Common use of Associated Gas Clause in Contracts

Associated Gas. a. The CONTRACTOR (on its own behalf and on behalf of Range Resources) shall deliver the Associated Gas to the point where it is separated from the Crude Oil. Any costs with respect to such delivery to the STATE, including but not limited to, any increase in the CONTRACTOR’S costs (on its own behalf and on behalf of Range Resources) as a result of such delivery, shall be paid by the STATE. Any Associated Gas that is not taken by the STATE or that is not utilized in the Petroleum Operations, as aforesaid may be treated by the CONTRACTOR (on its own behalf and on behalf of Range Resources) in accordance with good Petroleum Industry Practices. b. Subject to paragraph 27.1, if the STATE considers the possibility of entering into an agreement with any party for the export and sale of the Associated Gas or its delivery to the DEPARTMENT for local consumption (the Project), the DEPARTMENT and the CONTRACTOR shall meet for the purpose of reaching a mutual agreement on the terms and conditions of the Project Agreement. Any such Gas Project Agreement shall be based on the following principles: (i) The STATE’s share in the Project shall not be more than [REDACTED - SENSITIVE BUSINESS INFORMATION] percent. (ii) The CONTRACTOR shall initially bear all costs and expenses related to the Project including those related to the construction and operation of the facilities and shall be reimbursed from the Annual Gas Revenue according to the terms of the Project Agreement. (iii) If an agreement is not reached as contemplated above within Six