EXHIBIT 10.12
AMENDMENT TO GAS SALES AGREEMENT
THIS AMENDMENT, made and entered into as of the 1st day of January, 1996
(Effective Date), by and between WESTAR TRANSMISSION COMPANY, a Delaware
Corporation (Seller), and ENERGAS COMPANY, a division of Atmos Energy
Corporation, a Texas Corporation (Buyer);
W I T N E S S E T H
WHEREAS, Seller and Buyer are successors in interest to a Gas Sales
Agreement dated January 1, 1986, as amended (Agreement), between Westar
Transmission Company, and Energas Company; and
WHEREAS, Seller and Buyer now desire to make certain changes and
modifications to the Agreement which are more fully described below.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, Seller and Buyer do hereby mutually agree to amend
the Agreement on the Effective Date as follows:
I.
DEFINITIONS
All Sections of Article I shall be deleted in their entirety and replaced
with the following:
Section 1. "Buyer" means the party who is purchasing and receiving gas
volumes under this Agreement.
Section 2. "Seller" means the party who is selling and delivering gas
volumes under this Agreement.
Section 3. "Party" or "Parties" means Buyer and/or Seller hereunder,
acting by and through duly authorized representatives.
Section 4. "Day" means the period of twenty-four consecutive hours
commencing at 7:00 a.m. Central Time (CT) on one calendar day and ending at 7:00
a.m. CT on the following calendar day. The reference date for any day should be
the calendar date upon which such twenty-four (24) hour period began.
Section 5. "Month" means the period commencing at 7:00 a.m. CT on the
first day of a calendar month and ending at 7:00 a.m. CT on the first day of the
following calendar month.
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Section 6. "Mcf" means the quantity of gas occupying a volume of one
thousand (1000) cubic feet at a temperature of sixty (60) degrees Fahrenheit and
an absolute pressure of fourteen and sixty-five hundredths pounds per square
inch (14.65 psia).
Section 7. "Btu" means the amount of heat required to raise the
temperature of one avoirdupois pound of pure water from fifty-eight and five
tenths (58.5) degrees Fahrenheit to fifty-nine and five tenths (59.5) degrees
Fahrenheit at a constant pressure of fourteen and sixty-five hundredths (14.65)
pounds per square inch absolute (psia).
Section 8. "MMBtu" means one million (1,000,000) Btu.
Section 9. "Operating Agreement" means the agreement between Westar
Transmission Company and Energas Company, dated December 1, 1996, covering
measurement equipment and testing, measurement specifications, pressures,
quality, maintenance of facilities, and other operational matters.
Section 10. "Buyer's West Texas System" means Energas' West Texas System,
excluding Energas' Dalhart/Channing System and Energas' Fritch/Xxxxxxx System.
II.
QUANTITY
Sections 1, 2 and 3 of Article II shall be deleted in their entirety and
replaced with the following:
Section 1. If and to the extent any of Buyer's other suppliers of natural
gas fail to deliver any volumes of natural gas that such other suppliers are
obligated to deliver for Buyer's West Texas System requirements, Seller shall
sell to Buyer hereunder all of the natural gas requirements of Buyer on Buyer's
West Texas System.
III.
DELIVERY POINT(S)
Section 1 of Article III shall be deleted and replaced with the following:
Section 1. The delivery of gas hereunder shall be subject to the Operating
Agreement and shall be at the outlet flange of Seller's facilities, at all
points of interconnection between Seller's facilities and Buyer, where Seller
sells gas to Buyer as of December 31, 1995, or subsequently at any other
mutually agreed to point(s) to be agreed to in writing by the parties ("Delivery
Point(s)").
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IV.
DELIVERY PRESSURE
Section 1 of Article IV shall be deleted and replaced with the following:
Section 1. The delivery pressure shall be governed by Article V and
related provisions of the Operating Agreement.
V.
METERING
All Sections under Article V shall be deleted in their entirety and be
replaced with the following:
Section 1. Metering shall be governed by Article II and related provisions
of the Operating Agreement.
VI.
UNITS OF VOLUME
Section 1 of Article VI shall be deleted in its entirety and replaced with
the following:
Section 1. Units of volume shall be governed by Article III and related
provisions of the Operating Agreement.
VII.
MEASUREMENT
All Sections of Article VII are deleted in their entirety and replaced with
the following:
Section 1. All measurement of gas hereunder shall be governed by Article
III and related provisions of the Operating Agreement.
VIII.
PRICE
All Sections under Article VIII shall be deleted in their entirety and be
replaced with the following:
Section 1. The price per Mcf during the term of this Agreement shall equal
Seller's margin in effect on the date of delivery as approved by the appropriate
regulatory authority plus the Weighted Average Cost of Gas as defined in Article
VIII, Section 2, below.
