EXHIBIT 10.17
Pages where confidential treatment has been
requested are stamped 'Confidential Treatment Requested.
The redacted material has been separately filed
with the Commission,' the appropriate section has
been marked at the appropriate place
and in the margin with a star (*).
CCC/WPC SERVICES AGREEMENT
BETWEEN
CHEVRON CHEMICAL COMPANY
AND
XXXXXX PETROLEUM COMPANY, LIMITED PARTNERSHIP
CCC/WPC SERVICES AGREEMENT
TABLE OF CONTENTS
-------------------
1.0 DEFINITIONS......................................... 1
2.0 SCOPE OF SERVICES................................... 3
2.1 WPC Services................................... 3
Exhibit A - WPC Services................................. 3
A-1 Motor Carrier Transportation............... 3
A-2 Ship Terminalling.......................... 3
A-3 Warrengas Terminalling..................... 3
A-4 Mont Belvieu Terminalling.................. 3
A-5 Barge Transportation....................... 3
2.2 CCC Services................................... 3
Exhibit B - CCC Services................................. 4
B-1 Export Refrigeration Equipment............. 4
B-2 Port Xxxxxx Terminalling Services.......... 4
B-3 Feedstock Pipeline Service................. 4
2.3 Management of Services...................... 4
2.4 Maintenance of Service Units and Facility... 4
2.5 New, Modified and Terminated Services....... 4
2.6 WPC Terminated Services..................... 5
2.7 Responsible Care(R)......................... 5
3.0 ADJUSTMENTS......................................... 6
3.1 Operating Adjustments....................... 6
3.2 Unit Shutdowns.............................. 6
3.3 Hardship.................................... 6
4.0 ALLIANCE IMPROVEMENT TEAM........................... 7
4.1 AIT Organization............................ 7
4.2 AIT Scope of Duties......................... 7
4.3 Planning and Budget Procedure............... 8
4.4 Information Sharing......................... 8
5.0 TERM AND TERMINATION................................ 9
5.1 Term........................................ 9
5.2 Default Procedure........................... 9
5.3 Access and Use Beyond Term.................. 9
6.0 BILLING AND PAYMENT................................. 10
6.1 Procedure................................... 10
6.2 Setoff...................................... 10
7.0 WARRANTIES AND LIABILITIES.......................... 10
7.1 Limitation of Warranties.................... 10
7.2 Limitation of Liability..................... 10
7.3 Indemnity................................... 11
8.0 CONFIDENTIALITY................................... 12
9.0 TAXES............................................. 12
10.0 FORCE MAJEURE..................................... 12
11.0 NOTICES........................................... 14
12.0 CONFLICT OF INTEREST.............................. 15
13.0 RIGHT TO AUDIT.................................... 15
14.0 INSURANCE......................................... 15
14.1 Insurance Required................................ 15
14.2 Policy Endorsements............................... 16
14.3 Evidence of Insurance............................. 16
15.0 ASSIGNMENT........................................ 16
16.0 DISPUTE RESOLUTION................................ 16
16.1 General Procedure.......................... 16
16.2 Submission to AIT.......................... 17
16.3 Mediation.................................. 17
16.4 Binding Arbitration........................ 17
17.0 COVENANTS RUNNING WITH THE LAND................... 19
18.0 FACILITY TRANSFER RESTRICTIONS.................... 19
19.0 COMPLIANCE AND AFFIRMATIVE ACTION................. 19
20.0 GENERAL TERMS..................................... 20
20.1 Integration, Amendments and Waiver......... 20
20.2 Independent Contractors.................... 20
20.3 Governing Law.............................. 20
20.4 Unenforceability........................... 20
20.5 Third-Party Beneficiaries.................. 20
20.6 Drug, Alcohol and Random Security Search... 20
20.7 Title to Products.......................... 20
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CCC/WPC SERVICES AGREEMENT
This Agreement is effective SEPTEMBER 1, 1996 ("Agreement") by and between
Chevron Chemical Company, a Delaware corporation ("CCC") and Xxxxxx Petroleum
Company, Limited Partnership, a Delaware limited partnership ("WPC").
WHEREAS, CCC's affiliate, Chevron U.S.A., Inc., ("CUSA"), and NGC Corporation,
("NGC") have entered into certain agreements (the "Merger Agreements") pursuant
to which CUSA would contribute certain gas gathering, processing and other
midstream assets and related liabilities of XXXX'x Xxxxxx Petroleum Company
division ("Xxxxxx") and natural gas business unit division to a corporation to
be formed which NGC would then be merged into (the "Merger"); and
WHEREAS, immediately subsequent to the Merger, the gas gathering, processing and
other midstream assets and related liabilities of Xxxxxx will be transferred to
WPC; and
WHEREAS, CCC and WPC desire to work together to develop a relationship sometimes
hereinafter called an alliance ("Alliance") with the goal of creating a
comprehensive, mutually satisfactory, long-term relationship to fulfill
commercial needs previously performed by and between CCC and Xxxxxx to operate
facilities previously owned and operated by each party.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereafter set forth, the Parties agree as follows:
1.0 DEFINITIONS.
The terms used in this Agreement shall have the following meanings:
1.1 "Affiliate" shall mean any Person that directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with the Person specified. The term "control" (including the terms "controlled
by" or "under common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership, by contract, or otherwise. Any
Person shall be deemed to be an Affiliate of any specified Person if such Person
owns fifty percent (50%) or more of the voting securities of such Person, or if
fifty (50%) or more of the voting securities of the specified Person and such
Person are under common control.
