GATHERING, TRANSPORTATION AND STORAGE

Gathering and Processing Issues 
 

      Gathering is required as part of the process of delivering cost-of-service production from the wellhead to the customers of Questar Gas.  In some natural gas fields, the gathering function is provided by the unit under the prevailing operating agreement.  In other fields, this function must be arranged for separately.  For supplies from many producing areas, processing is also required to ensure conformity with the gas quality specifications of downstream pipelines.  Questar Gas is party to a number of natural gas gathering and processing agreements with mid-stream companies which provide these services.     
 

      Much of the natural gas production that Questar Gas is entitled to under the Wexpro Agreement is dedicated to the System-Wide Gathering Agreement between Questar Gas and Questar Gas Management Company (Gas Management).  The System-Wide Gathering Agreement utilizes a cost-of-service methodology to determine the demand and commodity charges for this service.  This rate determination occurs on an annual basis for service provided each year from September 1 through August 31.  Sixty percent of the annual cost of service is allocated to a reservation charge and the remaining forty percent is allocated to a commodity charge.  The billing