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Section 2. The Weighted Average Cost of Gas for any month shall be
calculated by dividing the Available Gas Volume into the Gas Acquisition Cost.
The "Gas Acquisition Cost" shall be composed of:
A) Third Party (Non-affiliate) Purchases.
Amounts paid for the volumes delivered into the Seller's Transmission
System during such month at wellheads, at field lines, at plant
outlets, and at transmission lines under the provisions of the
applicable contract involved. "Amounts paid" shall also include the
amortization of prepayments based on actual gas deliveries of the gas
related to that prepayment; and
B) Affiliate Purchases.
Each purchase from an affiliate shall be priced at the lower of:
1) What the Seller actually paid the affiliate;
2) The AWACOG for such month calculated without consideration of
affiliate purchases;
3) The price for the same item or class of items which the supplying
affiliate sold to another affiliate or to a third party;
4) The Weighted Average Cost of Purchases (WACOP) from third parties
(non-affiliates) for such month; and
C) Exchange Receipts.
An amount calculated by multiplying the net gas received into Seller's
Transmission system during such month by the previous month's AWACOG.
The "Exchange Receipts" component shall be deleted from "Gas
Acquisition Cost" at the earlier of:
1) September 30, 1989 or
2) When the cumulative exchange receipts dollars used in the AWACOG
calculation for the period beginning October 1, 1988 equals the
value of the net exchange balance on September 30, 1988.
D) Storage Withdrawals.
An amount calculated by multiplying the total volume of
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gas withdrawn from storage during the month by the AWACOG for the
month that the gas was injected into storage. This is in accordance
with the first-in first-out methodology for valuing working gas in
storage.
E) Delivery Costs.
The "Delivery Costs" shall be composed of the amounts paid for
delivery of gas into Seller's Transmission System for resale to Buyer
in situations where the supplier cannot make delivery into such
system, thus reflecting the cost of delivery to the initial point of
receipt into Seller's Transmission System. The "Delivery Cost" shall
also include amounts paid for transportation between points on
Seller's Transmission System when such off-system transportation is
required by:
1) Operational necessity and efficiency or
2) An emergency situation.
The "Available Gas Volumes" shall be composed of the following gas volumes
delivered into the Seller's Transmission System during such month:
AA) Third Party (Non-affiliate) Purchase Volumes.
Volumes delivered at wellheads, at field lines, at plant outlets and
at transmission lines under the provisions of the applicable contracts
involved; and
BB) Affiliate Purchase Volumes.
Volumes purchased by Seller from affiliates; and
CC) Exchange Receipts Volumes.
Volumes representing net gas received under gas exchange agreements.
The exchange receipts volumes shall be eliminated from the AWACOG
calculation simultaneously with the deletion of "Exchange Receipts" as
provided in "C)" above; and
DD) Storage Withdrawal Volumes.
Total storage gas volumes withdrawn.
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IX.
BILLING AND PAYMENT
All Sections under Article IX shall be deleted in their entirety and
replaced with the following:
Section 1. On or before the fifteenth(15th) day of each Month, Seller
shall render a statement to Buyer giving the total quantity of gas, expressed in
Mcf, delivered and sold hereunder during the preceding Month and the monies due
therefor. Such statements are to be rendered in accordance with this Agreement,
and shall include any amounts due for tax reimbursement under the provisions of
this Agreement. In the event the amount due Seller cannot be determined on or
before the fifteenth (15th) day of the Month, Seller shall nevertheless invoice
Buyer for the amounts that are known and/or are nominated by Buyer, and when the
information is available Seller shall invoice for actual amounts (or refund any
payment as necessary) as soon as practicable after such amount is determined.
Section 2. Ten (10) days after the statement is received by Buyer, Buyer
shall make payment to Seller by wire transfer per the instruction set forth in
the Article titled "NOTICES". If Buyer disputes the amount of any statement for
any reason, Buyer shall notify Seller of such dispute and shall be obligated to
pay only the undisputed portion of such statement on the due date. Buyer shall
pay the disputed portion of the statement which is determined to be owing to
Seller within fifteen (15) days after the date the dispute is resolved, together
with interest on such amount at the rate set forth in Section 4 below,
commencing on the original due date of the statement and continuing until paid.
If the statement shall have been paid in full and it shall be determined that
such disputed portion of the statement was paid in error, Seller shall refund
such amount to Buyer, together with interest at the rate hereinafter set forth
below over the period that Seller had possession of the money, within fifteen
(15) days after resolution of the dispute.
