the User until the imbalance is rectified.

j)	If the User exceeds the tolerance limits and does not rectify the imbalance after notice from EAPL to overcome the imbalance, EAPL may impose balancing charges on the User.

k)	The User may trade its inventory on the Pipeline with other Users, for the purpose of maintaining balance.

l)	EAPL will issue and from time to time amend operational procedures to describe the Nominations and Balancing requirements which will form part of the conditions of contract and be binding on the parties.  EAPL may also enter into agreements or arrangements with suppliers of gas and other interconnecting pipeline operators to facilitate these operating procedures.  The procedures in this Attachment 4 are provisional only and may be amended by EAPL in consultation with Users and the ACCC.  EAPL will establish a consultation process to discuss any amendments with Users and the ACCC prior to these amendments being placed into operation.

m)	Class STP Service Users will not be required to submit daily nominations but may provide a nomination for each day for a period not exceeding one month.  In the absence of such nomination, EAPL will determine the delivery quantity for each day from the estimated annual quantity set out in the Service Agreement.

ATTACHMENT 5

MAP OF PIPELINE

EAST AUSTRALIAN PIPELINE LIMITED

NATURAL GAS PIPELINE SYSTEM

ATTACHMENT 6

REQUEST FOR TRANSPORTATION SERVICES
REQUEST SHEET

PROSPECTIVE USER:
	Name:  	
	ACN:  	
	Registered Office Address:  	

	Contact Address:  	
	Telephone:  	
	Facsimile:     	
	Authorised Representative:  	
	Parent Company Name and ACN (if applicable):  	
	Parent Company Registered Office Address (if applicable):  	

Contract:
	Class of Service Sought:  	
		
	Proposed Term of Contract:  ....................... years
	Commencement Date:	………………….	
	Termination Date:	………………….	

Receipt Point into Pipeline:		

Delivery Point from Pipeline:  	

Technical Requirements:
	Minimum Delivery Pressure:			kPag
	Minimum Receipt Pressure:			kPag
	Maximum Receipt Pressure:			kPag
	Particular Gas Quality Requirements (if different to the standard specification of gas to be delivered by EAPL):	
		
	Other Conditions:      	

Arrangements In Relation To Supply Of Gas To The Receipt Point (optional):
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Arrangements In Relation To Taking Of Gas From The Delivery Point (optional):
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Quantities Sought to be Transported:

		Maximum Daily 	Estimated Annual 
	Year	Quantity	Quantity
	ending 30 June	Terajoules/Day	Petajoules/Annum

	...................	...................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................
	....................	....................................	....................................

Signed by..............................................................	Date:     	
for and on behalf of…………………………….
………………………………………………….

ATTACHMENT 7

GAS QUALITY SPECIFICATION

1.	Gas delivered from the Pipeline by EAPL at the Delivery Point will (subject to paragraph 3 below) comply with the gas quality specification set out in Table A7.1, and in accordance with EAPL’s Principles for Terms and Condition, Users shall provide Gas at the Receipt Point in accordance with the Gas Specification set out in Table A7.1.  However, EAPL may agree to accept a Receipt Gas Specification in a Service Agreement which differs from the Delivery Gas Specification.  In these circumstances the User is required to restrict or terminate (or EAPL has the right to restrict or terminate) the quantity of Gas received into the Pipeline at the Receipt Point as and when required to meet EAPL’s obligations regarding the quality of Gas at Delivery Points. 
2.	An operational procedure may be established by EAPL to make allowance for short periods of excursion of the Gas parameters outside the maximum notice specified.  The procedure may include, for each parameter, both an alarm level with time limits on non-compliance within any given period, and an overriding level for immediate supply termination by a party after consultation in the event of non-compliance to the Gas Specifications.  Note that the sulphur limits apply prior to odorisation of the Gas.

3.	The Australian Gas Association is currently coordinating an initiative with other stakeholders to develop a common gas specification for NSW, the ACT and Victoria. In the interests of fostering competition in Gas supply, EAPL may vary the Receipt Gas Specification or Delivery Gas Specification below if a common specification for New South Wales, the Australian Capital Territory and Victoria is adopted.

TABLE A7.1

GAS SPECIFICATION

Parameter
	Minimum
Value	Maximum Value
(Continuous)	
Heating Value 
(Daily Average)
Wobbe Index
Water Dewpoint
Hydrocarbon Dewpoint
Carbon Dioxide
Oxygen
Total Sulphur
Mercaptan Sulphur
Hydrogen Sulphide
Solid Particulates and Liquids	37.45MJ/m3

47.4
-
-
-
-
-
-
-
-	Determined by other parameters
51.1
0 degrees C at 6895 kPa
10 degrees C at 3500 kPa
3.0% V/V
0.1% V/V
23 mg/ m3
4.6 mg/ m3
5.7 mg/ m3
Nil