Contract #910333 SERVICE AGREEMENT FOR RATE SCHEDULE FT-1 This Service
Agreement, made and entered into this @->)-T@@day of Ma



Contract
#910333 




SERVICE
AGREEMENT


FOR
RATE SCHEDULE FT-1




This Service
Agreement, made and entered into this 27th day of March, 2002, by
and between TEXAS EASTERN TRANSMISSION, LP, a Delaware Limited Partnership
(herein called "Pipeline") and NUI Utilities, Inc. (herein called
"Customer", whether one or more),




W
I T N E S S E T H:




WHEREAS,
Pipeline and Customer are currently parties to three executed service
agreements under Pipeline's Rate Schedule FTS-2 (Pipeline's Contract No.
3.30788), CDS (Pipeline"s Contract No. 800361), and FT-1 (Pipeline's
Contract No. 800338) which specify an MDQ of 5,394 dth, 3,603 dth, and 2,829
dth, respectively; and 




WHEREAS,
Pipeline and Customer desire to enter into this Service Agreement to supersede
and combine Customer's transportation rights under Pipeline's Contract Nos.
800361, and 800338; into this existing 330788 




NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the parties do covenant and agree as follows: 




ARTICLE
I


 


SCOPE
OF AGREEMENT




Subject
to the terms, conditions and limitations hereof, of Pipeline's Rate Schedule
FT-1, and of the General Terms and Conditions, transportation service hereunder
will be firm.  Subject to the terms,
conditions and limitations hereof and of Pipeline's Rate Schedule FT-1,
Pipeline agrees to deliver for Customer's account quantities of natural gas up
to the following quantity: 




Maximum Daily Quantity (MDQ) 5,394 dth 





SERVICE
AGREEMENT

FOR
RATE SCHEDULE FT-1


(Continued)




Pipeline
shall receive for Customer's account, at those points on Pipeline's system as
specified in Article IV herein or available to Customer pursuant to Section 14
of the General Terms and Conditions (hereinafter referred to as Point(s) of
Receipt) for transportation hereunder daily quantities of gas up to Customer's
MDQ, plus Applicable Shrinkage.  Pipeline shall transport and deliver for Customer's account, at those
points on Pipeline's system as specified in Article IV herein or available to
Customer pursuant to Section 14 of the General Terms and Conditions
(hereinafter referred to as Point(s) of Delivery), such daily quantities
tendered up to such Customer's MDQ. 




Pipeline
shall not be obligated to, but may at its discretion, receive at any Point of
Receipt on any day a quantity of gas in excess of the applicable Maximum Daily
Receipt Obligation (MDRO), plus Applicable Shrinkage, but shall not receive in
the aggregate at all Points of Receipt on any day a quantity of gas in excess
of the applicable MDQ, plus Applicable Shrinkage.  Pipeline shall not be obligated to, but may at its discretion,
deliver at any Point of Delivery on any day a quantity of gas in excess of the
applicable Maximum Daily Delivery Obligation 
(MDDO), but shall not deliver in the aggregate at all Points of Delivery
on any day a quantity of gas in excess of the applicable MDQ.  In addition to the MDQ and subject to the
terms, conditions and limitations hereof, Rate Schedule FT-1 and the General
Terms and Conditions, Pipeline shall deliver within the Access Area under this
and all other service agreements under Rate Schedules CDS, FT-1, and/or SCT,
quantities up to Customer's Operational Segment Capacity Entitlements,
excluding those operational Segment Capacity Entitlements scheduled to meet
Customer's MDQ, for Customer's account, as requested on any day. 




ARTICLE
II


 


TERM
OF AGREEMENT




The
term of this Service Agreement shall commence on April 1, 2002 and shall
continue in force and effect until March 31, 2014 and year to year thereafter
unless this Service Agreement is terminated as hereinafter provided. This
Service Agreement may be terminated by either Pipeline or Customer upon a one
(1) year prior written notice to the other specifying a termination date of 




2




SERVICE
AGREEMENT FOR RATE


SCHEDULE
FT-1


(Continued)




March 31, 2014
or any March 31 thereafter.  Subject to
Section 22 of Pipeline's General Terms and Conditions and without prejudice to
such rights, this Service Agreement may be terminated at any time by Pipeline
in the event Customer fails to pay part or all of the amount of any bill for
service hereunder and such failure continues for thirty (30) days after payment
is due; provided, Pipeline gives thirty (30) days prior written notice to
Customer of such termination and provided further such termination shall not be
effective if, prior to the date of termination, Customer either pays such
outstanding bill or furnishes a good and sufficient surety bond guaranteeing
payment to Pipeline of such outstanding bill. 