1.2 "Bankruptcy Event" shall mean the occurrence of one or more of the
following events with respect to a Party: (A) the entry of a decree or
order for relief against a Party by a court of competent jurisdiction in any
involuntary case brought against a Party under any bankruptcy insolvency or
other similar law (collectively, "Debtor Relief Laws") generally affecting the
rights of creditors and relief of debtors now or hereafter in effect, (B) the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar agent under applicable Debtor Relief Laws for a
Party or for any substantial part of its assets or property, (C) the ordering of
the winding up or liquidation of a Party's affairs, (D) the filing of a petition
in any such involuntary bankruptcy case, which petition remains undismissed for
a period of 180 Days or which is not dismissed or suspended pursuant to Section
305 of the Federal Bankruptcy Code (or any corresponding provision of any future
United States bankruptcy law), (E) the commencement by a Party of a voluntary
case under any applicable Debtor Relief Law now or hereafter in effect, (F) the
consent by a Party to the entry of an order for relief in an involuntary case
under any such law or to the appointment of or the taking of position by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar agent under any applicable Debtor Relief Laws for a Party or for any
substantial part of its assets or property, or (G) the making by a part of any
general assignment for the benefit of its creditors.
1.3 "Business Day" shall mean any day on which commercial banks in Houston,
Texas are open for general business.
1.4 "Cedar Bayou Plant" or "CB" shall mean CCC's chemical plant located on I-
10, Baytown, Texas.
1.5 "Fannett Terminal" or "FT" shall mean Xxxxx Refining & Marketing, Inc.'s
terminal located at Fannett.
1.6 "Mont Belvieu Terminal" or "MBT" shall mean WPC's liquid hydrocarbon salt
dome storage terminal located in Mont Belvieu, Texas.
1.7 "Party" means individually either CCC or WPC (including their respective
successors and permitted assigns); collectively, the "Parties."
1.8 "Pascagoula Refinery" or "PR" shall mean Chevron U.S.A. Inc's refinery
located in Pascagoula, Mississippi.
1.9 "Person" means any individual, corporation, partnership, limited
partnership, limited liability company, association, joint venture, trust, or
other organization of any nature or kind.
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1.10 "Port Xxxxxx Plant" shall mean CCC's facilities within Xxxxx Refinery &
Marketing, Inc.'s Port Xxxxxx, Texas refinery.
1.11 "Port Xxxxxx Terminal" or "XXX" shall mean CCC's barge loading and
unloading facility at Port Xxxxxx, Texas.
1.12 "Warrengas Terminal" or "WG" shall mean WPC's storage and marine facility
located in Galena Park, Texas.
2.0 SCOPE OF SERVICES.
2.1 WPC Services. During the term of this Agreement, WPC shall provide and
CCC shall pay for services described in the Exhibits attached and identified
below, ("WPC Services"). Except as expressly stated otherwise, WPC Services
shall be provided in accordance with the terms and conditions hereof and the
Exhibits. From time to time, the Parties may mutually agree to the addition,
deletion or modification of WPC Services by amending this Agreement and its
Exhibits. The WPC Services included on the date of this Agreement are more
particularly described in the following Exhibits:
Exhibit A - WPC Services
Exhibit Service Location
--------------- --------------------------------- --------------
A-1 Motor Carrier Transportation CB
X-0 Xxxx Xxxxxxxxxxxx XX
X-0 Xxxxxxxxx Terminalling WG
A-4 Mont Belvieu Terminalling MBT
A-5 Barge Transportation PR, PAT, WG
2.2 CCC Services. During the term of this Agreement, CCC shall provide and
WPC shall pay for services described in the Exhibits attached and identified
below, ("CCC Services"). Except as expressly stated otherwise, CCC Services
shall be provided in accordance with the terms and conditions hereof and the
Exhibits. From time to time, the Parties may mutually agree to the addition,
deletion or modification of CCC Services by amending this Agreement and its
Exhibits. The CCC
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Services included on the date of this Agreement are more
particularly described in the following Exhibits:
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Exhibit B - CCC Services
Exhibit Service Location
--------- --------------------------------- --------
B-1 Export Refrigeration Equipment WG
B-2 Port Xxxxxx Terminalling Services XXX
B-3 Feedstock Pipeline Service MBT, FT
2.3 Management of Services. Unless otherwise set forth in an Exhibit, the
Party providing a Service shall at all times have sole authority to manage,
direct and control each Service. Each Party shall, insofar as is reasonably
practicable, operate and maintain its facilities and systems, as the case may
be, in a manner that will avoid or minimize the likelihood of a disturbance
originating from its system which might cause impairment of the Services. WPC
and CCC shall promptly notify each other of any matter, notification or
occurrence of any event which could reasonably be expected to have the potential
to materially affect the Services. Each Party shall at all times comply with all
laws, ordinances, rules and regulations related to its Services, and obey all
rules and procedures established by the other Party while on the other Party's
premises whether leased or owned. Upon reasonable request for health and safety
reasons, CCC may require that WPC remove from CCC's owned or leased premises any
personnel or equipment used to provide WPC Services, and upon reasonable request
for health and safety reasons, WPC may require that CCC remove from WPC's owned
or leased premises any personnel or equipment used to provide CCC Services.
