Common use of Rights as to Off Specification Gas Clause in Contracts

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.