Off-Specification LNG. 12.3.1 If Project Co, acting as a Reasonable and Prudent Operator, determines prior to loading a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then: (A) Project Co shall give notice to the Transporter of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo); (B) the Transporter shall use reasonable efforts, including coordinating with DES Buyer the operator of the Receiving Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer and the operator of the Receiving Terminal, each of them acting in their sole discretion, and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Terminal, and any downstream facilities being supplied regasified LNG; (C) if the Transporter can accept delivery of such cargo, then the Transporter shall notify Project Co of the Transporter’s estimate of the direct costs to be incurred by the Transporter, any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), provided, however, that Project Co’s liability shall not exceed *** percent (***%) of the estimate notified by the Transporter and agreed by Project Co; and (D) if (1) the Transporter determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(C), then the Transporter shall be entitled to reject such cargo by giving Project Co notice of rejection within seventy-two (72) hours of the Transporter’s receipt of Project Co’s notice pursuant to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply. 12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then: (A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or (B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
Appears in 3 contracts
Samples: Shipping Services Agreement (Cheniere Corpus Christi Holdings, LLC), Shipping Services Agreement (Cheniere Corpus Christi Holdings, LLC), Shipping Services Agreement (Cheniere Corpus Christi Holdings, LLC)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading of a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co Seller shall, as soon as reasonably practicable, suspend loading and shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);, and:
(Ba) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG; Buyer shall notify Seller within twenty-four (24) hours of receipt of Seller’s notice whether Buyer is so able to accept such LNG;
(Cb) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co take delivery of the Transporter’s estimate of the such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs to be incurred by the Transporter, Buyer (including direct costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG to meet the Specifications (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), ; provided, however, that Project Cothe Seller’s liability shall not exceed *** twenty percent (***20%) of the estimate notified CSP for such cargo, multiplied by the Transporter and agreed by Project Coquantity (in MMBtu) of the Off-Spec LNG; and
(Dc) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter that Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(b), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant notice, and Buyer shall be relieved of its obligation to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D)load such cargo, Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall applyapply in respect of such cargo.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter Buyer without the Transporter Buyer being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter Buyer being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, thenthen upon Buyer or Seller becoming aware that the LNG is Off-Spec LNG and following prompt notice thereof to the other Party, Seller shall immediately suspend loading operations (if applicable) pending a determination by Buyer and:
(Aa) if the Transporter Buyer is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable) within the cost limitations set forth in this Section 12.3.2(a), then Project Co Buyer shall notify Seller as soon as practicable to resume loading (if applicable) and Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs and expenses incurred by the Transporter Buyer (including direct costs owed to any Affiliate of the Transporter Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG received at the Receiving Discharge Terminal to meet the Specifications (or to otherwise make such LNG marketable)), in an amount not exceeding one hundred percent (100%) of the CSP for such cargo, multiplied by the quantity (in MMBtu) of the Off-Spec LNG so delivered; provided, however, that Buyer, any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal shall not be required to incur costs in excess of those reimbursable by Seller; or
(Bb) if the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable) within the cost limitations set forth in Section 12.3.2(a), then: (i) the Transporter Buyer shall be entitled to reject such Off-Spec FOB LNG by giving Project Co Seller notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co Seller notifies the Transporter in writing Buyer that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter Buyer becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter Buyer shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the TransporterBuyer, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co Seller shall reimburse the Transporter Buyer in respect of and indemnify and hold the Transporter Buyer harmless from all direct loss, damagedamages, costs and expenses incurred by Buyer, any Affiliate of Buyer, Transporter or the Transporter operator of the Discharge Terminal (if, and only to the extent that, Buyer is contractually liable to such operator) as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Discharge Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Discharge Terminal, and damage caused to the LNG Tanker and Receiving Discharge Terminal. In the event the Transporter .
12.3.3 If Buyer rejects a cargo under this Paragraph 12.3.2(Bin accordance with Section 12.3.1(c) or 12.3.2(b), Project Co Seller shall be deemed to have failed to make available such cargo, and the Scheduled Cargo Quantity for such cargo shall be treated as a Cargo DoP Quantity resulting in a Cargo DoP Payment under Section 5.6.2. If Buyer accepts a cargo of Off-Spec LNG in accordance with Section 12.3.1(b) or transports and Clause 16.2.1 treats a cargo of Off-Spec LNG in accordance with Section 12.3.2(a), Seller shall applybe deemed to have satisfied its obligation to make available such LNG to Buyer for purposes of Section 5.6.1. For purposes of calculations pursuant to this Section 12.3, the CSP shall be determined as of the Month in which the applicable Delivery Window begins.
