1. Nominations PEA Meeting October 2012

2. Why ask for Nominations? In a common carriage system gas flows must be approved in advance to keep them within pipeline capacity. This requires: – A flexible system that allows nominations to be changed as demand estimates change. (ID cycles). – A method for assessing nominations against known pipeline constraints; either: at the receipt point, at the delivery point, or against the known capacity constraints in the pipeline itself. This normally requires a dedicated IT system.

3. Curtailment The nominations system’s objective is to schedule gas flows into and out of the pipeline at each point. Deviations from scheduled flow can usually be absorbed by the pipeline line pack and remedied later. Large deviations require the operator to curtail the corresponding receipt or delivery nomination to maintain pipeline balance. Very large reductions in delivery capacity require gas to be allocated independently of contractual requirements. This requires regulation.

4. Shippers and Welded Parties On the Maui Pipeline, scheduled (nominated) quantities requested by Shippers are important. – They determine the deliveries under gas supply contracts. – They are used to calculate transmission tariffs. – They determine title transfer. Metered quantities, (actual flows), are not the same. – The difference between metered and scheduled gas flows is a matter between the pipeline operator and the Welded Point owner. – It may involve a forced sale or purchase of gas by the Welded Point to make up the difference, or a payment.