Exhibit 10.17
"Pages where confidential treatment has been requested are marked 'Confidential
Treatment Requested.' The redacted material has been separately filed with the
Commission, and the appropriate section has been marked at the appropriate
place and in the margin with a star (*)."
FRACTIONATION AGREEMENT
by and between
CEDAR BAYOU FRACTIONATORS, L.P.
and
AMOCO OIL COMPANY.
EFFECTIVE JANUARY 1, 1998
TABLE OF CONTENTS
Page
----
ARTICLE I: DEFINITIONS ................................................... 1
ARTICLE II: TERM ......................................................... 4
ARTICLE III: AMOCO'S PERFORMANCE ......................................... 4
ARTICLE IV: CBF'S PERFORMANCE ............................................ 5
ARTICLE V: TRANSFER OF CUSTODY ........................................... 7
ARTICLE VI: MEASUREMENT .................................................. 7
ARTICLE VII: COMPENSATION TO CBF ......................................... 7
ARTICLE VIII: TAXES AND OTHER PAYMENTS ................................... 9
ARTICLE IX: ACCOUNTING AND AUDIT PROCEDURES .............................. 9
ARTICLE X: BILLING AND PAYMENT ........................................... 10
ARTICLE XI: FORCE MAJEURE ................................................ 11
ARTICLE XII: INDEMNIFICATION AND LIMITATION OF LIABILITY ................. 12
ARTICLE XIII: DISPUTE RESOLUTION ......................................... 13
ARTICLE XIV: MISCELLANEOUS ............................................... 16
EXHIBIT "A" - AMOCO'S DEDICATED PLANTS
EXHIBIT "B" - SPECIFICATION PRODUCTS SPECIFICATIONS
FRACTIONATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 1st
Day of January, 1998, by and between, Cedar Bayou Fractionators, L.P., a
Delaware limited partnership (hereinafter referred to as "CBF"), and Amoco
Oil Company, a Delaware corporation (hereinafter referred to as "Amoco"),
sometimes also referred to individually as "Party" and collectively as
"Parties."
WITNESSETH:
WHEREAS, Amoco owns, controls or has rights to certain volumes of
natural gas liquids recovered by various natural gas processing facilities
available for fractionation; and
WHEREAS, CBF owns a Fractionation Facility, hereinafter defined,
situated in Mont Belvieu, ▇▇▇▇▇▇▇▇ County,
Texas; and
WHEREAS, Amoco has arranged for the transportation and delivery of such
Raw Product, hereinafter defined, and/or Butane-Gasoline Mix, hereinafter
defined, to Mont Belvieu,
Texas; and
WHEREAS, CBF has arranged for the receipt of such Raw Product and/or
Butane-Gasoline Mix from Amoco, as well as Raw Product and/or Butane-Gasoline
Mix owned by third parties, at the Delivery Point, hereinafter defined; and
WHEREAS, it is the mutual desire of CBF and Amoco that CBF receive
Amoco's Raw Product at the Delivery Point and redeliver to Amoco, or its
designee, Specification Products, hereinafter defined, at the Storage
Facility, hereinafter defined, or at other mutually agreeable locations.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
ARTICLE I: DEFINITIONS
When the following terms or expressions are used in this Agreement, they
shall have the meanings defined below:
"AFFILIATE" shall mean a Person that directly or indirectly through one or
more intermediates, controls, or is controlled by or is under common
control with the Person specified. The term "control" (including the terms
"controlled by" or "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership, by
contract, or otherwise. Any Person shall be deemed to be an Affiliate of
1
any specified Person if such Person owns 50% or more of the voting
securities of the specified Person, if the specified Person owns fifty
percent (50%) or more of the voting securities of the specified Person, if
the specified Person owns fifty percent (50%) or more of the voting
securities of such Person, or if fifty percent (50%) or more of the voting
securities of the specified Person and such Person are under common
control.
"BACK-END MIX" shall mean any mixture of Components which will be
fractionated by the Fractionation Facility without requiring the use of the
Fractionator's de-ethanizer.
"BACK-END FEE" shall have the meaning as ascribed to it in Article VII.
"BARREL" shall mean 42 Gallons.
"BASE RATE" shall have the meaning as ascribed to in it Article X.
"BUSINESS DAY" shall mean a Day on which Federal Reserve member banks in
New York City are open for business.
"CLAIMS" shall have the meaning as ascribed to in Section 12.1 hereinafter.
"COMPONENT" shall mean the individual hydrocarbon constituents of Raw
Product, including but not limited to: methane, ethane, propane, isobutane,
normal butane, isopentane, normal pentane, hexanes and heavier, as well as
other non-hydrocarbon Components allowed by Pipeline.
"DAY" OR "DAILY" shall mean a twenty-four (24) hour period commencing 7:00
a.m. Central Standard or Daylight Savings time, as applicable, and
extending until 7:00 a.m. Central Standard or Daylight Savings time, as
applicable, on the following Day.
"DELIVERY POINT" shall mean the point of interconnection between the
Pipelines and Storage Facility at which point Amoco's Raw Product is
delivered to CBF through the Storage Facility.
"FEE RE-DETERMINATION ARBITRATION" shall have the meaning set forth in
Section 13.5.
"FINAL OFFERS" shall mean final offers made by the Parties prior to
submission of a monetary dispute to an arbitrator, in the manner specified
in Section 13.7.
"FORCE MAJEURE" shall have the meaning as ascribed to it in Article XI.
"FRACTIONATION FACILITY" OR "FRACTIONATOR" shall mean the fractionation
unit owned by CBF situated in the vicinity of Mont Belvieu, ▇▇▇▇▇▇▇▇
County,
Texas, which is operated by ▇▇▇▇▇▇ which fractionation unit is used
for the purpose of fractionating Raw Product streams into Specification
Products.
2
"GALLON" shall mean the unit of volume used for the purpose of measurement
of liquid. One U. S. liquid Gallon contains 231 cubic inches when the
liquid is at a temperature of 60 degrees Fahrenheit and at the vapor
pressure of the liquid being measured.
"▇▇▇▇ COMMITMENT" shall mean that volume of Raw Product committed by Amoco
to ▇▇▇▇ Hydrocarbons Company ("▇▇▇▇") under an agreement effective July 1,
1997.
"MONT BELVIEU AREA" shall mean the geographical area surrounding Mont
Belvieu,
Texas including the following
Texas counties:
Brazoria ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Jefferson
Fort Bend Liberty
Galveston ▇▇▇▇▇▇▇▇▇▇
However, the following facilities shall be excluded from the Mont Belvieu
Area:
Amoco's refinery and chemical plant in the vicinity of
Texas City,
Texas
Amoco's chemical plant in the vicinity of Alvin,
Texas
Amoco's chemical plant in the vicinity of Pasadena,
Texas
Amoco's chemical plant in the vicinity of Mont Belvieu,
Texas
"MONTH" OR "MONTHS" OR "MONTHLY" shall mean the period commencing on the
first Day of a Month and ending on the first Day of the next succeeding
Month.
"PIPELINE(S)" shall mean any pipeline which delivers Amoco's Raw Product to
the Storage Facility. Currently, the four (4) pipelines capable of
delivering such Raw Product are the Seminole Pipeline, the Chaparral
Pipeline, the West Texas Pipeline, and Black Lake Pipeline. During 1998,
CBF desires to connect to the ▇▇▇▇ Pipeline which is owned and operated by
Duke Energy.
"PRIMARY TERM" shall have the meaning as ascribed to it in Article II.
"RAW PRODUCT" shall mean that mixture of liquid hydrocarbons delivered by
Pipelines to the Storage Facility in accordance with the terms of any
connection agreements or pipeline tariffs in effect from time to time.