Appears in 1 contract
Samples: LNG Sale and Purchase Agreement (Tellurian Inc. /De/)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading of a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co Seller shall, as soon as reasonably practicable, suspend loading and shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);, and:
(Ba) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG; Buyer shall notify Seller within forty-eight (48) hours of receipt of Seller’s notice whether Buyer is so able to accept such LNG;
(Cb) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co take delivery of the Transporter’s estimate of the such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs to be incurred by the Transporter, Buyer (including direct costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG to meet the Specifications (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), ; provided, however, that Project CoSeller’s liability shall not exceed *** twenty percent (***20%) of the estimate notified CSP for such cargo, multiplied by the Transporter and agreed by Project Coquantity (in MMBtu) of the Off-Spec LNG; and
(Dc) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter that Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(b), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant notice, and Buyer shall be relieved of its obligation to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D)load such cargo, Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall applyapply in respect of such cargo.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter Buyer without the Transporter Buyer being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter Buyer being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, thenthen upon Buyer or Seller becoming aware that the LNG is Off-Spec LNG and following prompt notice thereof to the other Party, Seller shall immediately suspend loading operations (if applicable) pending a determination by Buyer and:
(Aa) if the Transporter Buyer is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable) within the cost limitations set forth in this Section 12.3.2(a), then Project Co Buyer shall notify Seller as soon as practicable to resume loading (if applicable) and Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs and expenses incurred by the Transporter Buyer (including direct costs owed to any Affiliate of the Transporter Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG received at the Receiving Discharge Terminal to meet the Specifications (or to otherwise make such LNG marketable)), in an amount not exceeding one hundred percent (100%) of the CSP for such cargo, multiplied by the quantity (in MMBtu) of the Off-Spec LNG so delivered; provided, however, that Buyer, any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal shall not be required to incur costs in excess of those reimbursable by Seller; or
(Bb) if the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable) within the cost limitations set forth in Section 12.3.2(a), then: :
(i) the Transporter Buyer shall be entitled to reject such Off-Spec FOB LNG by giving Project Co Seller notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co Seller notifies the Transporter in writing Buyer that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter Buyer becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter Buyer shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the TransporterBuyer, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co Seller shall reimburse the Transporter Buyer in respect of and indemnify and hold the Transporter Buyer harmless from all direct loss, damagedamages, costs and expenses incurred by Buyer, any Affiliate of Buyer, Transporter or the operator of the Discharge Terminal (if, and only to the extent that, Buyer is contractually liable to such Transporter or operator) as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Discharge Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Discharge Terminal, and damage caused to the LNG Tanker and Receiving Discharge Terminal. In the event the Transporter .
12.3.3 If Buyer rejects a cargo under this Paragraph 12.3.2(Bin accordance with Section 12.3.1(c) or 12.3.2(b), Project Co Seller shall be deemed to have failed to make available such cargo, and the Scheduled Cargo Quantity for such cargo shall be treated as a Cargo DoP Quantity resulting in a Cargo DoP Payment under Section 5.6.2. If Buyer accepts a cargo of Off-Spec LNG in accordance with Section 12.3.1(b) or transports and Clause 16.2.1 treats a cargo of Off-Spec LNG in accordance with Section 12.3.2(a), Seller shall applybe deemed to have satisfied its obligation to make available such LNG to Buyer for purposes of Section 5.6.1.
Appears in 1 contract
Samples: LNG Sale and Purchase Agreement (Tellurian Inc. /De/)
Off-Specification LNG. 97
12.3.1 If Project Co, acting as a Reasonable and Prudent Operator, determines prior to loading a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co shall give notice to the Transporter of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);
(B) the Transporter shall use reasonable efforts, including coordinating with DES Buyer the operator of the Receiving Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer and the operator of the Receiving Terminal, each of them acting in their sole discretion, and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Terminal, and any downstream facilities being supplied regasified LNG;
(C) if the Transporter can accept delivery of such cargo, then the Transporter shall notify Project Co of the Transporter’s estimate of the direct costs to be incurred by the Transporter, any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), provided, however, that Project Co’s liability shall not exceed *** percent (***%) of the estimate notified by the Transporter and agreed by Project Co; and
(D) if (1) the Transporter determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(C), then the Transporter shall be entitled to reject such cargo by giving Project Co notice of rejection within seventy-two (72) hours of the Transporter’s receipt of Project Co’s notice pursuant to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or
(B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the 98 Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
Appears in 1 contract
Samples: Shipping Services Agreement (Cheniere Corpus Christi Holdings, LLC)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading a of an LNG cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co Seller shall, as soon as reasonably practicable, suspend loading and shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);, and:
(Ba) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such Off-Spec LNG for delivery to DES Buyer where the Off-Spec LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG; Buyer shall notify Seller within forty-eight (48) hours of receipt of Seller’s notice whether Buyer is so able to accept such Off-Spec LNG;
(Cb) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co take delivery of the Transporter’s estimate of the such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs to be incurred by the Transporter, Buyer (including direct costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG to meet the Specifications (or to otherwise make such Off-Spec LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), ; provided, however, that Project CoSeller’s liability shall not exceed *** twenty percent (***20%) of the estimate notified CSP for such cargo, multiplied by the Transporter and agreed by Project Coquantity (in MMBtu) of the Off-Spec LNG; and
(Dc) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter that Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(b), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant notice, and Buyer shall be relieved of its obligation to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D)load such cargo, Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall apply.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or
(B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter apply in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall applycargo.
