Notice of Termination of Precedent and Service Agreements between Maritimes & Northeast Pipeline Limited Partnership and Anadarko Canada LNG Marketing Corp.

Summary

Maritimes & Northeast Pipeline Limited Partnership has formally notified Anadarko Canada LNG Marketing Corp. of the immediate termination of their Precedent Agreement and Service Agreement, originally signed on June 29, 2005 and amended on May 3, 2006. The termination is due to Anadarko's inability to secure sufficient LNG supply for the Bear Head terminal by the agreed deadline. Maritimes retains interest in future discussions if Anadarko later secures LNG supplies.

EX-10.1 2 h39610bexv10w1.htm NOTICE OF TERMINATION - MARITIMES & NORTHEAST PIPELINE LIMITED PARTNERSHIP AND ANADARKO CANADA LNG MARKETING CORP. exv10w1

Exhibit 10.1


		890 Winter Street Suite 300 Waltham, MA 02451 617 ###-###-####

		Fax: 617 ###-###-####

September 8, 2006


Anadarko Canada LNG Marketing Corp. c/o Anadarko Petroleum Corporation 1201 Lake Robbins Drive The Woodlands, Texas 77380 Attn: Manager, Commercial Development Fax: (832) ###-###-####		Via E-mail and Facsimile

Anadarko Canada LNG Marketing Corp. c/o Anadarko Petroleum Corporation 1201 Lake Robbins Drive The Woodlands, Texas 77380 Attn: Gas Marketing Operations Manager Fax: (832) ###-###-####

Gentlemen:

Re:

Precedent Agreement between Maritimes & Northeast Pipeline Limited Partnership and Anadarko Canada LNG Marketing Corp.

Thank you for your letter of September 1, 2006, in which you provided an update on the status of your LNG supply acquisition. In your letter, you also request a one-year extension of the supply demonstration condition provision under the Precedent Agreement between our two companies.

By way of background, Maritimes & Northeast Pipeline Limited Partnership (“Maritimes”) and Anadarko Canada LNG Marketing Corp. (“Anadarko”) are parties to a (i) Precedent Agreement (“Precedent Agreement”); and (ii) Service Agreement for Toll Schedule MN365 (“Service Agreement”), each of which was made and entered into on June 29, 2005 (collectively, the “Agreements”). The Agreements were amended by that certain letter agreement dated May 3, 2006, between Maritimes and Anadarko (“May 3 Agreement”).

In your September 1, 2006 letter, you explain the continued efforts Anadarko has made to secure supply for the Bear Head LNG terminal. You note the tightness of world LNG supplies and slippage of proposed projects as challenges you have encountered. In addition, your September 1, 2006 letter explains that Anadarko has not reached agreement with an LNG supplier to satisfy the Bear Head LNG receiving terminal throughput requirements.

In the May 3 Agreement, Anadarko and Maritimes agreed to a four-month extension of the expiration date associated with Maritimes’ termination option under Paragraph 10(F) of the Precedent Agreement to no later than September 10, 2006. As you know, under Paragraph 10(F), Maritimes has the right to terminate the Agreements, if Anadarko has failed to demonstrate that it has arranged for an adequate quantity of LNG supplies to support the operation of the Bear Head LNG terminal when considering the primary term of Anadarko’s Service Agreement. In accordance with

September 8, 2006
Page 2

Paragraph 3 of the May 3 Agreement, Maritimes hereby gives written notice of termination of the Agreements, which termination, pursuant to Paragraph 10(F), is effective immediately.

We note in your September 1, 2006 letter that your efforts to obtain LNG supplies for Bear Head remain ongoing. If and when you are successful in securing LNG supplies for Bear Head, we would be interested in discussing transportation service on Maritimes in connection with a future expansion of the system.

Regards,

Douglas P. Bloom
President
Maritimes & Northeast Pipeline Management Ltd.,
General Partner of
Maritimes & Northeast Pipeline Limited Partnership

cc: David Anderson (Anadarko) (fax no. (832) ###-###-####)