Exhibit 10.11
RENTECH, INC.
March 4, 1999
Xx. Xxxx Xxxxxx Xx Xxxxxxx
BC Projetos
Xx. Xxxxxxxx Xxxxxxxx, 00/00 xxx.
Xxx xx Xxxxxxx, XX CEP 20080-003
RE: Memorandum of Understanding
Dear Luiz:
The purpose of this letter is to set forth an agreement between BC
Projetos Ltda. and Rentech Inc. for the purpose of exploiting the
opportunities in Brazil for use of the Rentech Xxxxxxx-Tropsch
Technology. This letter will address the following subjects:
- Background of the situation
- The Petrobras/TDA project
- BC Projetos role and Rentech relationship
BACKGROUND OF THE SITUATION
Rentech is actively pursuing an opportunity with Petrobras for an
evaluation of the use of the Rentech Technology in the Amazon region to
convert stranded natural gas, currently being re-injected, to a clean
liquid fuel for distribution in the region. BC Projetos has
relationships with Petrobras and has assisted Rentech in setting up
meetings and presentations to Petrobras.
It is the intention of Rentech that the initial feasibility work be
funded by the U.S. Trade and Development Agency (TDA) which will
require a detailed proposal and approval for funding.
Rentech and BC Projetos have had several conversations and meetings
regarding the possible mutual advantages of working together on
projects in Brazil and specifically targeting the Petrobras project for
the Amazon.
THE PETROBRAS/TDA PROJECT
Petrobras is the national energy company that controls all the natural
gas and oil in Brazil. They have significant natural gas reserves in
the Amazon region that they re-inject because there is no transmission
or distribution infrastructure. A number of studies have been
completed for the utilization of this resource. These studies include
a transmission pipeline, conversion to LNG for shipping out of the
region, and power generation. It is our understanding that those
options have not proven economical.
Rentech is proposing that a feasibility study be undertaken to consider
the application of the Rentech Xxxxxxx-Tropsch Technology. Followed by
a detailed conceptual study. Should the project prove to be economical
upon completion of the detailed conceptual study then Rentech and BC
Projetos would seek a project owner and developer.
The funding for the feasibility and detailed conceptual work would be
through a grant from the U.S. Trade and Development Agency.
BC PROJETOS ROLE AND RENTECH RELATIONSHIP
BC Projetos is an engineering firm in Brazil with years of experience
and a well-qualified process engineering staff. BC Projetos also has
relationships with Petrobras that can assist Petrobras in moving
forward with the proposed project as well as other potential projects
that could utilize the Rentech Technology.
Rentech proposes that this letter set up a relationship with BC Projetos
for projects in Brazil. BC Projetos would be the engineer of
preference in Brazil for Rentech with the role of BC Projetos defined
as follows:
Marketing support for Rentech in Brazil including:
- Identification of potential projects.
- Setting up meetings for Rentech with Brazilian clients.
- Identification of potential partners for project and financing
structures in Brazil.
- Proposal translation and submittal for projects in Brazil.
Engineering support for projects in Brazil including:
- Feasibility engineering.
- Data gathering.
- Preliminary flow sheets and process material balances.
- Site tours and reviews, development of plot plans.
- Soils analysis and sampling.
- Environmental permit process and review.
- Environmental permits applications.
- Local material and construction cost estimating.
- Government regulations on importing and taxing of process plan
equipment.
During the marketing phase on any project, BC Projetos would pay for its
own marketing expenses and Rentech would pay for its own marketing
expenses. Once a project is defined and a client has awarded a
contract to either BC Projetos or Rentech, then each party will receive
payment for their respective services pursuant to a mutually negotiated
contract between them.
The U.S. TDA places restriction on payments of grant monies to foreign
engineering companies of 25% of the grant. Accordingly the
Petrobras/TDA project that has been targeted would have BC Projetos
working with a U.S. Engineering firm. Rentech will use its best
efforts to negotiate a scope of work with the U.S. Engineering firm
that would provide the maximum services for BC Projetos.
Should Rentech receive any interest by parties in Brazil, those would be
shared with BC Projetos and a mutual response and follow up would be
developed. Rentech will provide marketing material and technical
information to BC Projetos in support of their marketing and
engineering efforts.
It is understood that neither Rentech nor BC Projetos can control the
clients and should a client desire to use a competing Xxxxxxx-Tropsch
technology, BC Projetos is free to provide the engineering for the
client using that specific technology. Likewise, should the client
prefer to use an alterative engineering firm, together with the Retch
Technology, then Rentech has the right to provide the technology and
work with the client's designated engineer. However, both Rentech and
BC Projetos will diligently and in good faith attempt to convince the
client of our team strength and preference for working together.
Any disputes arising under this Memorandum of Understanding would be
settled through arbitration under the rules of the American Arbitration
Association.
Should you have questions please call.
Very truly yours
Rentech, Inc.
/s/ Xxxxxxx Xxxxxxxx
by Xxxxxxx Xxxxxxxx
Director for GTL Marketing
Read, Acknowledged and agreed to by:
BC Projetos
/s/ Xxxx Xxxxxx Xx Xxxxxxx 8 MAR 99
______________________________________ ______________
Signature
Xxxx Xxxxxx Xx Xxxxxxx
Director