Appears in 1 contract
Samples: LNG Sale and Purchase Agreement (Tellurian Inc. /De/)
Off-Specification LNG. 12.3.1 (a) If Project CoSeller, acting as a Reasonable and Prudent OperatorPerson, determines prior to loading loading, in the case of an FOB delivery, or unloading, in the case of a cargo DES delivery, a Cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loadingsuch loading or unloading, respectively, then:
13 (Ai) Project Co Seller shall give notice to the Transporter Buyer and Buyer’s Transporter, if applicable, of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading the loading, in the case of an FOB delivery, or the unloading, in the case of a DES delivery, of the cargoCargo);
; (Bii) the Transporter Buyer shall use reasonable effortsendeavours, including coordinating with DES Buyer the operator of the Receiving TerminalBuyer’s Transporter, if applicable, and Buyer’s Operator, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Buyer’s Transporter and the operator of the Receiving TerminalBuyer’s Operator, each of them acting in their sole discretiondiscretion (unless Buyer’s Transporter or Buyer’s Operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG TankerVessel, the Receiving TerminalBuyer’s Facilities, and any downstream facilities being supplied regasified LNG;
; (Ciii) if the Transporter Buyer can accept delivery of such cargoCargo, then the Transporter Buyer shall notify Project Co Seller of the TransporterBuyer’s estimate of the direct costs to be incurred by the TransporterBuyer, any Affiliate of the TransporterBuyer, JPS and/or Buyer’s Transporter (if applicable), and the operator of the Receiving Terminal Buyer’s Operator in transporting (if applicable) and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable), and, to the extent Project Co Seller agrees to such estimate, the Transporter Buyer shall take delivery of such cargoCargo, and Project Co Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs incurred by the Transporter Buyer (including costs costs. owed to any Affiliate of the TransporterBuyer, Buyer’s Transporter and/or JPS (if applicable), and the operator of the Receiving Terminal Buyer’s Operator in transporting (if applicable) and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving TerminalBuyer’s Facilities), provided, however, that Project CoSeller’s liability shall not exceed *** one hundred and twenty percent (***120%) of the estimate notified by the Transporter Buyer and agreed by Project CoSeller; and
and (Div) if (1A) the Transporter Buyer determines in good faith that it cannot, using reasonable effortsendeavours, receive such cargoCargo, (2B) Project Co Seller rejects the cost estimate estimate, or (3C) the Transporter Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 5.2(a)(iii), then the Transporter Buyer shall be entitled to reject such cargo Cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall applynotice.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or
(B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
Appears in 1 contract
Samples: Master LNG Sale and Purchase Agreement (New Fortress Energy LLC)
Off-Specification LNG. 12.3.1 If Project Co, acting as a Reasonable and Prudent Operator, determines prior to loading a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co shall give notice to the Transporter of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);
(B) the Transporter shall use reasonable efforts, including coordinating with DES Buyer the operator of the Receiving Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer and the operator of the Receiving Terminal, each of them acting in their sole discretion, and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Terminal, and any downstream facilities being supplied regasified LNG;
(C) if the Transporter can accept delivery of such cargo, then the Transporter shall notify Project Co of the Transporter’s estimate of the direct costs to be incurred by the Transporter, any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), provided, however, that Project Co’s liability shall not exceed *** percent (***%) of the estimate notified by the Transporter and agreed by Project Co; and
(D) if (1) the Transporter determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(C), then the Transporter shall be entitled to reject such cargo by giving Project Co notice of rejection within seventy-two (72) hours of the Transporter’s receipt of Project Co’s notice pursuant to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or
(B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply. 13. COOL-DOWN AND GAS-UP OF LNG TANKERS
13.1 The Transporter shall be solely responsible for ensuring that each LNG Tanker elected by the Transporter for taking a cargo arrives at the Corpus Christi Facility (or Alternate Production Facility, as applicable) cold and in a state of readiness. Notwithstanding the foregoing and subject to Paragraph 13.2, in respect of LNG Tankers scheduled to load a cargo hereunder at the Corpus Christi Facility, Project Co shall provide cool-down service to LNG Tankers at the Transporter’s request as follows:
13.1.1 Project Co shall use reasonable efforts (taking into account availability of sufficient berth time) to accept the Transporter’s request to provide cool-down service for any LNG Tanker, subject to the Transporter requesting such cool-down service by notice to Project Co as far in advance of the relevant cargo’s FOB Delivery Window as is reasonably practicable but in no case less than thirty (30) Days before the relevant cargo’s FOB Delivery Window, provided that Project Co shall accept the Transporter’s request to provide a cool-down service if (i) the Transporter makes such request by notice at the time the Transporter proposes its schedule of cargoes pursuant to Paragraph 1.2.2 of Schedule 5 for the relevant Contract Year or (ii) at the time of the request, the loading schedule for the Corpus Christi Facility for the relevant Contract Year indicates sufficient available berth time to accommodate such cool-down service. Project Co shall have no obligation to provide a cool-down service under this Paragraph 13.1.1 in excess of *** (***) cool-downs during any Contract Year. All LNG provided by Project Co for cooling such LNG Tankers shall be sold, delivered and invoiced by Project Co, and paid for by Transporter, at a price equal to the FOB CSP (as defined in Clause 11.1.2);
13.1.2 Project Co shall provide cool-down service without charge to any LNG Tankers requiring cool-down solely as a result of a delay caused by Project Co, but only if such LNG Tanker made no other call between the original FOB Delivery Window and the requested cool-down time; and
13.1.3 Project Co shall use reasonable efforts, contingent on the availability of sufficient berth time and facilities status to provide cool-down service at any time other than as described in Paragraphs 13.1.1 and 13.1.2 upon request by the Transporter, provided that all LNG provided by Project Co for cooling such LNG Tankers shall be sold, delivered and invoiced by Project Co, and paid for by the Transporter, at a price equal to the FOB CSP (as defined in Clause 11.1.2).