2.4 Maintenance of Service Units and Facility. Each Party shall maintain
all fixtures and equipment in all units and facilities used to provide and
deliver Services, or to receive Services, in accordance with maintenance
standards observed by such Party in its maintenance of similar active units or
facilities of comparable age and service it owns and operates in the State of
Texas; provided such standard shall at a minimum comply with such Party's
respective industry standard.
2.5 New, Modified and Terminated Services. Each Party may offer the other
Party the opportunity of providing new or modified services as operational
requirements arise. The Party receiving the offer to provide new or modified
services shall not unreasonably reject such offer. Additionally, as operational
needs for a Service cease, a Party may
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terminate a Service or a portion of the Service upon reasonable notice.
Notwithstanding the Parties intent to create a mutually beneficial commercial
relationship pursuant to this Agreement and unless otherwise provided in the
Exhibits, nothing in this Agreement shall be construed as preventing either
Party from entering into agreements with other Parties for the sale or purchase
of Services.
2.6 WPC Terminated Services. In the event Services under any Exhibit cease
to be provided for any reason other than at the end of the Term hereof or any
other reason as set forth in Section 5 hereof, the Party that originally
provided such Services (the "Service Provider") shall, subject to the Service
Provider's primary use, allow the other Party access to and the right to use any
and all required brine systems, equipment, units or other property, real or
personal, reasonably necessary to allow such other Party to obtain the benefit
of the Services previously provided by the Service Provider. All expenses and
costs related to the access and use of such systems or property by the other
Party shall be mutually agreed to by the Parties.
2.7 Responsible Care.(R)
-----------------
(a) CCC is fully committed to and shall abide by the principles of
Responsible Care(R) as espoused by the Chemical Manufacturers
Association.
(b) The Parties hereto acknowledge the importance of handling
chemical materials in a manner that will ensure the safety of
people and the protection of the environment. It is agreed that
they will use, handle, store, transport and dispose of chemical
materials in accordance with all applicable laws and regulations.
A delivering or receiving Party (in either case, herein referred
to as the "Notifying Party") shall have the right to suspend
delivery or receipt of a chemical material upon written notice to
the other Party (herein referred to as the "Notified Party") if
in the Notifying Party's reasonable judgment the Notified Party
is not complying with all such applicable laws and regulations.
Delivery or receipt of chemical material will recommence at the
time when the Notifying Party in its reasonable judgment is
satisfied that the Notified Party is in conformance with all such
applicable laws and regulations. If the Notified Party is unable
or unwilling to meet such requirements within ninety (90) days of
receipt of the Notifying Party's written notice that the
Notifying Party is suspending delivery or receipt of such
chemical materials, the
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Notifying Party shall have the right to terminate or cause to
have terminated that portion of this Agreement relating to such
chemical material.
(c) Subject to mutually agreeable times and formats, each of the
delivering and receiving Parties agrees to allow the other Party
access to its facilities from time to time to perform an on site
review to assess compliance by the other with all such applicable
laws and regulations.
3.0 ADJUSTMENTS.
3.1 Operating Adjustments. Each Party agrees to modify the terms in the
Exhibits when and to the extent that the other Party significantly changes the
operation of its facilities under this Agreement. In the event of any
operational changes, the affected Party shall be notified as soon as reasonably
possible. The Party providing Services shall, subject to the other provisions of
this Agreement, use reasonable effort to accommodate the Party needing Services
and the Parties shall cooperate to effectuate the intent of this Section. The
fees charged by the Party providing Services for Services that were changed to
accommodate the other Party shall be mutually agreed by the Parties.
3.2 Unit Shutdowns. Neither Party shall be obligated to provide or receive
Services during maintenance shutdowns of any unit to which production or use of
such Services relate, whether planned or unplanned. The AIT shall meet each year
to determine the shutdown schedule for each unit covered by this Agreement for
the following year and shall reasonably cooperate with each other in attempting
to schedule planned outages to minimize adverse impacts on each Party. At least
sixty (60) days prior to a planned shutdown, or as soon as practicable for an
unplanned shutdown, the Party shutting down a unit shall notify the other Party
of the date, anticipated duration and identification of any unit or units that
are being shutdown that will affect the ability of a Party to provide or receive
Services.
3.3 Hardship. In the event conditions change such that this Agreement
causes an economic or operational hardship to either Party, upon the written
request of either Party, CCC and WPC shall meet to renegotiate in good faith for
fairness and equity such burdensome terms and provisions. Such renegotiations
shall commence within thirty (30) days from the receipt of the written request
for such renegotiations. If the Parties are unable to agree on a resolution to
such burdensome terms
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and provisions within ninety (90) days of the non-requesting Party's receipt of
such written request, the matter shall be submitted to the dispute resolution
procedures set forth in Section 16.
