Updated 6/22/2015

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Pooling Gas on SNG with the

DART System

Updated June 22, 2015 for

April 1, 2016 Business

Updated 6/22/2015

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Agenda

• Project Timeline

• Change in the Pool Structure

– Mechanics

– Example

– Segment Scheduling

– Receipt Point Assignments

– Buy/Sell Transactions

• Appendix A – Receipt Points to Pool PINs

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Project Timeline

Mar 11, 2015 SNG proposed additional enhancements to its DART

features in response to customer concerns, and agreed to

delay implementation until April 1, 2016 with significant time

to learn DART starting June 2015 forward

Apr 14, 2015 SNG filed its pro forma Tariff revisions with FERC to

implement DART April 1, 2016

June 23, 2015 Open “sandbox” version of DART for customers’ training

using converted data; each month new features will be

available for training (phased functionality over summer/fall)

Sept – Oct 2015 Hands-on training in Houston, Birmingham and Atlanta;

refresher training in 1Q 2016

Mid-March 2016 Open DART for April 1, 2016 business

April 1, 2016 Convert from SoNet Premier to the DART system

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Data Set-up in DART

• SNG will transfer certain customer data from Premier to DART – Any contracts for FT, FTNN, IT, CSS, ISS and/or PAL with new

contract numbers assigned

– One pool contract will be set up for pooler to execute on-line

– Capacity release transactions in effect on the Go-Live date will be converted, or SNG will work with the customer to accomplish

• We will not convert receipt point assignments to poolers but work with each customer to set up

– Contact data on file

– Agency agreements

– Credit data on file

• Customer will need to execute a DART System License Agreement if they do not use DART today – Also, appoint a security administrator to set up and administer

security roles for the customer’s employees in DART

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Overview of Key Changes

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SNG Will Adopt

DART’s Pathed Business Functionality

• Firm transportation contract rights will be pathed

and displayed in DART

– Based on each firm contract package awarded to

Shipper as set forth on its firm contract

• SNG will adopt the NAESB pathed, non-threaded

nomination model utilized by DART

– Geographic locations will be established for storage and

supply pools

• Sufficient information will reside in DART to allow

for pipeline segment scheduling using contract

path priorities and pathed nominations

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Overview Comparison of Key

Changes with DART for Suppliers/Poolers Today, In Premier Future, in DART

• Nominations can be to/from a pool

contract or storage contract using

counterparty’s contract number.

• Tier 1 to Tier 2 pool restrictions

• There will be multiple pooling locations

on the pipeline, and a location for

storage, as receipt or delivery points

• Eliminate Tier 1/Tier 2 pool distinction

• One pooling contract should be

sufficient

• Unlimited buys/sells at pool locations

• Scheduling through a pipeline

constraint uses each shipper’s

rights for a group of points

• Scheduling through a constraint will

use each shipper’s contract path rights

through the pipeline segment

• Confirmations are at the entity and

contract level and may be before

or after pipeline scheduling

• Confirmation will be at the entity level,

unless agreed otherwise, and will

always reflect pipeline scheduling

results

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Today, In Premier Future, in DART

• Point codes (location proprietary

codes) are 6 digit numeric

• PINs – Point Identification Numbers

will be 6 digit numeric (many will stay

the same)

• Customer number assigned per

entity

• DUNS is supported

• Upstream/downstream names are

not validated

• GID –Global Identification number

assigned per entity

• DUNS is supported

• Upstream/downstream parties must

be set up in DART

• Allocations updated 2 days after

gas flow

• Allocations updated as measurement

is received after gas day ends

• Measurement info is in Premier • Measurement info is in DART;

screens will be enhanced

• Preliminary cashout is billed with

the production month, then trued up

for any trades or reconciliations with

storage

• Cashout is billed on a one month lag

to allow for trades and reconciliations

with storage

Overview Comparison of Key

Changes with DART for Suppliers/Poolers

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Changes to SNG’s Pool Structure

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New Pooling Structure Overview

for April 1, 2016

• Pool PINs* will be established at geographic locations in each zone for purposes of aggregating gas supply for sale/purchase, and to support the pathed nomination model – System-wide pools without a pipeline location will no longer exist

– Tier 1 and Tier 2 pool restrictions will be eliminated

– Supplier needs only 1 pool contract to nominate supply from receipt points to eligible Pool PIN(s)

• Nominations on a pool contract or transport contract from receipt points to eligible Pool PINs will not be billed transportation commodity or fuel (see Appendix A) – The Shipper will be billed commodity charges from the Pool PIN

to the zone of delivery under its transportation contract

– If a customer wants to nominate from a receipt point to an ineligible Pool PIN, it can nominate under a transport contract and pay transportation commodity and fuel to get to a different Pool PIN

*PINS = Point Identification Numbers; aka points or locations

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New Pooling Structure Overview

• Receipt Points that can be nominated to each Pool PIN without fuel and transport being charged are set forth on Appendix A using the following guidelines: – All receipt points can be nominated to the South Louisiana

Zone 0 Pool PIN (enhancement announced 3/11/15)

– Receipt points can be nominated to the Pool PIN that is in the same zone and on the same system (i.e., north or south)

– Receipt points on the same system can also be nominated to Pool PIN(s) in all upstream zones along the same system (i.e., north or south)

– Receipt points in Zone 1 can be nominated to any Pool PIN in Zone 1

– The Storage PIN can be nominated to any Zone 0 and Zone 1 Pool PINs

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Pool PINs Proposed for

the DART Conversion

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Diagram of DART Pool Nomination

Sabine to South Louisiana Zone 0 Pool Pin

Offsystem Supply (400):

Up ID: Party A

Up K or Package: 115419

Offsystem Supply (600):

