Contract#910333 

SERVICEAGREEMENT

FORRATE SCHEDULE FT-1

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

WI T N E S S E T H:

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

WHEREAS,Pipeline and Customer desire to enter into this Service Agreement to supersedeand 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 andagreements herein contained, the parties do covenant and agree as follows: 

ARTICLEI

 

SCOPEOF AGREEMENT

Subjectto the terms, conditions and limitations hereof, of Pipeline's Rate ScheduleFT-1, and of the General Terms and Conditions, transportation service hereunderwill 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 upto the following quantity: 

Maximum Daily Quantity (MDQ) 5,394 dth 

SERVICEAGREEMENTFORRATE SCHEDULE FT-1
(Continued)

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

Pipelineshall not be obligated to, but may at its discretion, receive at any Point ofReceipt on any day a quantity of gas in excess of the applicable Maximum DailyReceipt Obligation (MDRO), plus Applicable Shrinkage, but shall not receive inthe aggregate at all Points of Receipt on any day a quantity of gas in excessof 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 theapplicable Maximum Daily Delivery Obligation (MDDO), but shall not deliver in the aggregate at all Points of Deliveryon any day a quantity of gas in excess of the applicable MDQ.  In addition to the MDQ and subject to theterms, conditions and limitations hereof, Rate Schedule FT-1 and the GeneralTerms and Conditions, Pipeline shall deliver within the Access Area under thisand 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 meetCustomer's MDQ, for Customer's account, as requested on any day. 

ARTICLEII

 

TERMOF AGREEMENT

Theterm of this Service Agreement shall commence on April 1, 2002 and shallcontinue in force and effect until March 31, 2014 and year to year thereafterunless this Service Agreement is terminated as hereinafter provided. ThisService 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 

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SERVICEAGREEMENT FOR RATE

SCHEDULEFT-1

(Continued)

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

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

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

ARTICLEIII

 

RATESCHEDULE

ThisService Agreement in all respects shall be and remain subject to the applicableprovisions of Rate Schedule FT-1 and of the General Terms and Conditions ofPipeline's-FERC Gas Tariff on file with the Federal Energy RegulatoryCommission, all of which are by this reference.made a part hereof. 

Customershall pay Pipeline, for all services rendered hereunder and for theavailability of such service in the period stated, the applicable pricesestablished under Pipeline's Rate Schedule FT-1 as filed with the FederalEnergy Regulatory Commission, and as same may hereafter be legally amended orsuperseded. 

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SERVICEAGREEMENT

FORRATE SCHEDULE FT-1

(Continued)

Customeragrees that Pipeline shall have the unilateral right to file with theappropriate regulatory authority and make changes effective in (a) the ratesand charges applicable to service pursuant to Pipeline's Rate Schedule FT-1,(b) Pipeline's Rate Schedule FT-l pursuant to which service hereunder isrendered or (c) any provision of the General Terms and Conditions applicable toRate Schedule FT-1.  Notwithstanding theforegoing, Customer does not agree that Pipeline shall have the unilateralright without the consent of Customer subsequent to the execution of thisService Agreement and Pipeline shall not have the right during theeffectiveness of this Service Agreement to make any filings pursuant to Section4 of the Natural Gas Act to change the MDQ specified in Article 1, to changethe term of the agreement as specified in Article II, to change Point(s) ofReceipt specified in Article IV, to change the Point(s) of Delivery specifiedin Article IV, or to change the firm character of the service hereunder.  Pipeline agrees that Customer may protest orcontest the aforementioned filings, and Customer does not waive any rights itmay have with respect to such filings. 

ARTICLEIV

 

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

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

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

ARTICLEV

 

QUALITY

Allnatural gas tendered to Pipeline for Customer's account shall conform to thequality specifications set forth in Section 5 of Pipeline's General Terms andConditions.  Customer agrees that in theevent Customer tenders for service hereunder and Pipeline agrees to acceptnatural gas which does not comply with Pipeline's quality specifications, asexpressly provided for in Section 5 of 

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SERVICEAGREEMENT

FORRATE SCHEDULE FT-1

(Continued)

Pipeline'sGeneral Terms and Conditions, Customer shall pay all costs associated withprocessing of such gas as necessary to comply with such qualityspecifications.  Customer shall executeor cause its supplier to execute, if such supplier has retained processingrights to the gas delivered to Customer, the appropriate agreements prior tothe commencement of service for the transportation and processing of anyliquefiable hydrocarbons and any PVR quantities associated with the processingof gas received by Pipeline at the Point(s) of Receipt under such Customer's serviceagreement. In addition, subject to the execution of appropriate agreements,Pipeline is willing to transport liquids associated with the gas produced andtendered for transportation hereunder. 

ARTICLEVI

 

ADDRESSES

Exceptas herein otherwise provided or as provided in the General Terms and Conditionsof Pipeline's FERC Gas Tariff, any notice, request, demand, statement, bill orpayment provided for in this Service Agreement, or any notice which any partymay desire to give to the other, shall be in writing and shall be considered asduly delivered when mailed by registered, certified, or regular mail to thepost 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 otheraddress as either party shall designate by formal written notice. 

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SERVICEAGREEMENT

FORRATE SCHEDULE FT-1

(Continued)

 

ARTICLEVII

 

ASSIGNMENTS

AnyCompany which shall succeed by purchase, merger, or consolidation to theproperties, substantially as an entirety, of Customer, or of Pipeline, as thecase may be, shall be entitled to the rights and shall be subject to theobligations of its predecessor in title under this Service Agreement; andeither Customer or Pipeline may assign or pledge this Service Agreement underthe provisions of any mortgage, deed of trust, indenture, bank creditagreement, assignment, receivable sale, or similar instrument which it hasexecuted or may execute hereafter; otherwise, neither Customer nor Pipelineshall assign this Service Agreement or any of its rights hereunder unless itfirst shall have obtained the consent thereto in writing of the other; providedfurther, however, that neither Customer nor Pipeline shall be released from itsobligations hereunder without the consent of the other.  In addition, Customer may assign its rightsto capacity pursuant to Section 3.14 of the General Terms and Conditions.  To the extent Customer so desires, when itreleases capacity pursuant to Section 3.14 of the General Terms and Conditions,Customer may require privity between Customer and the Replacement Customer, asfurther provided in the applicable Capacity Release Umbrella Agreement. 

ARTICLEVIII

 

INTERPRETATION

Theinterpretation and performance of this Service Agreement shall be in accordancewith the laws of the State of Texas without recourse to the law governingconflict of laws. 

ThisService Agreement and the obligations of the parties are subject to all presentand future valid laws with respect to the subject matter, State and Federal,and to all valid present and future orders, rules, and regulations of dulyconstituted authorities having jurisdiction. 

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SERVICEAGREEMENT

FORRATE SCHEDULE FT-1

(Continued)

 

ARTICLEIX

 

CANCELLATIONOF PRIOR CONTPACT(S)

ThisService Agreement supersedes and cancels, as of the effective date of thisService Agreement, the contracts between the parties hereto as described below:

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

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

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

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SERVICEAGREEMENT

FORRATE SCHEDULE FT-1

(Continued)

IN WITNESSWHEREOF, the parties hereto have caused this Service Agreement to be signed bytheir respective Presidents, Vice Presidents or other duly authorized agentsand their respective corporate seals to be hereto affixed and attested by theirrespective Secretaries or Assistant Secretaries, the day and year first abovewritten. 

TEXAS EASTERN TRANSMISSION LP 

                        By: /S/ Gregory J. Rizzo

                             Sr.VicePresident Marketing &

                             CapacityMgmt.

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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