4.0 ALLIANCE IMPROVEMENT TEAM.
4.1 AIT Organization. CCC and WPC agree to establish an Alliance
Improvement Team (the "AIT") to perform the duties outlined below. The AIT will
have members from both CCC and WPC. CCC and WPC shall each bear their own costs
for the AIT and AIT activities. CCC and WPC will each choose a team leader from
its own organization. These two individuals will co-chair the AIT. Each Alliance
team leader will name an alternate team leader in the event the designated
Alliance team leader is unavailable. The AIT may appoint subcommittees for
specific activities. CCC and WPC may each appoint additional members to serve on
the AIT or such subcommittees at its own expense.
4.2 AIT Scope of Duties. The duties of the AIT will be to:
(a) administer and coordinate the routine business of the Alliance
including forecasting, planning, operational, environmental,
safety, maintenance, technical and scheduling issues;
(b) determine and develop strategies with respect to Alliance
activities;
(c) develop, monitor and communicate mutually agreed to standards of
performance that serve to define each Party's contribution to the
Alliance;
(d) monitor the quality of the Services provided by each Party;
(e) review all significant equipment, design, process, and operating
changes affecting the Services;
(f) conduct regularly scheduled planning, problem solving and expense
review meetings at such periodic intervals as shall be mutually
agreed;
(g) develop Unit Shut-Down schedules pursuant to Section 3.2;
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(h) resolve disputes between the Parties in accordance with the
procedures set forth in Section 16.0;
(i) oversee efforts for long-range process improvement efforts
between CCC and WPC;
(j) review annual storage well workover requirements at Mont Belvieu
Terminal, plan the workover schedule and recommend to the Parties
commercial lease terms, if CCC is required to lease a well(s)
from WPC in order to meet the well workover plan;
(k) unless unduly burdensome on WPC, plan the supply of Services in a
manner to assist CCC in maintaining its ISO 9000 certification;
and
(l) review and approve required budgets identified in Section 4.3 for
both operating expenses and capital expenses.
4.3 Planning and Budget Procedure. The Parties shall provide each other (a)
a three-year forecast in September of every year; and (b) a three-month forecast
fifteen (15) days prior to the first day of each month with respect to the
Services that will be needed. Each Party shall make good faith forecasts for the
Services it needs under this Agreement; provided, however, that such forecasts
are for the purposes of planning and scheduling and shall not be binding on
either Party. The Parties shall also meet on a regular basis to communicate
short term operational plans. In addition, the Parties shall meet in September
of each year to review and approve operating budgets for (i) the Mont Belvieu
Terminal (excluding budget items not related to any Services); (ii)
ethylene/propylene export unit and (iii) the ethylene import unit. Such budgets
shall contain specific detail for each line item. WPC and CCC shall promptly
notify each other of any matter, notification or occurrence of any event which
could reasonably be expected to have the potential to exceed a budgeted item by
$10,000.00 or 25%, whichever is greater. Neither Party shall commit or expend
any amounts constituting capital expenses without the other Party's prior
approval. WPC shall not without CCC's prior approval, commit or expend any
single expense request, not constituting a capital expense, which will result in
an estimated charge to CCC in excess of $25,000.00, except in cases of emergency
as hereinafter described, or unless the expense is included in the approved
annual budget. In cases of emergency, WPC may, without obtaining approval of
CCC, proceed with maintenance or repair work necessary to restore the units or
equipment to operating conditions, or to
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Confidential Treatment Requested.
The redacted material has been
separately filed wth the Commission
minimize damage, or protect the public safety without regard to the limitations
set forth above. However, it is also understood that every reasonable effort
will be made by WPC to notify CCC at the earliest possible convenience of such
emergencies and expenditures.
4.4 Information Sharing. CCC and WPC will share their knowledge of
activities and trends in their lines of business which may relate to the
provision of Services pursuant to this Agreement, but specifically acknowledge
that such sharing of knowledge is subject to and limited by business, policy and
legal considerations as determined by the disclosing Party.
5.0 TERM AND TERMINATION.
5.1 Term. Unless otherwise provided herein, including any Exhibit, this
* Agreement shall remain in full force and effect for a period of REDACTED
years from the Effective Date hereof and shall continue from year to year
thereafter unless and until terminated by either Party at the end of such
* REDACTED year period or any yearly anniversary thereafter by giving the
other Party two years advance written notice of its intention to so
terminate; provided that WPC and CCC shall have the right to terminate
Services in any Exhibit at any time (i) upon ninety (90) days advance
written notice in the event CCC terminates a major portion of its operations
that necessitate the need for the Service at its Cedar Bayou Plant, Port
Xxxxxx Plant or Port Xxxxxx Terminal, (ii) WPC terminates a major portion of
its operations related to the specific Services at its Mont Belvieu Terminal
or Warrengas Terminal, or (iii) the occurrence of a Bankruptcy Event. WPC
and CCC shall have the right to terminate Services provided in any or all of
the Exhibits in the event that WPC shall not be permitted to operate or must
otherwise divest its interest in the Mont Belvieu Terminal due to
governmental or regulatory restrictions.
