Rights as to Off Specification Gas Clause Samples

Rights as to Off Specification Gas. If any of the gas delivered by Seller should fail to meet the quality specifications stated in this Paragraph, Buyer may at its option accept delivery of and pay for such gas or discontinue or curtail Seller’s delivery of off specification gas whenever its quality does not conform to the quality specifications. If Buyer accepts delivery of off specification gas from Seller or incurs costs relating to inferior gas quality in its gathering system, Buyer may deduct from the proceeds otherwise payable a fee to cover the actual and reasonable costs incurred by Buyer to monitor the gas quality and to bring the gas within the quality specifications. If a gas quality issue arises and Seller concludes that it cannot economically deliver gas conforming to the specifications, Seller shall promptly so advice Buyer in writing. Within thirty (30) days of receipt of such a notice from Seller, Buyer shall give notice to Seller in writing of its election to accept or reject delivery of such gas. If Buyer rejects delivery, then Buyer’s notice will terminate this Contract with respect to the off specification gas named in the notice.

Rights as to Off Specification Gas. Except as otherwise provided in this Agreement to the contrary, if any of the Gas delivered by Supplier fails to meet the quality specifications stated in this Section, Processor may at its option accept delivery of the Gas or discontinue or curtail taking of Gas at any Delivery Point whenever its quality does not conform to the quality specifications. If Processor accepts delivery of off specification Gas from Supplier or incurs costs relating to inferior gas quality in its gathering system, Processor may charge or deduct from the proceeds otherwise payable a reasonable fee for monitoring the gas quality and treating and handling the Gas. Processor typically adjusts gas quality deduction levels annually, but may do so more often if needed. A rejection of any Gas delivered by Supplier based on such Gas failing to meet the required quality specifications shall not relieve or release Supplier from its obligation to deliver for processing the Minimum Volume Commitment and Supplier’s obligation to pay the Monthly Shortfall Payment. Notwithstanding the foregoing, to the extent there exists current third party contractual obligations requiring Supplier to accept Raw Gas that fails to meet the required specifications, subject to Supplier paying to Processor any incremental fees that Supplier is allowed to charge for accepting such Raw Gas, Processor agrees to accept the delivery of such Raw Gas and Supplier agrees to pay such incremental amounts to Processor, which shall be in addition to the Processing Fee. Supplier further agrees that prior to entering into any new contractual arrangements subsequent to the Effective Date requiring Supplier to purchase or accept Raw Gas at gas specifications more detrimental than those provided for in this Agreement, Supplier shall obtain Processor’s prior written consent thereto prior to entering into any such third party agreement.

Rights as to Off Specification Gas. If any of the gas delivered by Supplier fails to meet the quality specifications stated in this Section, Processor may at its option accept delivery of the gas or discontinue or curtail taking of gas at any Delivery Point whenever its quality does not conform to the quality specifications. If Processor accepts delivery of off specification gas from Supplier or incurs costs relating to inferior gas quality in its gathering system, Processor may charge or deduct from the proceeds otherwise payable a reasonable fee for monitoring the gas quality and treating and handling the gas. Processor typically adjusts gas quality deduction levels annually, but may do so more often if needed.

Rights as to Off Specification Gas. If any of the gas delivered by Seller fails to meet the quality specifications stated in this Section F, Buyer may at its option accept delivery of and pay for the gas or discontinue or curtail taking of gas at any Delivery Point whenever its quality does not conform to the quality specifications. If Buyer accepts delivery of off specification gas from Seller or incurs costs relating to inferior gas quality in its gathering system, Buyer will deduct from the proceeds otherwise payable a fee of $0.05/Mcf plus $0.02 times the total mole percent, and any fraction of a mole percent, of H2S and CO2 times the Mcf quantity delivered at the affected off quality Delivery Points. If Buyer rejects delivery, Buyer’s notice to that effect will terminate this Contract with respect to the off specification gas named in the notice. If Buyer accepts delivery of gas from Seller that is off specification for nitrogen content, Buyer will deduct a fee of $0.06/Mcf for each mole percent, and each fraction of a mole percent, of nitrogen content over the allowed nitrogen specification for all volumes delivered by Seller at the affected excess nitrogen Delivery Points. As of the beginning of each calendar year beginning with 2011, Buyer will adjust the current year’s off-specification fees upward or downward, but not below the initial fees, by an amount equal to the annual percentage change in the preliminary estimate of the implicit price deflator, seasonally adjusted, for the gross domestic product (“GDP”) as computed and most recently published by the U.S. Department of Commerce, rounded to the nearest 100th cent, or in its absence, a similar successor adjustment factor designated by Buyer.