"REDELIVERY POINT" shall mean the Storage Facility owned and operated by
▇▇▇▇▇▇.
"SPECIFICATION PRODUCT(S)" shall mean the liquid hydrocarbons meeting the
specifications provided for in Exhibit "B", attached hereto, fractionated
from the Raw Product.
"STORAGE FACILITY" shall mean the underground storage facilities owned and
operated by
3
'Confidential Treatment Requested'
▇▇▇▇▇▇ at or near Mont Belvieu, ▇▇▇▇▇▇▇▇ County, Texas, including, but not
limited to, all storage caverns, related surface and subsurface equipment,
and loading and unloading terminals.
"▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ Petroleum Company, Limited Partnership.
"YEAR" OR "YEARLY" shall mean a period of 365 consecutive Days; provided,
however that any Year which contains the date of February 29 shall consist
of 366 consecutive Days.
"Y-GRADE" shall mean any Raw Product which will be fractionated by CBF's
fractionation facility other than Back-End Mixes.
"Y-GRADE FEE" shall have the meaning as ascribed to it in Article VII.
ARTICLE II: TERM
This Agreement shall have a primary term commencing on January 1, 1998 and
* ending [REDACTED] (the "Primary Term") and shall continue in effect from Year
to Year thereafter; provided that either Party shall have the right to
terminate this Agreement effective at the end of the Primary Term or any
Yearly anniversary thereafter by giving the other Party at least twelve
Months prior written notice.
ARTICLE III: AMOCO'S PERFORMANCE
3.1 Except as set-forth in Section 3.2, Amoco shall deliver or cause to be
delivered to the Delivery Point for fractionation under the terms of the
Agreement, the Raw Product which it owns and/or controls and which are
produced from the dedicated plants listed in Exhibit "A", and which are
delivered to the Mont Belvieu Area. Such Raw Product shall include both
Y-Grade and Back-End Mixes. Volumes of Raw Product from the dedicated
plants listed in Exhibit "A" but which are currently subject to the ▇▇▇▇
Commitment will be delivered to CBF following the termination of that
commitment. Amoco further agrees that for any volumes of Y-Grade or
Back-end Mixes that Amoco may now or in the future have available from
plants that are not listed in Exhibit "A" and that are delivered to the
Mont Belvieu Area and that can economically be delivered and fractionated
at CBF versus alternative opportunities, that Amoco will offer such volumes
to become dedicated to CBF and that if CBF accepts same, then such volumes
shall become dedicated under the terms of this Agreement.
3.2 The following volumes shall be excepted from the dedication set-forth in
Section 3.1 above.
(1) Amoco volumes which are dedicated under the ▇▇▇▇ Commitment shall not
be
4
'Confidential Treatment Requested'
dedicated to CBF until July 1, 1998.
(2) Amoco volumes which are delivered to the Mont Belvieu Area via Duke
Energy's pipeline, which moves Raw Product from the Matagorda County,
Texas to Mont Belvieu, Texas (formerly referred to as the ▇▇▇▇
Pipeline) shall not be dedicated until the following conditions are
met.
(a) A pipeline connection is operational that will allow deliveries
from the Duke Energy pipeline to CBF's fractionation facility.
(b) The Amoco volume on said pipeline is not dedicated under any
third-party agreement that is in existence at the time that item
(a) occurs.
(3) Volumes from Amoco's Old Ocean Plant located in Brazoria Country,
Texas.
(4) Volumes from Apache's Hastings Plant located in Brazoria Country,
Texas.
(5) Volumes from Exxon's Katy Plant located in ▇▇▇▇▇▇ County, Texas.
(6) Any Amoco volumes which CBF does not commit to accept under the
provisions of Article IV of this Agreement.
3.3 Amoco shall direct Pipeline to prepare, during each Month, an allocation of
ownership of the Pipeline's commingled Raw Product, by Components actually
delivered to CBF. Amoco and CBF are to accept and rely on such allocation.
3.4 Prior to the beginning of each Month, CBF will estimate the volumes of
Specification Products for which disposition instructions will be required
from Amoco. Such estimates will be established by utilizing the actual
volumes of Raw Product delivered to the Fractionation Facility during the
most recent Month for which actual volumes are available and adjusting for
anticipated variances as may be advised by Amoco from time to time. As set
forth in Article IX of this Agreement, Amoco and CBF shall exchange and
reconcile Monthly statements detailing Amoco's product movement no later
than the last Day of each succeeding Month following the Month in question.
3.5 Amoco is procuring the fractionation services under this Agreement for the
purpose of fractionating Raw Product and not for the purpose of reselling
such services and agrees not to so resell said services.
ARTICLE IV: CBF'S PERFORMANCE
4.1 CBF shall accept delivery of and provide fractionation for a maximum of
* [REDACTED] Barrels per Day of Amoco's Y-Grade and [REDACTED] Barrels per
Day of Back-End Mixes as determined on a Monthly average basis. Volumes
above these amounts will be accepted by CBF for fractionation on a space
available basis.
5
4.2 CBF shall deliver Specification Products to Amoco or its designee at the
Storage Facility or at other mutually agreed upon locations. CBF will
redeliver Specification Products during the same Month in which the Raw
Product containing such Components is delivered to CBF, so long as Pipeline
deliveries allow for fractionation of said Raw Product at a rate
approximating the Daily average Pipeline delivery rate for said Month.
4.3 CBF shall not routinely hold back Specification Products from Amoco as a
minimum inventory requirement. However, CBF shall have the right to
withhold distribution of Amoco's Specification Products, on a CBF ownership
percentage basis, to the extent that CBF has insufficient volumes of
Specification Products to meet its obligations to its fractionation
customers. To determine Amoco's ownership percentage in CBF, the combined
ownership percentage of both Amoco MB Fractionation Company (a partner in
CBF) and Amoco MBF Company (a partner in DEVCO) shall be considered.
4.4 The quantity of the five Specification Products due Amoco will be as
follows, based on the Pipelines' reported volumes of each Component which
have been delivered for Amoco's account:
(1) EP MIX (80/20): the volume will be equal to (a) 100% of the ethane
Component plus methane Component up to 1.5 liquid volume percent of
the ethane Component, (b) plus propane Component equal to 25% of the
volume in (a) above.
(2) PROPANE: the volume will be equal to 100% of the propane Component
minus the propane use for the EP Mix.
(3) ISOBUTANE: the volume will be equal to 100% of the isobutane
Component.
(4) NORMAL BUTANE: the volume will be equal to 100% of the normal butane
Component.
(5) NATURAL GASOLINE: the volume will be equal to 100% of the isopentane
and heavier Components.
4.5 In the event CBF actually produces purity ethane utilizing its existing
facilities (as of January 1, 1998), then Amoco reserves the right to
receive a prorated share of its ethane as purity ethane. The maximum
Monthly volume of purity ethane that Amoco may elect to receive would be
calculated as follows:
AE = [AEY/TEY] x E
Where:
AE = Amoco's prorated share of purity ethane
AEY = the ethane Component of Amoco's delivered Y-Grade during the
6
'Confidential Treatment Requested'
calendar Month
TEY = the total amount of ethane Component in Y-Grade delivered to the
Fractionator for fractionation services during the Calendar Month
E = the volume of purity ethane produced by CBF during the calendar Month
ARTICLE V: TRANSFER OF CUSTODY
Amoco warrants that it has the right to cause the Raw Product to be
fractionated. Custody of the Raw Product shall transfer to CBF at the Delivery
Points, subject to Amoco's right, pursuant to Section 4.2 above, to receive
allocated Gallons of Specification Products at the Storage Facility. Custody of
Specification Products shall be delivered to Amoco or its designee. CBF shall at
no time take title to the Raw Product or the resulting Specification Products
while such products are in the custody of CBF.