Up ID: Party B

Up K or Package: 115420

Sabine Sabine to Pool PIN

(Pool K) – (1,000)

SELL

(Shipper3

300)

SELL

(Shipper2

500)

SELL

(Shipper1

200)

South

LA

Zone 0

Pool

PIN

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Nomination from Sabine to

South Louisiana Zone 0 Pool PIN

Upstream:

Transaction Party/Contract Pin Rank Nom Package ID

Offsystem Supply Party A - 115419 1 400

Offsystem Supply Party B - 115420 1 600Totals 1000

Downstream:

Pooling Pool Contract South LA Zn 0 Pool 1 1000

Totals 1000

Sabine

Upstream:

Transaction Contract Pin Rank Nom Package ID

Pooling Pool Contract Sabine 1 1000Totals 1000

Downstream:

Sell Shipper1 1 200

Sell Shipper2 1 500

Sell Shipper3 1 300

Totals 1000

South LA Zone 0 Pool PIN

* Automatically created transactions at Pool PIN based on Sabine nomination

*

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Scheduling

• Scheduling will be at – The pipeline segment level for pipeline constraints

– The point level for meter capacity constraints

• Capacity Split screen in DART will show scheduling priorities for submitted nominations – Segment and Point level views

• Segment scheduling priorities: – Firm service

• Primary firm contract routes

• In Path routes (primary within the segment path)

• Out of Path routes (within zone rights but outside primary path rights)

– Interruptible Service • IT and AO based on rate

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SNG & EEC Lines and Segments

With Pooling Points

DRAFT 6/15/15

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Scheduling Gas from

Receipt Point to Pool PIN

• Nominations on a pool contract are scheduled

based on tariff scheduling priorities

− Pool nominations are interruptible

• Pooler can get an out-of-path firm priority if it

nominates at the Pool PIN directly to a shipper

that is − Nominating under a firm transportation contract, and

− The firm shipper ranks the pooler’s gas to get the priority

− This replicates how poolers get an out-of-path (A-1) priority

in Premier

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Scheduling Priorities of a Pool Contract

Supplier Z uses pool contract to nominate Logansport gas supply

(200 Dth) to sell at North LA Zone 0 Pool to Customer A (100 Dth) and

Customer B (100 Dth) who are buying gas only from Supplier Z

Supplier Z’s pool contract scheduling priorities at the constraint

Out of Path –100 IT - 100

Pipeline Constraint

Pool PINs

Customer A – Transport on IT

Customer B – Transport on Master FT

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Capacity Release of Firm Receipt

Rights to a Supply Pooler

• Today, a pooler can also acquire firm “A” receipt points to enhance its priority of service − In DART, there will be a new process for acquiring receipt side

capacity

• Basic rules – A firm Shipper can release capacity from its firm receipt point to an

eligible pool location in the same zone provided the Pool Pin is in the firm Shipper’s Primary Path

– Replacement Shipper will acquire this capacity under a special purpose master FT contract

• This master FT is then used to nominate only from the acquired receipt point(s) or from receipt point(s) in the path to the eligible Pool PIN(s) where sales can occur

• This provides a primary firm priority at the meter stations and an in-path firm priority along the segment

• No transportation commodity or fuel will be assessed

– Releasing shipper retains out-of-path zone rights and in-path firm rights from the Pool PIN to firm delivery point

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Example: Release of a Primary

Receipt Point to Pool Location in DART

ABC Gas Company releases to Supplier XYZ: Customer Receipt Delivery QTY Contract Supplier XYZ ANR-Shadyside Zn 0 So. Pool 1,000 Special FT ABC Gas Co. Zn 0 So. Pool Aiken 1,000 Master FT

ABC Gas retains secondary firm rights in

Zone 0

Supplier XYZ – Special FT

ABC Gas – Master FT

Supplier XYZ – Special FT

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Scheduling Priorities After Release of

Firm Receipt Point to Pool PIN

Supplier XYZ has firm (“in path” rights) through

White Castle constraint ABC Gas has firm (“in path” rights) through Enterprise

constraint

Pipeline Constraint

Pool PINs

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Other Ways to Buy and Sell

Aggregated Gas Supplies

• Multiple title transfers will be allowed at each

Pool PIN

– Purchase will be a ‘buy’ transaction type

– Sale will be a ‘sell’ transaction type

– No contract with SNG is required for these

nominations since no transportation is taking

place and there are no imbalances

• These buy or sell transactions can occur at

– Any Pool PIN, any Receipt Point, or at the

Storage PIN

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Diagram of DART Buy/Sell Nomination

at South Louisiana Zone 0 Pool Pin

SELL

(Shipper5 - 200)

SELL

(Shipper4 - 200)

SELL

(Shipper3 - 200)

BUY

(Shipper1 - 200)

BUY

(Shipper2 - 400)

South LA

Zone 0

Pool PIN

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South LA Zone 0 Pool Nomination

Upstream:

Transaction Party/Contract

Counter Party

Nom Rank Nom Qty Package ID

Buy Shipper1 500 200

Buy Shipper2 500 400Totals 600

Downstream:

Sell Shipper3 500 200

Sell Shipper4 500 200

Sell Shipper5 500 200

Totals 600

South LA Zone 0 Pool Pin

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For Questions and Follow-up

• Contact your Account Manager

– Walter Coe, walter_coejr@kindermorgan.com

– Lisa Guthrie, lisa_guthrie@kindermorgan.com

– Jerry Nelson, jerry_nelson@kindermorgan.com

• Or contact Gina Mabry, Scheduling Manager, gina_mabry@kindermorgan.com

• Or submit questions to #Premier2DART@kindermorgan.com

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Appendix A

Receipt Points Mapped to

Eligible Pool PIN(s)

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