Firm Storage Service Agreement
(Gas)

Summary

This template is a firm storage service agreement used for guaranteed or "firm" storage services for natural gas at an underground natural gas storage facility serving intrastate customers only. This agreement specifies the conditions precedent necessary for the storage services at the facility to commence. This template includes practical guidance, drafting notes, and alternate and optional clauses. When natural gas is produced at the wellhead, the only way to feasibly transport it to a processing facility, and ultimately to the end user, is to use a series of natural gas pipelines. At certain points along a pipeline, underground storage reservoirs are utilized to store large amounts of natural gas for future use. This storage may be needed because prices have fallen, natural gas supply has surged thanks to new wells or fields coming online, or because the natural gas was produced during a seasonal period of lower electricity demand (such as spring or fall). This agreement is between a natural gas storage provider, and a pipeline owner/operator that qualifies as solely an intrastate pipeline under Section 311 of the Natural Gas Policy Act. The agreement is to become effective after the construction and development of the proposed facility has been completed and upon approvals from certain state and federal regulatory agencies. The agreement contemplates that the parties will also enter into a master service agreement, which would be attached in final, draft template as an exhibit. This template may be used in anticipation of any contemplated service at a proposed natural gas facility for gathering, processing, pipeline, or storage services. For additional information on midstream energy, including pipeline transportation, and the underground storage of hydrocarbons, see Regulation of Hydrocarbon Storage (TX), Regulation of Hydrocarbon Storage (PA), Regulation of Hydrocarbon Storage (OK), Regulation of Hydrocarbon Storage (OH), Regulation of Hydrocarbon Storage (ND), Midstream Oil & Gas Transactions and Agreements , and Acquisition, Construction, and Project Development.