Section 3. All statements, bills, computations and payments shall be
subject to correction of any errors contained therein until two (2) years after
date of payment, and after such period any errors found will be deemed to be
waived by the affected party.
Section 4. Any amounts due for gas delivered hereunder remaining unpaid
after the due date for such payment shall bear interest, at the lesser of the
highest lawful interest rate or the prime rate charged by Norwest Bank of Denver
plus two percent (2%), until paid.
Section 5. Each party shall have access to and the right to audit during
regular business days and business hours, upon reasonable notice, all
measurement, billing, computation and payment records maintained by the other
party which relate to the gas received under this Agreement. All records will
be maintained for two (2) years after payment has been made for the month to
which the records pertain.
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X.
QUALITY
All Sections under Article X shall be deleted in their entirety and be
replaced with the following:
Section 1. Quality shall be governed by Article IV and related provisions
of the Operating Agreement.
XI.
FORCE MAJEURE
Section 2 of Article XII shall be amended by deleting the word "telegraph"
and replacing it with the words "telefacsimile or other electronic means".
XII.
NOTICES
Under Section 1 of Article XIII, everything following the word "addresses:"
shall be deleted, and the following shall be substituted therefor:
SELLER:
Notices: Westar Transmission Company
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Gas Sales and T&E
Administration
Wire Transfer: Westar Transmission Company
Norwest Banks Colorado, N.A.
Denver, Colorado
ABA # 102 000 076
A/c # 000-0000-000
BUYER:
Notices: ENERGAS COMPANY
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Attn: Intrastate Gas Supply
Statements: ENERGAS COMPANY
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Attn: Intrastate Gas Supply
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XIII.
MAINTENANCE OF FACILITIES
Section 1 of Article XV shall be deleted in its entirety and be replaced
with the following:
Section 1. Maintenance of facilities shall be governed by Article VII and
related provisions of the Operating Agreement.
XIV.
DURATION OF AGREEMENT
Section 1 of Article XVI shall be deleted in its entirety and be replaced
with the following:
Section 1. This Agreement shall be effective as of the date hereof for
deliveries on and after January 1, 1986, and shall continue in full force and
effect until December 31, 2001; provided, that the term shall continue until
December 31, 2003 to provide backup gas service to that certain Gas Sales
Agreement entered into between KN Marketing L.P. and Energas on July 1, 1995 for
Energas' gas requirements for the Xxxxxxx/Fritch systems.
XV.
INDEMNIFICATION
Seller and Buyer hereby agree to add the following language to Article
XVII:
Section 2. In the event that deliveries to Buyer hereunder are interrupted
for any reason other than force majeure, as defined in Article XII, Section 1,
or pursuant to priority of service and curtailment standards promulgated by the
Railroad Commission of Texas, Seller shall reimburse Buyer for any out-of-pocket
expenses related to such interruption of deliveries.
XVI.
MISCELLANEOUS
Sections 3 and 5 of Article XVIII shall be deleted in their entirety and be
replaced with the following:
Section 3. [THIS SECTION LEFT INTENTIONALLY BLANK]
Section 5. [THIS SECTION LEFT INTENTIONALLY BLANK]
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XVII.
GOVERNMENTAL REGULATIONS
A new Section 3 shall be added to Article XIX as follows:
Section 3. Deliveries by Seller hereunder are subject to the curtailment
standards from time to time promulgated by the Railroad Commission of Texas (or
any successor regulatory agency) and which are applicable to Seller's
operations.
XVIII.
Buyer and Seller agree that all amendments to the Agreement entered into
between the parties between the dates January 1, 1986 and December 31, 1995, are
hereby deleted in their entirety and are no longer effective as of January 1,
1996; except for that certain amendment entitled "AGREEMENT" between Cabot Gas
Supply Corporation (CGSC) and Energas Company (Energas) dated December 9, 1988
wherein CGSC and Energas amended Section 3 of the "City Gate Rate Supply
Contract", which shall remain in full force and effect and be fully incorporated
into the Agreement. It is the intent of the parties that the Agreement, the
amendment dated December 9, 1988 entitled "Agreement", and this Amendment To Gas
Sales Agreement shall be the only three (3) documents as of the Effective Date
which reflect the agreement of the parties with respect to the matters described
herein.
Except as herein amended, the Agreement shall remain in full force and
effect in accordance with the terms thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the Effective Date.
BUYER: SELLER:
ENERGAS COMPANY WESTAR TRANSMISSION COMPANY
a division of Atmos Energy
Corporation
By: By:
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Signature Signature
Name: Name:
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Typed/Printed Typed/Printed
Title: Title:
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