MAUI PIPELINE OPERATING CODE - First Gas

1 FINAL OPERATING CODE14 May 2016 Notes:This document is a working version of the maui PIPELINE OPERATING code which incorporates allamendments that are in effect as of 14 May 2016. maui PIPELINE OPERATING CODET able of Contents1. DEFINITIONS AND PIPELINE BALANCING THE TSP TECHNICAL STANDARDS FOR STATIONS AND WELDED DELIVERY OF GAS: TITLE AND AUTHORISED NOMINATIONS AND SCHEDULED SHIPPER OPERATIONAL INCENTIVES MEASUREMENT AND GAS MAINTENANCE OF FEES AND PRUDENTIAL INVOICING AND DISPUTE RECORDS AND ACCESS FORCE LIABILITIES AND MODIFICATIONS TO THIS OPERATING ENTIRE GOVERNING EXCLUSION OF IMPLIED SURVIVAL OF PRIVITY OF CONSUMER GUARANTEES ACT 1 TECHNICAL REQUIREMENTS FOR PHYSICAL WELDED POINTS AND 2 SHIPPER AGREEMENT 3 WELDED PARTY AGREEMENT 4 CONFIDENTIALITY 5 THE TSP IX IT 6 maui PIPELINE PRESSURE 7 MINIMUM 8 PHYSICAL WELDED 9 TP

2 WELDED PARTY SHIPPER 10 TARIFF PIPELINE OPERATING Code14 May 2016page AND : In this OPERATING code : 30 Day Default means a default by a Shipper, a Welded Party or TSP undersection (a) or the continuance of a Force Majeure Event under section (d). Accumulated Excess Operational Imbalance or AEOI means, in relation to aWelded Point:(a)if the Welded Point s Running Operational Imbalance is greater than its positiveRunning Operational Imbalance Limit, then its Running Operational Imbalance minusits positive Running Operational Imbalance Limit; or(b)if the Welded Point s Running Operational Imbalance is less than its negative RunningOperational Imbalance Limit, then its Running Operational Imbalance minus itsnegative Running Operational Imbalance Limit; or(c)zero.

3 Approved Nomination means, for the relevant Day, a Shipper s Nominated Quantity (orpart of it) in respect of a Receipt Point and Delivery Point which, as notified to that Shipperby TSP, has been approved under section or has been amended under sections , with any such amended Approved Nomination replacing the previously ApprovedNomination. AQ Expiry Date means the date agreed by TSP and a Shipper on which that Shipper sAuthorised Quantity expires, as set out in that Shipper s TSA. AQ Fee means the AQ fee as calculated in accordance with section (a). AQ Volume means the number of GJ (which may be zero) specified for an AQ Zone by aShipper in its TSA as amended from time to time.

4 AQ Zone means a section of the maui PIPELINE either:(a)from the Oaonui Welded Point to the inlet of the Mokau compressor station; or(b)from the outlet of the Mokau compressor station to the Rotowaro Welded Point. Authorised Quantity or AQ means an AQ Volume for a specific AQ Zone as set out ineach TSA. Average Market Price means a price per GJ of Gas calculated as set out insection (a). Balancing Action means a Balancing Gas Call or a Balancing Gas Put. Balancing Agent means either:(a)up until the Effective Date, the person appointed to that role by the TSP from time totime; or(b)on and from the Effective Date, FGL in its own right.

5 Balancing Gas means Gas purchased as part of a Balancing Gas Call, or sold as part of aBalancing Gas Put, by TSP. Balancing Gas Call means any transaction where TSP purchases Gas with the objectiveof increasing Line Pack. For the avoidance of doubt, this excludes:(a)any Gas purchased by TSP as part of a Cash-Out Transaction; (b)any Gas purchased from a Shipper pursuant to section (b); and(c)any Fuel Gas PIPELINE OPERATING Code14 May 2016page 1 Balancing Gas (Delivery) Point means a virtual Delivery Point to which a Shipper maynominate Gas purchased in a Balancing Gas Call. Balancing Gas (Receipt) Point means a virtual Receipt Point from which a Shipper maynominate Gas sold in a Balancing Gas Put.

6 Balancing Gas Put means any transaction where TSP sells Gas with the objective ofreducing Line Pack. For the avoidance of doubt, this excludes: (a)any Gas sold by TSP as part of a Cash-Out Transaction; and(b)any Gas sold to a Shipper pursuant to section (a). Balancing Platform means an electronic platform used for the short-term trading of Gas,upon which TSP has both bidding and offering trading rights and on which TSP iscounterparty to all trades. Bank means a New Zealand registered bank with which TSP holds the Trust Account inaccordance with section 20. BGIX means a balancing gas information platform that displays information related toMaui PIPELINE balancing.

7 Its homepage shall be located at, or identified and linked to on, or such other website as may be notified by TSP to each Partyfrom time to time. Bill Rate means, on any Business Day, the average (determined by TSP and rounded upto the nearest fifth decimal place) of the individual bid rates, expressed as a percentage perannum, quoted by entities (each a bank ) on the Reuters Screen Pages BKBL and BKBM (or such other pages as may replace those pages on that service for displaying quotationsfor bank bills of exchange having a tenor of three Months) at or about on therelevant Business Day for bills of exchange having a tenor of three Months which have beendrawn, accepted or endorsed by such banks and for each non-Business Day, the Bill Rate onthe most recent Business Day.

8 Business Day means a Day other than a Saturday, Sunday or public holiday on whichregistered banks are open for business in Auckland and Wellington. Cash Deposit means a cash deposit (or a transfer or grant of security over equivalentassets as agreed by TSP and the Shipper). Cash-Out Buy Price for a Day means a price per GJ of Gas calculated as set out insection (i). Cash-Out Quantity means, for a Welded Point with an AEOI other than zero for a Day, aquantity of Gas calculated for and as at the end of that Day according to one of the followingformulas, as appropriate:(a)if the Welded Point has an AEOI greater than zero for that Day:ROI - ( m x pROIL )or(b)if the Welded Point has an AEOI less than zero for that Day:- ( ROI - ( m x nROIL ) )where:(i)ROI is the Running Operational Imbalance;(ii)m is the ROIL Multiplier;(iii)pROIL is the positive Running Operational Imbalance Limit.

9 And(iv)nROIL is the negative Running Operational Imbalance Limit, maui PIPELINE OPERATING Code14 May 2016page 2for that Welded Point for that Day, provided that if the quantity resulting from the calculation(under (a) or (b), as the case may be) is less than zero then it shall be deemed to be equalto zero. Cash-Out Sell Price for a Day means a price per GJ of Gas calculated as set out insection (h). Cash-Out Trading Fee Price means, with respect to a Cash-Out Transaction, an amountthat is equal to the unweighted mean value of all categories of trading fees per GJ posted byeligible Trading Platforms on their websites (or provided to TSP) at midday on the Day priorto the Cash-Out Transaction.

10 Cash-Out Transaction means:(a)the purchase of a Cash-Out Quantity from a Welded Party pursuant to section ;or(b)the sale of a Cash-Out Quantity to a Welded Party pursuant to section Cash-Out Transmission Price means, with respect to a Cash-Out Transaction, anamount that is equal to the cost per GJ that a Shipper with an AQ Volume of zero wouldhave incurred (under section ) for transportation of Gas between the relevant WeldedPoint and the Payback Point on the relevant Day. Category A Nomination means a Nominated Quantity to the extent that it is within aShipper s AQ. Category B Nomination means any part of a Nominated Quantity that is not either aCategory A Nomination or a Nominated Quantity of Balancing Gas.