ARTICLE VI: MEASUREMENT
6.1 Volumes of Raw Product, shall be measured and calculated in accordance with
the then current Pipeline tariff or CBF's Pipeline connection agreements.
CBF shall furnish Amoco with current copies of all Pipeline connection
agreements and any future modifications to such agreements.
6.2 Volumes of Specification Products delivered by CBF in accordance with
Article IV, shall be measured and calculated in accordance with CBF's
standard measurement procedures at Mont Belvieu and shall conform to good
measurement practices in the industry and the then current API Manual of
Petroleum Measurement Standards. CBF shall furnish Amoco with the current
copies of all standard measurement procedures for Mont Belvieu and any
future modifications to such procedures.
ARTICLE VII: COMPENSATION TO CBF
7.1 Subject to Article VIII, as full consideration for the fractionation
services provided hereunder, Amoco shall pay to CBF a fractionation fee for
each Gallon of Y-Grade ("Y-Grade Fee") or Back-End Mixes ("Back-End Fee")
delivered by, or on behalf of, Amoco to CBF each Month. Such fees shall be
determined on a calendar quarter basis by the following formulas:
* Y-Grade Fee = [REDACTED]
and
7
'Confidential Treatment Requested'
* Back-End-Fee = [REDACTED]
Where:
FUEL = The fuel cost (in $/MMBtu) equivalent to the Houston Ship
Channel Index of INSIDE FERC'S GAS MARKET REPORT, for natural
gas (large packages) for the preceding calendar quarter
* plus [REDACTED] per MMBTU.
ELEC = The combined average cost of purchased electricity (in
CENTS/KWH) at the Fractionator for the preceding calendar
quarter.
CPIU = The combined average Consumer Price Index, as published by
the United States Department of Labor, for the preceding
calendar quarter.
7.2 The above fee formulas shall remain in effect during the first five Years
of the Primary Term unless CBF implements a significant energy reduction
project similar to that contemplated by ▇▇▇▇▇▇ and Amoco in December of
1997. If such project is implemented and significant energy consumption
efficiencies are realized due to same, then CBF and Amoco will mutually
agree upon a new formula to become effective with the start of the first
Month that follows the start-up of said project by 60 Days. Such new
formula should initially reflect the same resulting fees as the above
formulas, but will utilize new factors as are appropriate to be changed to
reflect the change in energy consumption patterns at the Fractionator,
provided that the definition of "FUEL," "ELEC" and "CPIU" above shall not
change.
7.3 Either Party shall have the right to initiate a renegotiation of either or
both of the above fees and fee formulas to be effective on any or each of
* the [REDACTED] of the Effective Date (the "Price Change Dates") by giving
the other Party at least ninety (90) Days and no more than one hundred
fifty (150) Days notice prior to any of the Price Change Dates. Such
negotiations shall commence immediately upon the date of receipt of such
notice by the other Party and continue for at least sixty (60) Days
thereafter (the "Negotiation Period"). During the Negotiation Period, each
Party shall submit to the other Party one or more written offers for the
new fee or fees. If CBF and Amoco are unable to agree to the new fee or
fees by the end of the Negotiation Period, either CBF or Amoco shall have
the right to have the new fee or fees re-determined by initiating Fee
Re-Determination Arbitration pursuant to Sections 13.5 through 13.10,
provided that in arbitrating such fee re-determinations, the arbitrator's
choice shall be based on a determination of which of the Parties' Final
Offers most closely approximates the then current fair market rate for the
fractionation and other services provided by CBF hereunder, based on a
five Year term for volumes and composition of Raw Product similar
8
to that then being tendered hereunder by Amoco, and with the market area
for comparison being the Mont Belvieu Area.
ARTICLE VIII: TAXES AND OTHER PAYMENTS
Amoco shall be responsible for the payment of any royalties, overriding
royalties, and other payments due or to become due on the Raw Products or the
Specification Products which are subject to this Agreement. Any tax applicable
to the Raw Products or the Specification Products or the services provided by
CBF hereunder, including but not limited to any tax applicable to stored volumes
of Specification Products, shall be borne and paid by Amoco unless such tax is
by law imposed upon CBF, in which event, such tax shall be paid by CBF and
charged to Amoco and reimbursed by Amoco. Amoco shall indemnify and hold CBF and
their respective Affiliate's directors, officers, agents and employees harmless
from and against any and all claims, demands or causes of action of any kind,
together with all loss, damage and expense (including court costs and attorney's
fees) arising with respect to the payment of any taxes, royalties, overriding
royalties and other payments due or to become due on the services, Raw Products
or Specification Products which are subject to this Agreement.
ARTICLE IX: ACCOUNTING AND AUDIT PROCEDURES
9.1 Amoco or its designee shall furnish the following reports to CBF: (i)
Amoco's share of Components in the Raw Product delivered each Month for the
Month in question by the tenth Day of the next succeeding Month; (ii)
instructions for delivery of Specification Products for the Month in
question during the Month in question, as set forth in Section 3.4; and
(iii) twelve (12) Month forecast of Raw Product projected to be delivered
under this Agreement, as requested by CBF from time to time.
9.2 CBF shall furnish each Month for the preceding Month, the following reports
to Amoco: (i) volumes of Amoco's Specification Products attributable to the
Raw Product delivered to CBF each Month, in accordance with the
reconciliation described in Section 3.4; (ii) Specification Products
volumes delivered to Amoco or its designee each Month in accordance with
the reconciliation described in Section 3.4; and (iii) Amoco's inventories
of Specification Product(s) each Month, in accordance with the
reconciliation described in Section 3.4. CBF shall furnish initial reports
of these items by the twentieth Day of the Month succeeding the Month and
shall fully complete volume and money reconciliations as described in
Section 9.3 below.
9.3 Volume and money reconciliation shall be prepared by Amoco and by CBF on a
Monthly basis. Amoco and CBF shall cooperate to identify and reconcile
volume balances and amounts owed. As each Party completes each Month's
reconciliation, a copy of the reconciliation shall be sent to the other
Party but no later than the last Day of the Month succeeding the Month in
question.
9.4 All invoices or statements issued by CBF and any volume and money
reconciliation reports, or balancing reports, during any calendar Year
shall conclusively be presumed to be true
9
and correct after twenty-four (24) Months following the end of any such
calendar Year, unless within the said twenty-four (24) Month period the
other Party takes written exception thereto and makes claim on the Party
issuing the invoice, statement or report for adjustment.
9.5 Amoco, upon at least thirty (30) Days prior notice in writing to CBF, shall
have the right to audit the CBF's records pertaining to performance under
this Agreement, for any calendar Year within the twenty-four (24) Month
period following the end of such calendar Year; provided, however, the
making of ail audit shall not extend the time for the taking of written
exception to and the adjustments provided for in Section 9.4. Amoco shall
make every reasonable effort to conduct an audit in a manner which will
result in a minimum of inconvenience to CBF. CBF shall bear no portion of
the Amoco's audit cost. An audit shall not be conducted more than once each
Year. CBF shall reply in writing to an audit report within 180 Days after
receipt of such report. Should Amoco and CBF fail or be unable to resolve
any audit disputes, the matter shall be resolved using the dispute
resolution procedures set forth in Article 13 of this Agreement.
9.6 CBF shall retain all financial and volume records for a minimum of
forty-eight (48) Months following the end of any calendar Year.