5.2 Default Procedure. This Agreement may be terminated by either Party
upon thirty (30) days written notice to the other Party, after it has been
determined through the dispute resolution procedures set forth in Section 16
that the other Party has materially defaulted on its obligations hereunder (it
being understood that, for purposes of the foregoing, "materially defaulted"
shall mean that the arbitrators have determined that (i) in consequence of such
default, the objectives of this Agreement
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Confidential Treatment Requested.
The redacted material has been
separately filed wth the Commission
(as expressed herein and in the Master Alliance Agreement of even date herewith
by and among Chevron, WPC and others) are not being met and (ii) the defaulting
Party, after notice and a reasonable opportunity to cure, failed to take the
steps necessary to accomplish such objectives.
5.3 Access and Use Beyond Term. The Parties acknowledge that CCC has two
(2) current contractual agreements with two (2) third Parties requiring the
need for export refrigeration Services set forth in parts of Exhibits A-2,
* X-0, X-0 and B-1 that extend beyond the REDACTED term set forth in Section
5.1. In the event that WPC is unable or unwilling to continue to provide
such export Services, WPC shall grant CCC access and use of facilities at
Warrengas Terminal and Mont Belvieu Terminal at a reasonable cost to allow
CCC to perform such Services itself.
6.0 BILLING AND PAYMENT.
6.1 Procedure. Unless otherwise provided in the Exhibits, the Parties shall
prepare each month a composite invoice for all Services rendered. The total
amount for all Services rendered and received shall be paid to WPC or CCC, as
the case may be, within ten (10) days after the date of receipt of each month's
invoice. If any of the price indices or publications referenced in this
Agreement cease to be published or if such indices or publications are changed
substantially in their method of measurement, the Parties shall substitute by
mutual agreement other indices or publications that, as closely as practical,
reflects the changes that such indices or publications measured immediately
prior to the change.
6.2 Setoff. All payments will be made without setoff or counterclaim;
provided, however, that upon a Party's (the defaulting Party) failure to make
payment of undisputed amounts on the due date, the other Party (the non-
defaulting Party) may, at its option and in its discretion, setoff against any
amounts owed to the defaulting Party any amounts owed by the defaulting Party
under this Agreement or otherwise. The obligations of the non-defaulting Party
and the defaulting Party under this Agreement in respect of such amounts shall
be deemed satisfied and discharged to the extent of any such setoff. The non-
defaulting Party will give the defaulting Party notice of any setoff made under
this
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Section 6.2 as soon as practicable after the setoff is made provided that
failure to give such notice shall not offset the validity of the setoff.
7.0 WARRANTIES AND LIABILITIES.
7.1 Limitation of Warranties. All Services shall (i) conform to all
requirements and specifications set forth in the applicable exhibit; (ii) shall
meet the generally accepted and prudent practices of the industry for such
Services; and (iii) be performed by qualified personnel in a lawful, safe,
timely and cost effective manner. All fixtures and equipment used to provide
Services shall be maintained in good operating condition and operated and
maintained in compliance with all applicable federal, state and local laws,
rules and regulations.
7.2 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES, CONTINGENT
OR PUNITIVE, INCLUDING, WITHOUT LIMITATION, LOST PROFITS INCURRED OR CLAIMED BY
THE OTHER PARTY.
7.3 Indemnity.
(a) The Party providing Services under each exhibit shall defend,
indemnify and hold harmless the other Party, its affiliates and
subsidiaries, and the officers, directors, employees and agents
of any of them (each an "Indemnitee") from and against any and
all loss, damage, injury, liability and claims thereof for injury
to or death of any person (except as provided in Section 7.3(b)
for its employees or employees of one of its contractors) or for
loss of or damage to property resulting from such Party's
performance of or failure to perform such Services. Such
indemnity shall apply whether or not an Indemnitee was or is
claimed to be passively, concurrently or actively negligent, and
regardless of whether liability without fault is imposed or
sought to be imposed on one or more of the Indemnities. This
Indemnity shall not apply to the extent that it is void or
otherwise unenforceable under applicable law in effect on or
validly retroactive to the date of this Agreement, and shall not
apply where such loss, damage, injury, liability or claim is the
result of the sole negligence or willful misconduct of an
Indemnitee.
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(b) CCC shall defend, indemnify and hold harmless WPC from and
against any and all claims relating to this Agreement for injury
to or death of an employee or representative of CCC or its
subcontractors, whether or not WPC, its employees or
representatives are claimed to be passively, concurrently or
actively negligent, and regardless of whether liability without
fault is imposed or sought to be imposed; provided this indemnity
shall not apply when such injury or death is the result of the
sole negligence or willful misconduct of WPC, its employees or
representatives.
WPC shall defend, indemnify and hold harmless CCC from and
against any and all claims relating to this Agreement for injury
to or death of an employee or representative of WPC or its
subcontractors, whether or not CCC, its employees or
representatives are claimed to be passively, concurrently or
actively negligent, and regardless of whether liability without
fault is imposed or sought to be imposed; provided this indemnity
shall not apply when such injury or death is the result of the
sole negligence or willful misconduct of CCC, its employees or
representatives.
