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Overview of Sun Devil Pipeline and Transwestern Operational Framework

The Sun Devil Pipeline L.P. collaborates with Transwestern and Northern Border to provide pipeline capacity under an operating lease structure. Transwestern is responsible for managing shipper contracts and operational performance. In the event of a payment default by Transwestern, capacity may be terminated and shippers' contracts reassigned to Sun Devil. Both companies engage in a compression agreement with performance stipulations. Investments target an IRR, ensuring returns for both the General Partner (GP) and Limited Partner (LP) while outlining rights to revenue and contractual obligations.

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Overview of Sun Devil Pipeline and Transwestern Operational Framework

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  1. Sun Devil Pipeline L.P. Transwestern Northern Border (5) 3% GP 97% LP $ (1) Transwestern Sun Devil Pipeline L.P. capacity $ (3) $ (2) Shippers Pipeline O & M Capacity $ (4) compression • Sun Devil provides pipeline capacity to Transwestern on an operating lease basis. Transwestern pledges shippers contracts (2) pending payment default by Transwestern. If Transwestern defaults, capacity is terminated and Sun Devil is assigned shippers contract. Transwestern entitled to cost recovery from rate base. • Shippers contracts- firm periodic payments. Assignable without consent to Sun Devil. • Transwestern provides O & M to Sun Devil. Sun Devil can terminate if TW fails to perform. TW can terminate on payment default by Sun Devil. • Sun Devil uses compression at TW compression stations. Compression contract between TW & Sun Devil cancelable on TW non-performance. TW has to have shippers’ consent to abandon station. FERC operational control issues (?). • 97% NBP LP investment earnings target IRR of [ ]%, 3% TW GP investment earns an excess $ over LP target IRR. If GP fails in duties, LP has right to revenues. GP no longer controls, but earns LP target return. LP appoints itself GP and earns GP return.

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