ARTICLE X: BILLING AND PAYMENT
After receiving allocation information from Pipeline each Month, CBF shall
furnish Monthly to Amoco an invoice reflecting all applicable fees and charges
due and Amoco shall pay to CBF the amounts due no later than (i) ten (10) Days
after Amoco's receipt of invoice therefor, if the amount of same is fifty
thousand dollars ($50,000) or more or (ii) fifteen (15) Days after receipt of
invoice therefor, if the amount of same is less than fifty thousand dollars
($50,000). If the Day on which any payment is due is not a Business Day, then
the relevant payment shall be due upon the immediately preceding Business Day,
except if such payment due date is a Sunday or Monday, then the relevant payment
shall be due upon the immediately succeeding Business Day. Any amounts which
remain due and owing after the due date shall bear interest thereon at the lower
of the United States Treasury 90-Day T-▇▇▇▇ interest rate, as published in the
Wall Street Journal on the first Day such rate is quoted at the beginning of
each calendar quarter, plus thirteen (13%), or the maximum lawful rate of
interest (the "Base Rate"). If a good faith dispute arises as to the amount
payable in any statement, the amount not in dispute shall be paid. if Amoco
elects to withhold any payment otherwise due as a consequence of a good faith
dispute, Amoco shall provide CBF with written notice of its reasons for
withholding payment, and, if the amount of such invoice is equal to or greater
than five thousand dollars ($5,000) or the total aggregate amount of all
invoices in which Amoco has withheld payment and is outstanding at any time is
greater than or equal to twenty five thousand dollars ($25,000), Amoco shall
simultaneously place the disputed amount into an escrow account at a mutually
acceptable commercial bank, pending resolution of the dispute. Amoco's election
to withhold payment from CBF and escrow same as provided herein shall be
exercised within thirty (30) Days from Amoco's
10
receipt of the invoice giving rise to such good faith dispute. After the thirty
(30) Day period, Amoco shall be required to pay CBF the full amount of the
invoice whether or not there is a good faith dispute as to the amount payable.
If it is subsequently determined, whether by mutual agreement of the Parties or
otherwise, that (i) Amoco is required to pay all or any portion of the disputed
amounts to CBF or (ii) Amoco is entitled to reimbursement for an invoice it
paid, in addition to paying such amounts, the Party making such payment also
shall pay interest accrued on such amounts at the Base Rate from (1) the
original due date until paid in full, if Amoco is required to pay, or (2) the
date Amoco paid the disputed invoice until paid in full, if CBF is required to
pay.
ARTICLE XI: FORCE MAJEURE
11.1 In the event either Party hereto is rendered unable, wholly or in part, by
reason of Force Majeure to carry out its obligations under this Agreement,
upon such Party's giving notice and reasonably full particulars of such
Force Majeure in writing to the other Party after the occurrence of the
cause relied on, then the obligations of such Party, other than the
obligation to pay money due hereunder, insofar and only insofar as they are
affected by such Force Majeure, shall be suspended during the continuance
of any inability so caused, but for no longer period; and such cause shall,
so far as reasonably possible, be remedied with all reasonable dispatch.
11.2 The term "Force Majeure" shall mean acts of God, strikes, lockouts or other
industrial disputes or disturbances, acts of the public enemy, wars,
blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, tornadoes, hurricanes, storms, and warnings for any of
the foregoing which may necessitate the precautionary shut-down of ▇▇▇▇▇,
plants, pipelines, gathering systems, loading facilities, terminals, the
Fractionator or any portion thereof, or other related facilities, floods,
washouts, arrests and restraints of governments (either federal, state,
civil or military), civil disturbances, explosions, sabotage, breakage or
accidents to equipment, machinery, plants, the Fractionator or any portion
thereof, or lines of pipe, the lack or failure of brine or brine handling
capacity, the making of repairs or alterations to any of the foregoing,
inability to secure labor or materials, freezing of equipment, machinery,
plants, the Fractionator or any portion thereof, or lines of pipe, partial
or entire failure of ▇▇▇▇▇ or gas supply, electric power shortages,
necessity for compliance with any court order, or any law, statute,
ordinance, rule, regulation or order promulgated by a governmental
authority having or asserting jurisdiction, inclement weather that
necessitates extraordinary measures and expense to construct facilities
and/or maintain operations, or any other causes, whether of the kind
enumerated herein or otherwise, which are not within the control of the
Party claiming suspension and which by the exercise of due diligence such
Party is unable to prevent or overcome. Such term shall likewise include,
in those instances where either Party hereto is required to obtain
servitudes, rights-of-way, grants, permits or licenses to enable such Party
to fulfill its obligations hereunder, the inability of such Party to
acquire, or delays on the part of such Party in acquiring, at reasonable
cost and after the exercise of reasonable diligence, such servitudes,
rights-of-way grants, permits or licenses, and in those instances where
either Party hereto is required to furnish materials and supplies for the
purpose of
11
constructing or maintaining facilities to enable such Party to fulfill its
obligations hereunder, the inability of such Party to acquire, or delays on
the part of such Party in acquiring, at reasonable cost and after the
exercise of reasonable diligence, such materials and supplies. The term
"Force Majeure" shall also include any event of force majeure occurring
with respect to the facilities or services of either Party's suppliers or
customers providing a service or providing any equipment, goods, supplies
or other items necessary to the performance of such Party's obligations,
and shall also include curtailment or interruption of deliveries or
services by such third-party suppliers or customers as a result of an event
defined as Force Majeure hereunder.
11.3 Notwithstanding Section 11.1 above, it is understood and agreed that the
settlement of strikes or lockouts shall be entirely within the discretion
of the Party having the difficulty, and that the above requirement that any
Force Majeure shall be remedied with all reasonable dispatch shall not
require the settlement of strikes or lockouts by acceding to the demands of
the opposing Party when such course is inadvisable in the discretion of the
Party having the difficulty.
ARTICLE XII: INDEMNIFICATION AND LIMITATION OF LIABILITY
12.1. AMOCO'S INDEMNITIES: REGARDLESS OF THE PRESENCE OR ABSENCE OF ANY
INSURANCE COVERAGE MAINTAINED BY EITHER PARTY HERETO, AMOCO HEREBY
RELEASES, AND AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS, CBF,
ITS OPERATOR, PARTNERS AND ITS PARTNERS' AFFILIATES AND THOSE ENTITIES'
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES
("AMOCO INDEMNIFIED PARTIES") FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS,
CAUSES OF ACTION, LIABILITY, LOSS, DAMAGE, PENALTIES, FINES, COST AND
EXPENSE, INCLUDING COURT COSTS AND ATTORNEY'S FEES IN CONNECTION THEREWITH
("CLAIMS"), ARISING OUT OF OR RELATED TO:
(1) DESTRUCTION, LOSS OR CONTAMINATION OF AMOCO'S RAW PRODUCT AND
SPECIFICATION PRODUCTS, EVEN WHERE LIABILITY WITHOUT FAULT WOULD
OTHERWISE BE IMPOSED ON CBF AND REGARDLESS OF THE CAUSE OF SUCH LOSS,
INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE OF ANY OF THE AMOCO
INDEMNIFIED PARTIES, IT BEING UNDERSTOOD AND AGREED THAT AMOCO SHALL
RETAIN ALL RISK OF LOSS WITH REGARD TO AMOCO'S RAW PRODUCT AND
ATTRIBUTABLE SPECIFICATION PRODUCTS, EVEN WHEN SAME IS IN CBF'S
POSSESSION DURING THE PROVIDING OF SERVICES HEREUNDER; and
(2) Except as to Claims within the scope of Sections 12.1.(1) above, any
Claims arising from injuries or damages to the persons or properties
arising from damages
12
to the tangible physical property in connection with Amoco's, or its
contractors, handling and possession of Amoco's Raw Product or
Specifications Products prior to delivery of same to CBF and after
delivery of same from CBF back to Amoco or its designated
representative to the extent of Amoco's or its contractor's negligence
or legal fault for same.