13.2 The following shall apply to any cool-down service provided by Project Co pursuant to Paragraph 13.1:
13.2.1 the MMBtu content of the total liquid quantities delivered for cooling, measured before evaporation (without deduction of the quantity of vapour returned from the LNG Tanker), shall be determined by reference to the relevant LNG Tanker’s cool-down tables;
13.2.2 the Parties will determine by mutual agreement the rates and pressures for delivery of LNG for cool-down, but always in full accordance with safe operating parameters and procedures mutually established and agreed by both the LNG Tanker and the Corpus Christi Facility; and
13.2.3 LNG provided during cool down by Project Co pursuant to Paragraph 13.1 shall not be applied against the FOB SCQ for the relevant cargo.
Appears in 1 contract
Samples: Shipping Services Agreement (Cheniere Corpus Christi Holdings, LLC)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading of a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co Seller shall, as soon as reasonably practicable, suspend loading and shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);, and:
(Ba) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG; Buyer shall notify Seller within forty-eight (48) hours of receipt of Seller’s notice whether Buyer is so able to accept such LNG;
(Cb) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co take delivery of the Transporter’s estimate of the such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs to be incurred by the Transporter, Buyer (including direct costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG to meet the Specifications (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), ; provided, however, that Project CoSeller’s liability shall not exceed *** twenty percent (***20%) of the estimate notified CSP for such cargo, multiplied by the Transporter and agreed by Project Coquantity (in MMBtu) of the Off-Spec LNG; and
(Dc) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter that Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(b), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant notice, and Buyer shall be relieved of its obligation to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D)load such cargo, Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall apply.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or
(B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter apply in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall applycargo.
Appears in 1 contract
Samples: LNG Sale and Purchase Agreement (Tellurian Inc. /De/)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(Aa) Project Co Seller shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);
(Bb) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG;
(Cc) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co Seller of the TransporterBuyer’s estimate of the direct costs to be incurred by the TransporterBuyer, any Affiliate of the Buyer, Transporter, and the operator of the Receiving Discharge Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable), and, to the extent Project Co Seller agrees to such estimate, the Transporter Buyer shall take delivery of such cargo, and Project Co Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs incurred by the Transporter Buyer (including costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Discharge Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Discharge Terminal), provided, however, that Project CoSeller’s liability shall not exceed *** one hundred and twenty percent (***120%) of the estimate notified by the Transporter Buyer and agreed by Project CoSeller; and
(Dd) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, or (21) Project Co Seller rejects the cost estimate or (32) the Transporter Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(c), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventy-two (72) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall applynotice.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter Buyer without the Transporter Buyer being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter Buyer being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(Aa) if the Transporter Buyer is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs incurred by the Transporter Buyer (including direct costs owed to any Affiliate of the Transporter Buyer, Transporter, and the operator of the Receiving Discharge Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Discharge Terminal to meet the Specifications (or to otherwise make such LNG marketable)), in an amount not exceeding one hundred percent (100%) of the product of the delivered quantity of such Off-Spec LNG and the CSP; provided, however, that Buyer, any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal shall not be required to incur costs in excess of those reimbursable by Seller; or
(Bb) if the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: :
(i) the Transporter Buyer shall be entitled to reject such Off-Spec FOB LNG by giving Project Co Seller notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co Seller notifies the Transporter Buyer in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter Buyer becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter Buyer shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the TransporterBuyer, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriateappropriate including by directing Seller to offload such Off-Spec LNG at the Loading Port; and (iii) Project Co Seller shall reimburse the Transporter Buyer in respect of and indemnify and hold the Transporter Buyer harmless from all direct loss, damage, costs and expenses incurred by the Buyer, any Affiliate of Buyer, or Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Discharge Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Discharge Terminal, and damage caused to the LNG Tanker and Receiving Discharge Terminal. In the event the Transporter .
12.3.3 If Buyer rejects a cargo under this Paragraph 12.3.2(Bin accordance with Section 12.3.1(d) or 12.3.2(b), Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall apply.
