Clajon Gas Co., L.P., Aquila Gas Pipeline Corp., Tax Matters Partner - Page 5

                                        - 5 -                                         
          plants, and the Mentone Pipeline System, Gomez Pipeline System,             
          Maverick County Pipeline System, Rhoda Walker Pipeline System,              
          and Panola County Pipeline System, which gathered gas containing            
          little or no NGLs (termed “lean gas”) for delivery to purchasers’           
          transmission pipelines.  The Panola and Rhoda Walker Systems                
          provided compression and dehydration services.  The Gomez and               
          Mentone Systems provided dehydration services.                              
               The Texas gathering systems included more than 1,100 miles             
          of feeder, lateral, and trunk lines.  Clajon, via the Texas                 
          gathering systems, purchased and transported gas from 190 third-            
          party gas producers and more than 1,000 wells.                              
               Clajon did not own any oil or natural gas reserves and did             
          not own an economic interest in any well connected to the Texas             
          gathering systems.                                                          
          Clajon’s Contractual Relationships                                          
               During the audit years, gas flowed through the Texas                   
          gathering systems under the following types of contracts:                   
          wellhead purchase contracts, gas processing contracts, and gas              
          transportation contracts.                                                   
               Under a wellhead purchase contract, Clajon purchases a                 
          producer’s gas at a meter located at the producer’s well.  The              
          price may be fixed, or it may be calculated based upon the price            
          received by Clajon for residue gas at the tailgate of the gas               
          processing plant.                                                           

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011