12.2 CBF INDEMNITIES: Regardless of the presence or absence of any insurance
coverage maintained by either party hereto, CBF hereby releases, and agrees
to defend, protect, indemnify and hold harmless, Amoco, and its affiliates,
and agents and those entities' respective directors, officers, employees,
agents and representatives ("CBF Indemnified Parties") from and against any
and all claims, demands, causes of action, liability, loss, damage,
penalties, fines, cost and expense, including court costs and attorney's
fees in connection therewith ("Claims"), arising from injuries or damages
to the persons or properties arising from damages to the tangible physical
property in connection with CBF's, or its contractors, handling and
possession of Amoco's Raw Product or Specifications Products while same are
in CBF's possession and prior to delivery of same to Amoco at the Storage
Facility to the extent of CBF's or its contractor's negligence or legal
fault for same.
12.3 LIMITATION OF LIABILITY: NEITHER CBF, CBF'S OPERATOR OR AMOCO SHALL BE
RESPONSIBLE OR LIABLE TO THE OTHERS, OR TO THEIR AGENTS, FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT
OR ANY BREACH HEREOF, REGARDLESS OF THE CAUSES OF SAME, INCLUDING WHERE
CAUSED, BY THE NEGLIGENCE OR FAULT OF THE PARTY WHOSE LIABILITY IS LIMITED
HEREBY.
ARTICLE XIII: DISPUTE RESOLUTION
13.1 COVERED DISPUTES - Any dispute, controversy or claim (whether sounding in
contract, tort or otherwise) arising out of or relating to this Agreement,
including, without limitation, the meaning of its provisions, or the proper
performance of any of its terms by either Party, its breach, termination or
invalidity ("Dispute") will be resolved in accordance with the procedures
specified in this Section, which will be the sole and exclusive procedure
for the resolution of any such Dispute, except that a Party, without
prejudice to the following procedures, may file a complaint to seek
preliminary injunctive or other provisional judicial relief, if in its sole
judgment, that action is necessary to avoid irreparable damage or to
preserve the status quo. Despite the filing of any such injunctive or other
provisional judicial relief, the Parties will continue, subject to
Subsection 13.10 below, to participate in the applicable procedures
specified in this Section. The obligation to participate in such applicable
procedures shall not require either Party to participate in the negotiation
between executives procedures set forth in Subsection 13.3 below or the
mediation procedures set forth in Subsection 13.4 below if either Party
determines, in its sole discretion, that such procedures would be futile.
13
13.2 INITIATION OF PROCEDURES. Either Party desiring to initiate the dispute
resolution procedures set forth in this Section with respect to a Dispute
not resolved in the ordinary course of business (the "Initiating Party")
must give written notice of the Dispute (the "Dispute Notice") to the other
Party (the "Non-Initiating Party"). The Dispute Notice shall include (i) a
statement of that Party's position and a summary of arguments supporting
that position, and (ii) the name and title of the executive who will
represent that Party, and of any other person who will accompany the
executive, in the negotiations under Subsection 13.3 below.
13.3 NEGOTIATION BETWEEN EXECUTIVES - If one Party has given a Dispute Notice
under Subsection 13.2 above, the Parties may attempt in good faith to
resolve the Dispute within forty-five (45) Days following receipt of the
Dispute Notice by the Non-Initiating Party by negotiation between
executives who have authority to settle the Dispute and who are at a higher
level of management than the persons with direct responsibility for
administration of this Agreement or the matter in Dispute. Within fifteen
(15) Days after receipt of the Dispute Notice, the Non-Initiating Party may
submit to the other a written response. If given, the response will include
(i) a statement of that Party's position and a summary of arguments
supporting that position, and (ii) the name and title of the executive who
will represent that Party and of any other person who will accompany the
executive. If such a response is given by the Non-Initiating Party, within
forty-five (45) Days following receipt of the Dispute Notice by the
Non-Initiating Party, the executives of both Parties will meet at a
mutually acceptable time and place, and thereafter, as often as they
reasonably deem necessary, to attempt to resolve the Dispute.
13.4 MEDIATION - If the Dispute has not been resolved by negotiation under the
Subsection 13.3 above within forty-five (45) Days following receipt of the
Dispute Notice by the Non-Initiating Party or if the Non-Initiating Party
fails to respond within the required fifteen (15) Day period, either Party
may initiate the mediation procedure of this Subsection by giving written
notice to the other Party ("Mediation Notice"). The Parties will endeavor
to settle the Dispute by mediation within sixty (60) Days of the Mediation
Notice under the then current Center for Public Resources ("CPR") Model
Mediation Procedure for Business Disputes. If the Parties have not agreed
upon a mediator within seven (7) Days after the Mediation Notice, either
Party may request CPR assistance in the selection of a mediator under its
guidelines. Unless otherwise agreed to by the Parties, no discovery shall
be allowed during the sixty (60) Day mediation period. If both Parties
elect to participate in the mediation procedures set forth herein, the cost
of the mediator will be shared equally between the Parties, unless
otherwise agreed to in writing by the Parties. If one Party elects not to
participate in the mediation procedures, neither Party shall bear any cost
associated with such procedure, other than costs that each Party may have
incurred in connection therewith which shall be borne by the Party that
incurred such costs.
13.5 ARBITRATION. If the Dispute has not been resolved by mediation under the
Subsection 13.4 above within the required sixty (60) Day period or if
either Party fails and/or refuses to participate in such mediation
procedures, either Party may request that the matter be resolved through
arbitration by submitting a written notice (the "Arbitration Notice") to
14
the other. Additionally, if the Parties have been unable to agree on a fee
re-determination initiated by either Party pursuant to Section 7.3 during
the Negotiation Period, as set forth in said section, either Party may then
initiate arbitration to by submitting an Arbitration Notice to the other
and such fee re-determination shall not be submitted to the procedures set
forth in Sections 13.2 through 13.4 but shall be arbitrated pursuant to
this Section 13.5 and the following Subsections 13.6 through 13.10, as
applicable ("Fee Re-Determination Arbitration"). Any arbitration that is
conducted hereunder shall be governed by the Federal Arbitration Act, 9
U.S.C. Section 1 ET SEQ., as amended, and will not be governed by the
arbitration acts, statutes, or rules of any other jurisdiction.
13.6 ARBITRATION PROCEDURE. The Arbitration Notice shall name the noticing
Party's arbitrator and shall contain a statement of the issue(s) presented
for arbitration. Within fifteen (15) Days of receipt of an Arbitration
Notice, the other Party shall name its arbitrator by written notice to the
other and may designate any additional issue(s) for arbitration. The two
named arbitrators shall select the third arbitrator within fifteen (15)
Days after the date on which the second arbitrator was named. Should the
two arbitrators fail to agree on the selection of the third arbitrator,
either Party shall be entitled to request the Senior Judge of the United
States District Court for the Southern District of Texas to select the
third arbitrator. Should either Party fail and/or refuse to name its
arbitrator within the required fifteen (15) Day period, the other Party
shall be entitled to request the Senior Judge of the United States District
Court for the Southern District of Texas to select the arbitrator for such
Party. Notwithstanding the foregoing, in the case of a Fee Re-Determination
Arbitration, the Parties shall mutually select a single arbitrator within
thirty (30) Days after receipt of the Arbitration Notice and if they should
fail to agree on the arbitrator within that time period, either Party shall
be entitled to request the Senior Judge of the United States District Court
for the Southern District of Texas to select the arbitrator. The cost of
the arbitrator shall be shared equally between the Parties. All arbitrators
shall be qualified by education or experience within the natural gas
liquids portion of the energy industry to decide the issues presented for
arbitration. No arbitrator shall be: a current or former director, officer,
or employee of either Party or its Affiliates; an attorney (or member of a
law firm) who has rendered legal services to either Party or its Affiliates
within the preceding three Years; or an owner of any of the common stock of
either Party, or its Affiliates.