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8.0 CONFIDENTIALITY.
During the performance of this Agreement, each Party ("Recipient") may gain
access to or possession of information belonging to the other Party ("Owner")
that is confidential (a "disclosure"). Recipient shall use such information only
for the purpose disclosed and shall use its commercially reasonable efforts to
avoid other use or disclosure of such information unless required by law or
governmental agency or consented to by its Owner, which consent shall not be
unreasonably withheld. Confidential information shall include business,
technical, personnel and other information designated as confidential, but shall
not include information that is or becomes publicly known without fault of the
Recipient, was known to Recipient or its predecessor from a source independent
of the Owner and recorded in writing prior to disclosure, was independently
developed by the Recipient, or was received by the Recipient or its predecessor
from a source independent of the Owner prior to its disclosure. All confidential
information shall be returned to its Owner upon request.
9.0 TAXES.
Any sales, use, transfer or similar taxes, now or hereafter imposed, levied
or assessed by any governmental authority directly upon the Services herein
provided for or the transfer pursuant to the terms of this Agreement of any
related materials that are the subject matter of this Agreement, shall, if
collectible or payable by the Party providing Services ("Supplier"), be paid by
the Party receiving such Services ("Recipient) on demand by the Supplier. If the
Recipient claims exemption from any of the aforesaid taxes, then the Recipient
shall furnish the Supplier with a properly completed exemption certificate. If
the Recipient holds a Texas direct payment permit, it shall issue to the
Supplier a properly completed direct payment exemption certificate and
thereafter hold harmless and indemnify the Supplier for any sales or use taxes
assessed against the Supplier by any taxing authority in respect to any taxable
sales, including the amounts of any penalties, interest and reasonable
attorneys' fees. Notwithstanding the foregoing, this Section shall not apply to
(a) income, franchise or similar taxes levied on or measured by a Party's net
income; (b) personal property taxes levied on or measured by the value of any
related materials that are the subject matter of this Agreement, to the extent
such taxes are applicable or allocable to periods in which the Supplier had
title to such related materials which were taxed.
10.0 FORCE MAJEURE.
10.1 If either Party is rendered unable, wholly or in part, by Force
Majeure to carry out its obligations under this Agreement, is agreed that upon
such
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Party's giving notice and reasonably full particulars of such Force Majeure
in writing to the other Party after the occurrence of the cause relied on, then
the obligations of the Party giving such notice, so far as to the extent that
they are affected by such Force Majeure, shall be suspended during the
continuance of any inability so caused, but for no longer period, and such cause
shall so far as possible be remedied with all reasonable dispatch. Except as
stated below, this Agreement shall not be terminated by reason of any such
cause, but shall remain in full force and effect and this Agreement shall not be
extended regardless of such curtailment or cessation. If any such cause results
in substantial interference with a Party's performance of Services and such
condition continues for six (6) months or longer, the other Party may terminate
the affected Exhibit upon sixty (60) days prior written notice. The Party not
declaring Force Majeure shall have the option to extent the Agreement for any
periods of Force Majeure.
10.2 The term "Force Majeure" as used herein shall mean acts of God,
strikes, lockouts, or other industrial disturbances, acts of the public enemy,
wars, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, tornados, hurricanes, or storms, tornado, hurricane, or
storm warnings which in any Parties' judgment require the precautionary shutdown
of either Party's facilities or any operating units thereof, floods, washouts,
arrests or restraints of the government, either federal or state, civil or
military, civil disturbances, explosions, sabotage, breakage or accident to
equipment, machinery or lines of pipe, freezing of machinery, equipment or lines
of pipe, electric power shortages, inability of any Party to obtain necessary
permits and/or permissions due to existing or future rules, orders, laws or
governmental authorities (both federal, state and local), shutdowns due to
explosion or other extraordinary incident, or any other causes, whether of kind
herein enumerated or otherwise, which were not reasonably foreseeable on the
effective date of this Agreement, and which are not within the control of the
Party claiming suspension and which such Party is unable to overcome by the
exercise of due diligence. It is understood and agreed that the settlement of
strikes or lockouts shall be entirely within the discretion of the Party having
the difficulty, and that the above requirement that any Force Majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of opposing parties when such
course is inadvisable in the discretion of the Party having difficulty. The term
Force Majeure shall also include any event of Force Majeure occurring with
respect to the facilities or services of either CCC's or WPC's third party
suppliers or customers delivering or receiving any product, fuel,
15
feedstock or other substance necessary to the performance of such Party's
obligations, and shall also include the curtailment or interruption of
deliveries or service by such third party suppliers or customers as a result of
an event of Force Majeure. It is expressly agreed by the Parties that neither
(i) CCC's inability economically to use Feedstock purchased under this Agreement
nor (ii) WPC's ability to sell Feedstock to a market at a more advantageous
price shall constitute an event of Force Majeure.