THE
TERMINATION OF THIS SERVICE AGREEMENT WITH A FIXED CONTRACT TERM OR THE
PROVISION OF A TERMINATION NOTICE BY CUSTOMER TRIGGERS PREGRANTED ABANDONMENT
UNDER SECTION 7 OF THE NATURAL GAS ACT AS OF THE EFFECTIVE DATE OF THE
TERMINATION.  PROVISION OF A TERMINATION
NOTICE BY PIPELINE ALSO TRIGGERS CUSTOMER'S RIGHT OF FIRST REFUSAL UNDER
SECTION 3.13 OF THE GENERAL TERMS AND CONDITIONS ON THE EFFECTIVE DATE OF THE
TERMINATION. 




Any
portions of this Service Agreement necessary to correct or cash-out imbalances
under this Service Agreement as required by the General Terms and Conditions of
Pipeline's FERC Gas Tariff, Volume No. 1, shall survive the other parts of this
Service Agreement until such time as such balancing has been accomplished. 




ARTICLE
III


 


RATE
SCHEDULE




This
Service Agreement in all respects shall be and remain subject to the applicable
provisions of Rate Schedule FT-1 and of the General Terms and Conditions of
Pipeline's-FERC Gas Tariff on file with the Federal Energy Regulatory
Commission, all of which are by this reference.made a part hereof. 




Customer
shall pay Pipeline, for all services rendered hereunder and for the
availability of such service in the period stated, the applicable prices
established under Pipeline's Rate Schedule FT-1 as filed with the Federal
Energy Regulatory Commission, and as same may hereafter be legally amended or
superseded. 




3




SERVICE
AGREEMENT


FOR
RATE SCHEDULE FT-1


(Continued)




Customer
agrees that Pipeline shall have the unilateral right to file with the
appropriate regulatory authority and make changes effective in (a) the rates
and charges applicable to service pursuant to Pipeline's Rate Schedule FT-1,
(b) Pipeline's Rate Schedule FT-l pursuant to which service hereunder is
rendered or (c) any provision of the General Terms and Conditions applicable to
Rate Schedule FT-1.  Notwithstanding the
foregoing, Customer does not agree that Pipeline shall have the unilateral
right without the consent of Customer subsequent to the execution of this
Service Agreement and Pipeline shall not have the right during the
effectiveness of this Service Agreement to make any filings pursuant to Section
4 of the Natural Gas Act to change the MDQ specified in Article 1, to change
the term of the agreement as specified in Article II, to change Point(s) of
Receipt specified in Article IV, to change the Point(s) of Delivery specified
in Article IV, or to change the firm character of the service hereunder.  Pipeline agrees that Customer may protest or
contest the aforementioned filings, and Customer does not waive any rights it
may have with respect to such filings. 




ARTICLE
IV


 


POINT(S)
OF RECEIPT AND POINT(S) OF DELIVERY




The
Point(s) of Receipt and Point(s) of Delivery at which Pipeline shall receive
and deliver gas, respectively, shall be specified in Exhibit (s) A, B, and C of
the executed service agreement.




Exhibit(s)
A, B, and C are hereby incorporated as part of this Service Agreement for all
intents and purposes as if fully copied and set forth herein at length. 




ARTICLE
V


 


QUALITY




All
natural gas tendered to Pipeline for Customer's account shall conform to the
quality specifications set forth in Section 5 of Pipeline's General Terms and
Conditions.  Customer agrees that in the
event Customer tenders for service hereunder and Pipeline agrees to accept
natural gas which does not comply with Pipeline's quality specifications, as
expressly provided for in Section 5 of 




4




SERVICE
AGREEMENT


FOR
RATE SCHEDULE FT-1


(Continued)




Pipeline's
General Terms and Conditions, Customer shall pay all costs associated with
processing of such gas as necessary to comply with such quality
specifications.  Customer shall execute
or cause its supplier to execute, if such supplier has retained processing
rights to the gas delivered to Customer, the appropriate agreements prior to
the commencement of service for the transportation and processing of any
liquefiable hydrocarbons and any PVR quantities associated with the processing
of gas received by Pipeline at the Point(s) of Receipt under such Customer's service
agreement. In addition, subject to the execution of appropriate agreements,
Pipeline is willing to transport liquids associated with the gas produced and
tendered for transportation hereunder. 