13.7 ARBITRATION HEARING. The three arbitrators or in the case of Fee
Re-Determination Arbitration, the single arbitrator shall commence the
arbitration proceedings within twenty-five (25) Days following the
appointment of the third arbitrator or the single arbitrator, as
appropriate. The arbitration proceedings shall be held at a mutually
acceptable site and if the Parties are unable to agree on a site, the
arbitrators shall select the site. The arbitrators shall have the authority
to establish rules and procedures governing the arbitration proceedings,
including, without limitation, rules concerning discovery. Each Party shall
have the opportunity to present its evidence at the hearing. The
arbitrators may call for the submission of pre-hearing statements of
position and legal authority, but no post-hearing briefs shall be
submitted. The arbitration panel shall not have the authority to award
incidental, consequential, special, punitive or exemplary
15
damages. In addition, if an issue under consideration is limited to a
determination of an amount of money owed by one Party to the other, or Fee
Re-Determination Arbitration, each Party shall submit to the single
arbitrator a final offer of its proposed resolution of the dispute ("Final
Offers"). The arbitrator shall be charged to select from the two Final
Offers the one which the panel finds to be the most reasonable and
consistent with the terms and conditions of this Agreement, and the
arbitrator shall not average the Parties' proposals or otherwise craft its
own remedy. With regard to Fee Re-Determination Arbitration, the basis for
the arbitrator's decision shall be based on the factors set forth is said
Section 7.3 All evidence submitted in an arbitration proceeding,
transcripts of such proceedings, and all documents submitted by the Parties
in an arbitration proceeding shall be kept confidential and shall not be
disclosed to any third Party by either Party hereto.
13.8 ARBITRATION DECISION AND COSTS. The decision of the arbitrators or a
majority of them, shall be in writing and shall be final and binding upon
the Parties as to the issue(s) submitted. The cost of the hearing shall be
shared equally by the Parties, and, except as provided in Section 13.6,
each Party shall be responsible for its own expenses and those of its
counsel or other representatives. Each Party hereby irrevocably waives, to
the fullest extent permitted by law, any objection it may have to the
arbitrability of any such disputes, controversies or claims and further
agrees that a final determination in any such arbitration proceeding shall
be conclusive and binding upon each Party.
13.9 ENFORCEMENT OF AWARD. Judgment upon any award rendered by the arbitrators
may be entered in any court having jurisdiction. The prevailing Party shall
be entitled to reasonable attorneys' fees in any contested court proceeding
brought to enforce or collect any award of judgment rendered by the
arbitrators.
13.10 TOLLING AND PERFORMANCE. Except as otherwise provided in this Article
XIII, all applicable statutes of limitation and defenses based upon the
passage of time and all contractual limitation periods specified in this
Agreement, if any, will be tolled while the procedures specified in this
Article XIII are pending. The Parties will take all actions to effectuate
necessary to effectuate the tolling of any applicable statute of limitation
or contractual limitation periods. All deadlines specified herein may be
extended by mutual written agreement of the Parties. Each Party is required
to continue to perform its obligations under this Agreement pending final
resolution of any Dispute, unless to do so would be impossible or
impracticable under the circumstances. Notwithstanding the foregoing, the
statute of limitations of the State of Texas applicable to the commencement
of a lawsuit will apply to the commencement of an arbitration under this
Agreement, except that no defenses will be available based upon the passage
of time during any negotiation or mediation called for by the preceding
Subsections of this Section.
ARTICLE XIV: MISCELLANEOUS
14.1 EXISTING LAWS AND REGULATIONS. This Agreement and the operations hereunder
shall be subject to the applicable federal and state laws and the
applicable orders, laws, rules
16
and regulations of any state or federal authority having or asserting
jurisdiction, but nothing contained herein shall be construed as a waiver
of any right to question or contest any such order, law, rule or
regulation. The parties shall be entitled to regard all such laws, rules,
regulations and orders as valid and may act in accordance therewith until
such time as the same may be invalidated by final judgment in a court of
competent jurisdiction.
14.2 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES
ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED
AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME, WITHOUT GIVING EFFECT TO ANY CHOICE
OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
14.3. WAIVER. No waiver by either Party of any default under this Agreement or
any of the provisions of this Agreement shall be deemed to be a waiver of
any future default or any other provision hereof, whether of a like or a
different character. No waiver shall be effective unless made in writing
and signed by the Party to be charged with such wavier, nor shall such
waiver constitute a continuing waiver unless expressly provided by the
Party to be charged with such wavier.
14.4 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
assigns. Notwithstanding the foregoing, neither Party may assign this
Agreement, nor any interest herein, without the prior written consent of
the other Party, which consent shall not be unreasonably withheld;
provided, however, that a Party may from time to time designate an
Affiliate to perform this Agreement, either in whole or in part, such
performance being considered that of the Party hereto. It is understood,
however, that by such designation, said Party hereto does not thereby avoid
obligations imposed by the terms and provisions hereof. Amoco further
specifically agrees that it will not assign its interest in the volumes of
Raw Product dedicated to this Agreement without the prior written consent
of CBF, which consent shall not be unreasonably withheld; provided such
assignment is made subject to this Agreement and any Assignee ratifies and
adopts this Agreement in writing.
14.5 EXHIBITS. Unless specifically otherwise provided, if any term or condition
expressed or implied in any Exhibit to this Agreement conflicts or is at
variance with any term or condition of this Agreement, this Agreement shall
prevail. All Exhibits as referenced herein are attached hereto and made a
part hereof.
14.6 DTPA WAIVER. THE PARTIES CERTIFY THAT THEY ARE NOT "CONSUMERS" WITHIN THE
MEANING OF THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT,
SUBCHAPTER E OF CHAPTER 17, SECTIONS 17.42, ET SEQ., OF THE TEXAS BUSINESS
AND COMMERCE CODE, AS AMENDED ("DTPA"). THE PARTIES COVENANT, FOR
THEMSELVES AND FOR AND ON BEHALF OF ANY SUCCESSOR OR ASSIGNEE, THAT, IF THE
DTPA IS APPLICABLE, (a) THE PARTIES ARE "BUSINESS CONSUMERS" AS THAT TERM
IS DEFINED IN THE DTPA, (b) OTHER THAN SECTION 17.555 OF THE TEXAS BUSINESS
AND COMMERCE CODE, EACH PARTY HEREBY
17
WAIVES AND RELEASES ALL OF ITS RIGHTS AND REMEDIES UNDER THE DTPA AS
APPLICABLE TO THE OTHER PARTY AND ITS SUCCESSORS AND ASSIGNS, AND (c) EACH
PARTY SHALL DEFEND AND INDEMNIFY THE OTHER FROM AND AGAINST ANY AND ALL
CLAIMS OF OR BY THAT PARTY OR ANY OF ITS SUCCESSOR AND ASSIGNS OR ANY OF
ITS OR THEIR AFFILIATES BASED IN WHOLE OR IN PARTY OF THE DTPA, ARISING UT
OF OR IN CONNECTION WITH THE TRANSACTION SET FORTH IN THIS AGREEMENT.
14.7 HEADINGS, ARTICLES AND SECTIONS. All references to Articles" and "Sections"
herein pertain to Articles and Sections of this Agreement, unless expressly
stated otherwise. Headings are for purposes of reference only and shall not
be used to construe the meaning of this Agreement.