11.0 NOTICES.
Any notice required or permitted hereunder shall be in writing and shall be
deemed to be given if delivered personally; delivery by certified mail, postage
prepaid; delivered by a recognized overnight commercial carrier or telecopied
with receipt acknowledged to the following addresses:
If to WPC: XXXXXX PETROLEUM COMPANY, LIMITED PARTNERSHIP
00000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Vice President & General Manager - NGL Marketing
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Vice President & General Counsel
XXXXXX PETROLEUM COMPANY, LIMITED PARTNERSHIP
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to CCC: CHEVRON CHEMICAL COMPANY
P. O. Xxx 0000
Xxxxxxx, Xxxxx 00000
0000 XxXxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Vice President & General Manager-
U.S. Chemical Division
Telecopy: (000) 000-0000
With a copy to:
CHEVRON CHEMICAL COMPANY
16
P. O. Xxx 0000
Xxxxxxx, Xxxxx 00000
0000 XxXxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Associate General Counsel
Telecopy: (000) 000-0000
Either Party may change its notice address by notifying the other of such
change, which shall be effective fifteen (15) days after the giving of such
notice.
12.0 CONFLICT OF INTEREST.
Neither Party shall give any director, employee or representative of the
other Party any commission, fee, rebate, gift or entertainment of significant
cost or value in connection with this Agreement, or enter into any other
business arrangement with any director, employee or representative of the other,
without prior written notification to the other Party. Any representative(s)
authorized by either Party may cause an audit of any and all records of the
other Party as necessary and proper to verify that there has been compliance
with this Section.
13.0 RIGHT TO AUDIT.
Each Party shall maintain true and complete records related to the
Services and shall retain all such records for a minimum period of twenty-four
(24) months after the end of the month in which Services are performed. Either
Party, upon notice in writing to the other, shall have the right, at reasonable
hours, to audit the accounts and records relating to the accounting or billing
under the provisions of any article hereof. Except as set forth below for
matters related to CCC's third party agreements, the auditing party must make
written exception to and make a claim upon the other Party for all discrepancies
disclosed by the audit within twenty-four (24) months of the rendition of any
statement or invoice forming the basis of such claim. The requirement to make
written exceptions within said twenty-four (24) month period shall not apply to
CCC for Services relating to the third party agreements identified in Section
5.3, the time periods for which will be governed by the terms and provisions of
such third party agreements. Such audit shall be conducted by the auditing
Party's representative or auditor at the auditing Party's expense.
14.0 INSURANCE.
17
14.1 Insurance Required. CCC shall maintain during the term of this
Agreement insurance specified in Section 14.1(a) and otherwise shall maintain a
policy of self-insurance for performance under this Agreement. WPC shall
maintain during the term of this Agreement insurance specified in Section
14.1(a), (b) and (c) unless it elects to self-insure for all or any portion of
the coverage in Section 14.1(b) and (c), which it may do upon delivery of
written notice to CCC.
(a) Workers' Compensation and Employers' Liability Insurance as
prescribed by applicable law, including insurance covering
liability under the Longshoremen's and Harbor Worker's Act, the
Xxxxx Act and the Outer Continental Shelf and Land Act, if
applicable;
(b) Comprehensive or Commercial General Liability (Bodily Injury and
Property Damage) with contractual liability insurance to cover
liability assumed under this Agreement. The limits of liability
of such insurance shall not be less than $1,000,000 combined
single limit per occurrence; and
(c) Automobile Bodily Injury and Property Damage Liability Insurance,
covering non-owned and hired automobiles, the limits of which
shall not be less than $250,000 per person/$500,000 per
occurrence for Bodily Injury and $100,000 per occurrence for
Property Damage. This insurance shall extend to automobiles used
by a Party's personnel, agents or subcontractors in performance
of Services under this Agreement.
14.2 Policy Endorsements. The insurance under this Section shall provide
that a Party will receive thirty (30) days written notice prior to the
cancellation or material change of the insurance. The insurance specified under
Section 14.1(a) shall contain a waiver of subrogation against the indemnitees,
and the insurance provided under Section 14.1(b) and (c) shall name the other
Party as additional insured with respect to performance under this Agreement.
14.3 Evidence of Insurance. Each Party shall, before commencing work,
provide the other Party with certificates or other documentary evidence of the
above insurance, satisfactory to such Party.
15.0 ASSIGNMENT.
18
Neither Party shall voluntarily assign its rights nor delegate its duties
under this Agreement or an Exhibit, nor any part of such rights or duties
except to an Affiliate, without prior written consent of the other Party.
16.0 DISPUTE RESOLUTION.
16.1 General Procedure. CCC and WPC agree to utilize the procedure set
forth in this Section to resolve in good faith any dispute, controversy or claim
related to this Agreement, including any dispute over the performance, breach,
termination, interpretation, or validity of this Agreement. Nothing herein is
intended to limit the Parties from resolving informally between them any
controversy, claim or dispute that may arise and thus avoiding the necessity of
presenting such matter to the AIT.
16.2 Submission to AIT. The dispute, controversy, or claim shall first be
submitted to one representative chosen by each Party's AIT with such explanation
or documentation as the Parties deem appropriate to aid such representatives in
their consideration of the issues presented. The date the matter is first
submitted to the AIT shall be referred to as the "Submission Date." The AIT
representatives shall attempt in good faith, through the process of discussion
and negotiation, to resolve any dispute, controversy, or claim presented to it
within forty-five (45) days after the Submission Date.