Appears in 1 contract
Samples: LNG Sale and Purchase Agreement (Cheniere Energy Inc)
Off-Specification LNG. 12.3.1 13.3.1. If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading a cargo before making available any LNG scheduled hereunder that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loadingmaking such LNG available, then:
(Aa) Project Co Seller shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of unloading any LNG at the cargoDelivery Point(s));
(Bb) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the operator of the Receiving TerminalBuyer’s Facility Operator and Transporter, to accept such Off-Spec LNG for delivery to DES Buyer where the Off-Spec LNG would be acceptable to the DES Buyer and the operator of the Receiving Terminal, each of them Buyer’s Facility Operator acting in their its sole discretion, and would not prejudice the safe and reliable operation of Buyer’s Facilities and other applicable facilities including the Delivery Assets; provided, that Buyer’s exercise of “reasonable efforts” does not include using reasonable efforts to treat Off-Spec LNG (or to otherwise make Off-Spec LNG marketable) or to bear any costs or reimbursement obligations of Transporter associated with accepting such Off-Spec LNG pursuant to Section 13.3.6. Upon Buyer’s request, Seller shall provide to Buyer Transporter’s good-faith estimate of any costs or expenses expected to be incurred by Transporter or any Third Party Service Provider in connection with retrofitting, repairing, modifying or replacing any LNG Tanker, the Receiving Terminal, and any downstream facilities being supplied regasified Container Barge or Truck parts or components thereof as a result of utilizing such Off-Spec LNG;
(Cc) if the Transporter Buyer can accept delivery of such cargoOff-Spec LNG, then the Transporter within fifteen (15) Days of receipt of Seller’s notice in accordance with Section 13.3.1(a), Buyer shall notify Project Co Seller of the TransporterBuyer’s estimate of the direct costs to be incurred by the TransporterBuyer, any Affiliate of the Transporter, Buyer and the operator of the Receiving Terminal Buyer’s Facility Operator in transporting and treating connection with accepting such Off-Spec FOB LNG LNG, and Seller shall reply to Buyer within twenty-four (or 24) hours whether Seller agrees to otherwise make such LNG marketable), and, to estimate. To the extent Project Co Seller agrees to such estimate, the Transporter Buyer shall take delivery of such cargoOff-Spec LNG, and Project Co Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs incurred by the Transporter Buyer (including direct costs owed to any Affiliate of the Transporter, Buyer and the operator of the Receiving Terminal Buyer’s Facility Operator) in transporting and treating connection with accepting such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal)Buyer’s Facilities excluding costs payable by Buyer pursuant to Section 13.3.6, provided, however, that Project CoSeller’s liability shall not exceed *** one hundred twenty percent (***120%) of the estimate notified by the Transporter Buyer and agreed by Project CoSeller; and
(Dd) if (1i) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargoOff-Spec LNG, (2ii) Project Co Seller rejects the cost estimate estimate, or (3iii) the Transporter Buyer anticipates that it might be liable for direct costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 13.3.1(c), then the Transporter Buyer shall be entitled to reject such cargo quantity by giving Project Co Seller notice of rejection within as soon as reasonably practicable but no later than seventy-two (72) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant to Paragraph 12.3.1(Ain Section 13.3.1(a). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
12.3.2 13.3.2. If Off-Spec FOB LNG is delivered to the Transporter Buyer without the Transporter Buyer being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter Buyer being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(Aa) if the Transporter Buyer is able, using reasonable efforts, to transport and treat accept the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable)LNG, then Project Co Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs incurred by the Transporter Buyer (including direct costs owed to any Affiliate of the Transporter Buyer and the operator of the Receiving Terminal Buyer’s Facility Operator) in transporting and treating connection with accepting such Off-Spec FOB LNG received at the Receiving Terminal Delivery Points; provided, that Buyer’s exercise of “reasonable efforts” does not include using reasonable efforts to meet the Specifications treat Off-Spec LNG (or to otherwise make such Off-Spec LNG marketable)); or
(Bb) if the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, transport and treat accept such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable)LNG, then: :
(i) the Transporter Buyer shall be entitled to reject such Off-Spec FOB LNG by giving Project Co Seller notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (Ax) Project Co Seller notifies the Transporter Buyer in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (By) the Transporter Buyer becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter Buyer shall be entitled to dispose of the loaded delivered portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the TransporterBuyer, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co Seller shall reimburse the Transporter Buyer in respect of and indemnify and hold the Transporter Buyer Indemnified Parties harmless from all direct loss, damage, costs and expenses Losses incurred by the Transporter Buyer, any Affiliate of Buyer or Buyer’s Facility Operator as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker Buyer’s Facilities, which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving TerminalBuyer’s Facilities, and damage caused to the Buyer’s Facilities.
13.3.3. If Buyer rejects Off-Spec LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B)in accordance with Section 13.3.1(d) or 13.3.2, Project Co Seller shall be deemed to have failed to make available such cargo LNG and Clause 16.2.1 Section 5.8 shall apply.
13.3.4. Seller shall not be liable to Buyer for Off-Spec LNG pursuant to Section 13.3.2 if the ISO Container was delivered to the Buyer’s Facility within sixty (60) Days after LNG was loaded into such ISO Container at the Break-Bulk Point.