14.8 PRINCIPLES OF CONSTRUCTION AND INTERPRETATION. In construing this
Agreement, the following principles shall be followed:
(i) no consideration shall be given to the fact or presumption that
one Party had a greater or lesser hand in drafting this Agreement:
(ii) examples shall not be construed to limit, expressly or by
implication, the matter they illustrate:
(iii) the word "includes" and its syntactical variants mean "includes,
but is not limited to" and corresponding syntactical variant
expressions: and
(iv) the plural shall be deemed to include the singular and vice
versa, as applicable.
14.9 NOTICES. Any notice, request, instruction, correspondence, or other
documentation to be given hereunder by either Party to the other shall be
in writing and delivered personally or mailed by registered or certified
mail, postage prepaid and return receipt requested, or facsimile as
follows:
FOR CBF:
To: Cedar Bayou Fractionators, L.P.
c/▇ ▇▇▇▇▇▇ Petroleum Company, Limited Partnership
Attention: Vice President, Asset Marketing and Services
At: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
18
With a copy to: General Counsel
▇▇▇▇▇▇ Petroleum Company,
Limited Partnership
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
FOR AMOCO (EXCEPT ACCOUNTING MATTERS):
To: Amoco Oil Company
Attention: Manager, NGL Planning and Optimization
Mail Code 1102
At: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or: P. 0. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
FOR AMOCO ACCOUNTING MATTERS:
To: Amoco Business Services
Attention: NGL Accounting - 14th Floor
At: ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as either Party shall designate by written notice
to the other. A notice sent by facsimile shall be deemed to have been
receive by the close of the first Business Day following the Day on which
it was transmitted and confirmed by transmission report or such earlier
time as confirmed orally or in writing by the receiving Party. Notice by
U. S. Mail, whether by U. S. Express Mail, registered mail or certified
mail, or by overnight courier shall be deemed to have been received by the
close of the second Business Day after the Day upon which its was sent, or
such earlier time as is confirmed orally or in writing by the receiving
Party. Any Party may change its address or facsimile number by giving
notice of such change in accordance with herewith.
14.10 NO THIRD PARTY BENEFICIARY. This Agreement is for the sole benefit of the
Parties and their respective successors and permitted assigns, and shall
not inure to the benefit of any other person whomsoever, it being the
intention of the Parties that no third person shall be deemed a third
party beneficiary of this Agreement.
19
14.11 SEVERABILITY. This Agreement and the operations hereunder shall be subject
to the valid and applicable federal and state laws and the valid and
applicable orders, laws, local ordinances, rules, and regulations of any
local, state or federal authority having jurisdiction, but nothing
contained herein shall be construed as a waiver of any right to question
or contest any such order, laws, rules, or regulations in any forum having
jurisdiction in the premises. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under the present or future laws
effective during the term of this Agreement, (i) such provision will be
fully severable, (ii) this Agreement will be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised a
part of this Agreement, and (iii) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected
by the illegal, invalid, or unenforceable provision or by its severance
from this Agreement. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision, there will be added automatically as a part of
this Agreement a provision similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and as may be legal, valid, and
enforceable. If a provision of this Agreement is or becomes illegal,
invalid, or unenforceable in any jurisdiction, the foregoing event shall
not affect the validity or enforceability in that jurisdiction of any
other provision of this Agreement nor the validity or enforceability in
other jurisdictions of that or any other provision of this Agreement.
14.12 ENTIRE AGREEMENT AND AMENDMENT. This Agreement, including, without
limitation, all exhibits hereto, integrates the entire understanding
between the Parties with respect to the subject matter covered and
supersedes all prior understandings, drafts, discussions, or statements,
whether oral or in writing, expressed or implied, dealing with the same
subject matter. This Agreement may not be amended or modified in any
manner except by a written document signed by both parties that expressly
amends this Agreement.
14.13 SETOFFS AND COUNTERCLAIMS. Except as otherwise provided herein, each Party
reserves to itself all rights, set-offs, counterclaims, and other remedies
and/or defenses which that Party is or may be entitled to arising from or
out of this Agreement or as otherwise provided by law.
14.14 NO PARTNERSHIP OR ASSOCIATION. Nothing contained in this Agreement shall
be construed to create an association, trust, partnership, or joint
venture or impose a trust or partnership duty, obligation, or liability on
or with regard to either Party.
14.15 NO COMMISSIONS, FEES OR REBATES. Except as expressly authorized by this
Agreement, no director, employee or agent of either Party shall give or
receive any commission, fee, rebate gift or entertainment of significant
cost or value in connection with this Agreement. Any representative or
representative(s) authorized by either Party may audit the applicable
records of the other Party for the purpose of determining whether there
has been compliance with this Section.
20
'Confidential Treatment Requested'
14.16 NO PARTNERSHIP, ASSOCIATION, ETC. Nothing contained in this Agreement
shall be construed to create an association, trust, partnership, or
joint venture or impose a trust or partnership duty, obligation, or
liability on or with regard to either Party.
ARTICLE XV: FUEL SUPPLY OPTION
By giving sixty (60) Days written notice to CBF prior to the beginning
of any calendar year, Amoco may elect to sell fuel gas to CBF at a price equal
* to [REDACTED] of the then estimated fuel gas consumption of the Fractionator,
which estimate shall be established Monthly by CBF in its sole discretion.
Amoco will be solely responsible for all costs associated with arranging for
the delivery of such fuel gas to the Fractionator.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the Day and Year first above written.
Cedar Bayou Fractionators, L.P.
By: Downstream Energy Ventures Co., L.L.C.
Title: Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
-------------------------
AMOCO OIL COMPANY
By: /s/ A. B ▇▇▇▇▇▇▇▇
----------------------------
Title: MANAGER, NGL SUPPLY & LOGISTICS
-------------------------
21
EXHIBIT "A"
to
Fractionation Agreement
by and between
Cedar Bayou Fractionators, L. P.
and
Amoco Oil Company
AMOCO'S DEDICATED PLANTS
Plant Location
----- --------
Anschutz Uinta Co., Wyoming
Denver City Plant ▇▇▇▇▇▇ Co., Texas
Echo Springs Carbon Co., Wyoming
▇▇▇▇▇▇▇▇▇ Plant Ector Co., Texas
Headleee Devonian Plant Ector Co., Texas
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Co., Colorado
▇▇▇▇ Rio Arriba, Co., New Mexico
Lybrook Rio Arriba Co., New Mexico
▇▇▇▇ ▇▇▇▇▇▇▇ Co., Wyoming
Painter Uinta Co., Wyoming
San ▇▇▇▇ San ▇▇▇▇ Co., New Mexico
▇▇▇▇▇▇ Plant ▇▇▇▇▇▇▇ Co., Texas
Wamsutter Carbon Co., Wyoming
▇▇▇▇▇▇ C02 Plant Yoakum Co., Texas
West Seminole Plant ▇▇▇▇▇▇ Co., Texas
Whitney Canyon Uinta Co., Wyoming
▇▇▇▇▇▇▇ Plant ▇▇▇▇▇▇ Co., Texas
22
EXHIBIT B
ETHANE-PROPANE
80-20 MIXTURE
SPECIFICATION
Product characteristics with test methods are herein specified for
ethane-propane 80-20 mixtures received by ▇▇▇▇▇▇ Petroleum Company, Limited
Partnership.