ARTICLE
VI


 


ADDRESSES




Except
as herein otherwise provided or as provided in the General Terms and Conditions
of Pipeline's FERC Gas Tariff, any notice, request, demand, statement, bill or
payment provided for in this Service Agreement, or any notice which any party
may desire to give to the other, shall be in writing and shall be considered as
duly delivered when mailed by registered, certified, or regular mail to the
post office address of the parties hereto, as the case may be, as follows: 




(a)
Pipeline:     TEXAS EASTERN TRANSMISSION,
LP 


5400 Westheimer Court 


Houston, TX 77056 




(b)
Customer     NUI Utilities, Inc. 


550 Route 202/206 


Bedminster, NJ 07921 




or such other
address as either party shall designate by formal written notice. 
















5




SERVICE
AGREEMENT


FOR
RATE SCHEDULE FT-1


(Continued)


 


ARTICLE
VII


 


ASSIGNMENTS




Any
Company which shall succeed by purchase, merger, or consolidation to the
properties, substantially as an entirety, of Customer, or of Pipeline, as the
case may be, shall be entitled to the rights and shall be subject to the
obligations of its predecessor in title under this Service Agreement; and
either Customer or Pipeline may assign or pledge this Service Agreement under
the provisions of any mortgage, deed of trust, indenture, bank credit
agreement, assignment, receivable sale, or similar instrument which it has
executed or may execute hereafter; otherwise, neither Customer nor Pipeline
shall assign this Service Agreement or any of its rights hereunder unless it
first shall have obtained the consent thereto in writing of the other; provided
further, however, that neither Customer nor Pipeline shall be released from its
obligations hereunder without the consent of the other.  In addition, Customer may assign its rights
to capacity pursuant to Section 3.14 of the General Terms and Conditions.  To the extent Customer so desires, when it
releases capacity pursuant to Section 3.14 of the General Terms and Conditions,
Customer may require privity between Customer and the Replacement Customer, as
further provided in the applicable Capacity Release Umbrella Agreement. 




ARTICLE
VIII


 


INTERPRETATION




The
interpretation and performance of this Service Agreement shall be in accordance
with the laws of the State of Texas without recourse to the law governing
conflict of laws. 




This
Service Agreement and the obligations of the parties are subject to all present
and future valid laws with respect to the subject matter, State and Federal,
and to all valid present and future orders, rules, and regulations of duly
constituted authorities having jurisdiction. 












6




SERVICE
AGREEMENT


FOR
RATE SCHEDULE FT-1


(Continued)


 


ARTICLE
IX


 


CANCELLATION
OF PRIOR CONTPACT(S)




This
Service Agreement supersedes and cancels, as of the effective date of this
Service Agreement, the contracts between the parties hereto as described below:





Service
agreement under Pipeline's Rate Schedule FTS-2 (Pipeline's Contract No.
330788). 




Service
agreement under Pipeline's Rate Schedule CDS (Pipeline's Contract No. 800361). 




Service
agreement under Pipeline's Rate Schedule FT-1 (Pipeline's Contract No. 800338).

























































7




SERVICE
AGREEMENT


FOR
RATE SCHEDULE FT-1


(Continued)






IN WITNESS
WHEREOF, the parties hereto have caused this Service Agreement to be signed by
their respective Presidents, Vice Presidents or other duly authorized agents
and their respective corporate seals to be hereto affixed and attested by their
respective Secretaries or Assistant Secretaries, the day and year first above
written. 






TEXAS EASTERN TRANSMISSION LP 




                        
By: /S/ Gregory J. Rizzo


                             
Sr.Vice
President Marketing &


                             
Capacity
Mgmt.




ATTEST:




/S/ Beverly J.
Fitt


     Assistant Secretary




                        
NUI Utilities, Inc.




                        
By: /S/ Thomas E. Smith


                             
Director,
Energy Planning




ATTEST:




/S/ Joyce M.
Fajnor


     Assistant Secretary






























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