13.3.5. Notwithstanding the foregoing, Seller shall reimburse Buyer in respect of and indemnify and hold Buyer harmless from all Losses incurred by Buyer or any Affiliate of Buyer resulting from damage to the ISO Containers as a result of loading Off-Spec LNG into such ISO Containers. Buyer shall not be responsible for any costs or expenses incurred by Seller in connection with the handling, treatment or safe disposal of Off-Spec LNG that was loaded into such ISO Containers.
13.3.6. Notwithstanding the foregoing and subject to Section 13.3.7(c), if Buyer elects to accept any Off-Spec LNG pursuant to Section 13.3.1(c) prior to such Off-Spec LNG being loaded into an LNG Tanker (or if the delivery is from an Alternate Facility, an Alternate LNG Tanker), Buyer shall reimburse Seller for any costs or expenses incurred by Transporter or any Third Party Service Provider in connection with retrofitting, repairing, modifying or replacing any LNG Tanker, Container Barge or Truck parts or components thereof, to the extent such retrofit, repair, modification or replacement results from Buyer’s election to receive such Off-Spec LNG; provided, however, that Buyer’s liability shall not exceed one hundred twenty percent (120%) of the estimate provided by Seller to Buyer pursuant to Section 13.3.1(b).
13.3.7. If (a) Buyer did not give consent to Seller to load Off-Spec LNG into an LNG Tanker (or if the delivery is from an Alternate Facility, an Alternate LNG Tanker), (b) Buyer elects to accept any Off-Spec LNG pursuant to
Section 13.3.1 (c) after such Off-Spec LNG has been loaded into an LNG Tanker (or if the delivery is from an Alternate Facility, an LNG Tanker), or (c) Buyer provided consent pursuant to Section 13.3.1(c) prior to such Off-Spec LNG being loaded into an LNG Tanker (or if the delivery is from an Alternate Facility, an LNG Tanker) but Seller did not disclose the actual extent to which such Off-Spec LNG did not comply with the Specifications, then Buyer shall not be responsible for reimbursing Seller for any costs incurred by Transporter or any Third Party Service Provider in connection with retrofitting, repairing, modifying or replacing any LNG Tanker, Container Barge or Trucks parts or components thereof as a result of any such Off-Spec LNG.
13.3.8. Any payment that Seller or Buyer makes under this Section 13.3 shall not be treated as an indirect, incidental, consequential or exemplary loss or a loss of income or profits for purposes of Section 16.2.1.
Appears in 1 contract
Samples: LNG Fuel Supply Agreement (Hawaiian Electric Co Inc)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading of a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co Seller shall, as soon as reasonably practicable, suspend loading and shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);, and:
(Ba) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG; Buyer shall notify Seller within forty-eight (48) hours of receipt of Seller’s notice whether Buyer is so able to accept such LNG;
(Cb) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co take delivery of the Transporter’s estimate of the such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs to be incurred by the Transporter, Buyer (including direct costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG to meet the Specifications (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), ; provided, however, that Project CoSeller’s liability shall not exceed *** twenty percent (***20%) of the estimate notified CSP for such cargo, multiplied by the Transporter and agreed by Project Coquantity (in MMBtu) of the Off-Spec LNG; and
(Dc) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter that Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(b), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant notice, and Buyer shall be relieved of its obligation to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D)load such cargo, Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall apply.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or
(B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter apply in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall applycargo.
Appears in 1 contract
Samples: LNG Sale and Purchase Agreement (Tellurian Inc. /De/)
Off-Specification LNG. 92
12.3.1 If Project Co, acting as a Reasonable and Prudent Operator, determines prior to loading a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co shall give notice to the Transporter of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);
(B) the Transporter shall use reasonable efforts, including coordinating with DES Buyer the operator of the Receiving Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer and the operator of the Receiving Terminal, each of them acting in their sole discretion, and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Terminal, and any downstream facilities being supplied regasified LNG;
(C) if the Transporter can accept delivery of such cargo, then the Transporter shall notify Project Co of the Transporter’s estimate of the direct costs to be incurred by the Transporter, any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), provided, however, that Project Co’s liability shall not exceed *** percent (***%) of the estimate notified by the Transporter and agreed by Project Co; and
(D) if (1) the Transporter determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(C), then the Transporter shall be entitled to reject such cargo by giving Project Co notice of rejection within seventy-two (72) hours of the Transporter’s receipt of Project Co’s notice pursuant to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter without the Transporter being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, then:
(A) if the Transporter is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable), then Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including direct costs owed to any Affiliate of the Transporter and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG received at the Receiving Terminal to meet the Specifications (or to otherwise make such LNG marketable)); or
(B) if the Transporter determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable), then: (i) the 93 Transporter shall be entitled to reject such Off-Spec FOB LNG by giving Project Co notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co notifies the Transporter in writing that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the Transporter, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co shall reimburse the Transporter in respect of and indemnify and hold the Transporter harmless from all direct loss, damage, costs and expenses incurred by the Transporter as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Terminal, and damage caused to the LNG Tanker and Receiving Terminal. In the event the Transporter rejects a cargo under this Paragraph 12.3.2(B), Project Co shall be deemed to have failed to make available such cargo and Clause 16.2.1 shall apply.