TEST METHODS
PRODUCT CHARACTERISTICS MINIMUM MAXIMUM LATEST REVISION
----------------------- ------- ------- ---------------
1. COMPOSITION ASTM E-260
Percent by Liquid Volume
Methane (Percent of Ethane) 2.0 GPA ▇▇▇▇
▇▇▇▇▇▇▇▇ (Percent of Ethane) 1.0
Methane, Ethane & Ethylene 78.0 82.0
Propane, Propylene, & Butanes 18.0 22.0 ASTM D-2163
Propylene 1.0
Butanes 0.8
2. CORROSION
Copper Strip @ 100 DEG. F 1-b ASTM D-1838
(Invalid if additive or inhibitor
is used.)
Corrosion Additive or Inhibitor,
PPM by Weight 1 Applicable Industry
Practices
3. TOTAL SULFUR
PPM by Weight in Liquid 120 ASTM D-3246
4. DRYNESS No Free Water Visual
5. CARBON DIOXIDE
PPM by Weight in Liquid 1,000 GPA 2177
PRODUCT ACCOUNTING
For accounting purposes, methane and ethylene shall be considered ethane,
propylene and butanes shall be considered propane within the above listed
specification limits.
Any excess of these hydrocarbon Components above the specification limits shall
not be accounted for.
1
EXHIBIT B
PROPANE SPECIFICATION
Product characteristics with test methods are herein specified for propane
received by ▇▇▇▇▇▇ Petroleum Company, Limited Partnership. This product meets
the requirement of the GPA HD-5 propane specification.
TEST METHODS
PRODUCT CHARACTERISTICS MINIMUM MAXIMUM LATEST REVISION
----------------------- ------- ------- ---------------
1. COMPOSITION ASTM E-260
Percent by Liquid Volume Ethane As limited by other
Components & vapor
pressure.
Propane 90.0 100
Propylene 5.0 ASTM D-2163
Butanes & Heavier 2.5
2. VAPOR PRESSURE
Psig @ 100 DEG. F 208 ASTM D-1267
3. CORROSION
Copper Strip @ 100 DEG. F 1-b ASTM D-1838
(Invalid if additive or inhibitor is
used.)
Corrosion Additive or Inhibitor, PPM
by Weight. 1 Applicable Industry Practices
4. TOTAL SULFUR
PPM by Weight in Liquid 120 ASTM D-3246
5. HYDROGEN SULFIDE
PPM by Weight in Liquid 1 Field - Length of Stain Tube
(Lab test required if field test is Lab Chromatography with Flame
positive.) Photometric Detector
6. CARBONYL SULFIDE
PPM by Weight in Liquid 2 Field - Length of Stain Tube
(Field test invalid if C(4) + exceeds 1.0
LV%) (Lab test required if field test Lab - UOP 212 or UOP 791
is positive.) Lab - Gas Chromatography with
Flame Photometric Detector
7. NON-VOLATILE RESIDUE
a) Milliliters @ 100 DEG. F 0.05 ASTM D-2158
b) Oil Stain Pass
THE FOLLOWING TESTS ARE OPTIONAL, DEPENDING
UPON THE PRODUCT SOURCE:
8. DRYNESS
Freeze Valve, Seconds 60 (Note 2) ASTM D-2713
9. VOLATILE RESIDUE
95% Evaporated - Temperature, DEG. F -37 ASTM D-1837
10. AMMONIA
PPM by Weight in Liquid 1 Field - Length of Stain Tube
Lab - UOP 430
11. FLUORIDES
PPM by Weight in Liquid as 5 Field - Length of Stain Tube
Monatomic Fluorine
12. OTHER DELETERIOUS SUBSTANCES (PPM BY
WEIGHT IN LIQUID)
Includes but not limited to 1 Gas chromatography with flame
(Isoprene, Butadiene, Vinyl ionization or electron capture
Chloride, glycol, amine, caustic) detection or other
NOTES: (1) The test methods for items 2 and 7 are not necessary if a
compositional analysis is available which indicates compliance with these
requirements.
(2) The addition of methanol in the distribution system should be on a
spot basis and must not exceed a rate of 5 Gallons per 10,000 Gallons of
product.
2
EXHIBIT B
NORMAL BUTANE SPECIFICATION
Product characteristics with test methods are herein specified for normal butane
received by ▇▇▇▇▇▇ Petroleum Company, Limited Partnership.
TEST METHODS
PRODUCT CHARACTERISTICS MINIMUM MAXIMUM LATEST REVISION
----------------------- ------- ------- ---------------
1. COMPOSITION ASTM E-260
Percent by Liquid Volume
Isobutane and Lighter 5.0 ASTM D-2163
Butylane (Percent of N. Butane) 1.0
N. Butane & Butylene 95.0 100 GPA 2165
Pentanes & Heavier 2.0
2. VAPOR PRESSURE
Psig @ 100 DEG. F 50 ASTM D-1267
3. CORROSION
Copper Strip @ 100 DEG. F 1-b ASTM D-1838
(Invalid if additive or inhibitor is
used.)
Corrosion Additive or Inhibitor, PPM
by Weight 1 Applicable Industry Practices
4. TOTAL SULFUR
PPM by Weight in Liquid 140 ASTM D-3246
5. VOLATILE RESIDUE
95% Evaporated - Temperature, DEG. F +36 ASTM D-1837
6. DRYNESS No Free Water Visual
NOTE: The test methods for Items 2 and 5 are not necessary if a compositional
analysis indicates compliance with these requirements.
3
EXHIBIT B
ISOBUTANE SPECIFICATION
Product characteristics with test methods are herein specified for isobutane
received by ▇▇▇▇▇▇ Petroleum Company, Limited Partnership.
TEST METHODS
PRODUCT CHARACTERISTICS MINIMUM MAXIMUM LATEST REVISION
----------------------- ------- ------- ---------------
1. COMPOSITION ASTM E-260
Percent by Liquid Volume
Propane, Propylene and Lighter 3.0 ASTM D-2163
Isobutane 96.0 100
Butylene, Normal Butane & Heavier 4.0
2. VAPOR PRESSURE
Psig @ 100 DEG. F 62 ASTM D-1267
3. CORROSION
Copper Strip @ 100 DEG. F 1-b ASTM D-1838
(Invalid if additive or inhibitor is
used.)
Corrosion Additive or Inhibitor, PPM
by Weight 1 Applicable Industry Practices
4. TOTAL SULFUR
PPM by Weight in Liquid 140 ASTM D-3246
5. VOLATILE RESIDUE
95% Evaporated - Temperature DEG. F +16 ASTM D-1837
6. DRYNESS No Free Water Visual
NOTE: The test methods for Items 2 and 5 are not necessary if an adequate
compositional analysis is available which indicates compliance with these
requirements.
4
EXHIBIT B
NATURAL GASOLINE SPECIFICATION
Product characteristics with test methods are herein specified for natural
gasoline received by ▇▇▇▇▇▇ Petroleum Company, Limited Partnership.
TEST METHODS
PRODUCT CHARACTERISTICS MINIMUM MAXIMUM LATEST REVISION
----------------------- ------- ------- ---------------
1. COMPOSITION ASTM E-260
Percent by Liquid Volume
Butanes & Lighter 3.0 GPA 2165
Pentanes & Heavier 97 100
2. VAPOR PRESSURE
Psi @ 100 DEG. F, ▇▇▇▇ 14 ASTM D-323
3. CORROSION
Copper Strip @ 104 DEG. F 1-b ASTM D-130
(Invalid if additive or inhibitor is
used.)
Corrosion Additive or Inhibitor, PPM
by Weight. 1 Applicable Industry Practices
4. DOCTOR TEST Negative GPA 1138
5. DRYNESS No Free Water Visual
6. COLOR +25 No Color Field White Cup Method
Lab - ASTM D-156
7. DISTILLATION
End Point, DEG. F 375 ASTM D-216
NOTE: The test methods for Items 2 and 7 are not necessary if an adequate
compositional analysis is available which indicates compliance with these
requirements.
5