Appears in 1 contract
Samples: Shipping Services Agreement (Cheniere Corpus Christi Holdings, LLC)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading of a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co Seller shall, as soon as reasonably practicable, suspend loading and shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);, and:
(Ba) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG; Buyer shall notify Seller within twenty-four (24) hours of receipt of Seller’s notice whether Buyer is so able to accept such LNG;
(Cb) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co take delivery of the Transporter’s estimate of the such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs to be incurred by the Transporter, Buyer (including direct costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG to meet the Specifications (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), ; provided, however, that Project Cothe Seller’s liability shall not exceed *** twenty percent (***20%) of the estimate notified Transfer Price Ceiling for such cargo, multiplied by the Transporter and agreed by Project Coquantity (in MMBtu) of the Off-Spec LNG; and
(Dc) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter that Buyer anticipates that it might be 71 liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(b), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant notice, and Buyer shall be relieved of its obligation to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D)load such cargo, Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall applyapply in respect of such cargo.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter Buyer without the Transporter Buyer being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter Buyer being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, thenthen upon Buyer or Seller becoming aware that the LNG is Off-Spec LNG and following prompt notice thereof to the other Party, Seller shall immediately suspend loading operations (if applicable) pending a determination by Buyer and:
(Aa) if the Transporter Buyer is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable) within the cost limitations set forth in this Section 12.3.2(a), then Project Co Buyer shall notify Seller as soon as practicable to resume loading (if applicable) and Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs and expenses incurred by the Transporter Buyer (including direct costs owed to any Affiliate of the Transporter Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG received at the Receiving Discharge Terminal to meet the Specifications (or to otherwise make such LNG marketable)), in an amount not exceeding one hundred percent (100%) of an amount equal to the delivered quantity of such Off-Spec LNG, multiplied by the Transfer Price Ceiling for such cargo; provided, however, that Buyer, any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal shall not be required to incur costs in excess of those reimbursable by Seller; or
(Bb) if the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable) within the cost limitations set forth in Section 12.3.2(a), then: (i) the Transporter Buyer shall be entitled to reject such Off-Spec FOB LNG by giving Project Co Seller notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co Seller notifies the Transporter in writing Buyer that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter Buyer becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter Buyer shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the TransporterBuyer, acting 72 in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co Seller shall reimburse the Transporter Buyer in respect of and indemnify and hold the Transporter Buyer harmless from all direct loss, damagedamages, costs and expenses incurred by Buyer, any Affiliate of Buyer, Transporter or the Transporter operator of the Discharge Terminal (if, and only to the extent that, Buyer is contractually liable to such operator) as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Discharge Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Discharge Terminal, and damage caused to the LNG Tanker and Receiving Discharge Terminal. In the event the Transporter .
12.3.3 If Buyer rejects a cargo under this Paragraph 12.3.2(Bin accordance with Section 12.3.1(c) or 12.3.2(b), Project Co Seller shall be deemed to have failed to make available such cargo, and the Scheduled Cargo Quantity for such cargo shall be treated as a Cargo DoP Quantity resulting in a Cargo DoP Payment under Section 5.6.2. If Buyer accepts a cargo of Off-Spec LNG in accordance with Section 12.3.1(b) or transports and Clause 16.2.1 treats a cargo of Off-Spec LNG in accordance with Section 12.3.2(a), Seller shall applybe deemed to have satisfied its obligation to make available such LNG to Buyer for purposes of Section 5.6.1.
Appears in 1 contract
Samples: Equity Capital Contribution Agreement (Tellurian Inc. /De/)
Off-Specification LNG. 12.3.1 If Project CoSeller, acting as a Reasonable and Prudent Operator, determines prior to loading of a cargo that the LNG is expected not to comply with the FOB Specifications (“Off-Spec FOB LNG”) upon loading, then:
(A) Project Co Seller shall, as soon as reasonably practicable, suspend loading and shall give notice to the Transporter Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);, and:
(Ba) the Transporter Buyer shall use reasonable efforts, including coordinating with DES Buyer the Transporter and the operator of the Receiving Discharge Terminal, to accept such LNG for delivery to DES Buyer where the LNG would be acceptable to the DES Buyer Transporter and the operator of the Receiving Discharge Terminal, each of them acting in their sole discretiondiscretion (unless Transporter or such operator is Buyer or 66 an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Receiving Discharge Terminal, and any downstream facilities being supplied regasified LNG; Buyer shall notify Seller within twenty-four (24) hours of receipt of Seller’s notice whether Buyer is so able to accept such LNG;
(Cb) if the Transporter Buyer can accept delivery of such cargo, then the Transporter Buyer shall notify Project Co take delivery of the Transporter’s estimate of the such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs to be incurred by the Transporter, Buyer (including direct costs owed to any Affiliate of the Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG to meet the Specifications (or to otherwise make such LNG marketable), and, to the extent Project Co agrees to such estimate, the Transporter shall take delivery of such cargo, and Project Co shall reimburse the Transporter for all reasonable documented direct costs incurred by the Transporter (including costs owed to any Affiliate of the Transporter, and the operator of the Receiving Terminal in transporting and treating such Off-Spec FOB LNG (or to otherwise make such LNG marketable) prior to and at the Receiving Terminal), ; provided, however, that Project Cothe Seller’s liability shall not exceed *** twenty percent (***20%) of the estimate notified Transfer Price Ceiling for such cargo, multiplied by the Transporter and agreed by Project Coquantity (in MMBtu) of the Off-Spec LNG; and
(Dc) if (1) the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, (2) Project Co rejects the cost estimate or (3) the Transporter that Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Paragraph 12.3.1(CSection 12.3.1(b), then the Transporter Buyer shall be entitled to reject such cargo by giving Project Co Seller notice of rejection within seventyforty-two eight (7248) hours of the TransporterBuyer’s receipt of Project CoSeller’s notice pursuant notice, and Buyer shall be relieved of its obligation to Paragraph 12.3.1(A). In the event the Transporter rejects a cargo under this Paragraph 12.3.1(D)load such cargo, Project Co Seller shall be deemed to have failed to make available such cargo and Clause 16.2.1 Section 5.6.2 shall applyapply in respect of such cargo.
12.3.2 If Off-Spec FOB LNG is delivered to the Transporter Buyer without the Transporter Buyer being made aware of the fact that such Off-Spec FOB LNG does not comply with the FOB Specifications, or without the Transporter Buyer being made aware of the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications, thenthen upon Buyer or Seller becoming aware that the LNG is Off-Spec LNG and following prompt notice thereof to the other Party, Seller shall immediately suspend loading operations (if applicable) pending a determination by Buyer and:
(Aa) if the Transporter Buyer is able, using reasonable efforts, to transport and treat the Off-Spec FOB LNG to meet the FOB Specifications (or to otherwise make such LNG marketable) within the cost limitations set forth in this Section 12.3.2(a), then Project Co Buyer shall notify Seller as soon as practicable to resume loading (if applicable) and Seller shall reimburse the Transporter Buyer for all reasonable documented direct costs and expenses incurred by the Transporter Buyer (including direct costs owed to any Affiliate of the Transporter Buyer, Transporter, and the operator of the Receiving Terminal Discharge Terminal) in transporting and treating such Off-Spec FOB LNG received at the Receiving Discharge Terminal to meet the Specifications (or to otherwise make such LNG marketable)), in an amount not exceeding one hundred percent (100%) of an amount equal to the delivered quantity of such Off-Spec LNG, multiplied by the Transfer Price Ceiling for such cargo; provided, however, that Buyer, any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal shall not be required to incur costs in excess of those reimbursable by Seller; or
(Bb) if the Transporter Buyer determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec FOB LNG to meet the Specifications (or to make such LNG marketable) within the cost limitations set forth in Section 12.3.2(a), then: (i) the Transporter Buyer shall be entitled to reject such Off-Spec FOB LNG by giving Project Co Seller notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Project Co Seller notifies the Transporter in writing Buyer that such LNG is Off-Spec FOB LNG and the actual extent to which such Off-Spec FOB LNG does not comply with the FOB Specifications or (B) the Transporter Buyer becomes aware that such LNG is Off-Spec FOB LNG, whichever occurs first; (ii) the Transporter Buyer shall be entitled to dispose of the loaded portion of such Off-Spec FOB LNG (or regasified LNG produced therefrom) in any manner that the TransporterBuyer, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate; and (iii) Project Co Seller shall reimburse the Transporter Buyer in respect of and indemnify and hold the Transporter Buyer harmless from all direct loss, damagedamages, costs and expenses incurred by Buyer, any Affiliate of Buyer, Transporter or the Transporter operator of the Discharge Terminal (if, and only to the extent that, Buyer is contractually liable to such operator) as a result of the delivery of such Off-Spec FOB LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec FOB LNG or other LNG being held at the Receiving Discharge Terminal or being carried onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Receiving Discharge Terminal, and damage caused to the LNG Tanker and Receiving Discharge Terminal. In the event the Transporter .
12.3.3 If Buyer rejects a cargo under this Paragraph 12.3.2(Bin accordance with Section 12.3.1(c) or 12.3.2(b), Project Co Seller shall be deemed to have failed to make available such cargo, and the Scheduled Cargo Quantity for such cargo shall be treated as a Cargo DoP Quantity resulting in a Cargo DoP Payment under Section 5.6.2. If Buyer accepts a cargo of Off-Spec LNG in accordance with Section 12.3.1(b) or transports and Clause 16.2.1 treats a cargo of Off-Spec LNG in accordance with Section 12.3.2(a), Seller shall applybe deemed to have satisfied its obligation to make available such LNG to Buyer for purposes of Section 5.6.1.
Appears in 1 contract
Samples: Equity Capital Contribution Agreement (Tellurian Inc. /De/)