16.3 Mediation. If the AIT cannot so resolve any dispute, controversy, or
claim submitted to it within forty-five (45) days after the Submission Date, the
Parties shall attempt in good faith to settle the matter by submitting the
dispute, controversy or claim to mediation within sixty (60) days after the
Submission Date using any mediator upon which they mutually agree. If the
Parties are unable to mutually agree upon a mediator within seventy-five (75)
days after the Submission Date, the case shall be referred for mediation to the
office of Judicial Arbitration and Mediation Services, Inc. ("JAMS") that is in
closest proximity to Houston, claim or controversy arose. The cost of the
mediation will be split equally between the Parties unless they agree otherwise
in writing.
16.4 Binding Arbitration.
(a) All Disputes Arbitration. All disputes between the Parties
arising under this Agreement and not resolved through negotiation
or mediation shall be submitted to arbitration in accordance with
this
19
Section 16.0 and the Parties hereby expressly waive all rights to
have any such disputes heard before a court of law, except the
right to enforce an arbitration award as described in Section
16.4 (e). Arbitration shall be governed by the Federal
Arbitration Act, 9 U.S.C. (S) 1, et seq., and not by the
arbitration acts, statutes or rules of any other jurisdiction.
(b) Procedure. In the event the Parties are unable to resolve a
dispute arising under this Agreement after exercising good faith
efforts to do so, either Party may require that the matter be
resolved through binding arbitration by submitting a written
notice to the other. The notice shall name the noticing Party's
arbitrator and shall contain a statement of the issue(s)
presented for arbitration. Within fifteen (15) days after
receipt of a notice of arbitration, the other Party shall name
its arbitrator by written notice and may designate any additional
issue(s) for arbitration. The two named arbitrators shall select
the third arbitrator within fifteen (15) days after the date on
which the second arbitrator was named. Should the two
arbitrators fail to agree on the selection of the third
arbitrator, either Party shall be entitled to request the Senior
Judge of the United States District Court of the Southern
District of Texas to select the third arbitrator. All
arbitrators shall be qualified by education or experience within
the energy industry to decide the issues presented for
arbitration. No arbitrator shall be a current or former
director, officer or employee of either Party or its Affiliates;
an attorney (or member of a law firm) who has rendered legal
services to either Party or its Affiliates, within the preceding
three (3) years; or an owner of any of the common stock of either
Party or its Affiliates.
(c) Arbitration Hearings. The three arbitrators shall commence the
arbitration hearing within twenty-five (25) days following the
appointment of the third arbitrator. The proceeding shall be
held at a mutually acceptable site in Houston, Texas. If the
Parties are unable to agree on a site, the arbitrators shall
select a site. The arbitrators shall have the authority to
establish rules and procedures governing the arbitration hearing.
Each Party shall have the opportunity to present its evidence at
the hearing. The arbitrators may call for the submission of pre-
hearing statements of position and legal authority, but no post-
hearing briefs shall be submitted. With respect to disputes
regarding price, fees, rates, indices or any redetermination,
each Party shall submit to the arbitration panel a final offer of
its proposed resolution of the
20
dispute and a majority of the arbitrators shall approve the final
offer of one Party without modification, and reject the offer of
the other Party. The arbitration panel shall not have the
authority to award punitive or exemplary damages or any type of
damages expressly waived in this Agreement. The arbitrators'
decision must be rendered within thirty (30) days following the
conclusion of the hearing or submission of evidence, but no later
than ninety (90) days after appointment of the third arbitrator.
All evidence submitted in an arbitration proceeding, transcripts
of such proceedings, and all documents submitted by the Parties
in an arbitration proceeding shall be deemed confidential
information subject to Section 8.0.
(d) Arbitration Decision. The decision of the arbitrators or a
majority of them, shall be in writing and shall be final and
binding upon the Parties as to the issue submitted. Each Party
shall bear the expense and cost of its own attorneys and
witnesses, its own arbitrator and one-half of the expense and
cost of the third arbitrator.
(e) Enforcement of Award. Judgment upon any award rendered by the
arbitrators may be entered in any court having jurisdiction. The
prevailing Party shall be entitled to reasonable attorneys' fees
in any court proceeding necessary to enforce or collect any award
or judgment rendered by the arbitrators.
17.0 COVENANTS RUNNING WITH THE LAND.
The covenants and agreements contained in this Agreement touch and concern
the land on which the Mont Belvieu Terminal and Warrengas Terminal are located,
and both the benefits and burdens thereof shall run with such land, and shall be
binding upon, and inure to the benefit of, the future owners and lessees
thereof.
18.0 FACILITY TRANSFER RESTRICTIONS.
In the event WPC desires to sell or otherwise transfer its interest in
certain assets ("Offered Interest") situated in the Mont Belvieu and/or Galena
Park area which includes either or both of the Mont Belvieu Terminal or the
Warrengas Terminal, WPC shall first notify CCC and enter into good faith
negotiations with CCC to sell the Offered Interest. If the parties are unable to
agree upon terms of sale or transfer of the Offered Interest after good faith
negotiations, WPC
21
shall have the right to sell or otherwise transfer the Offered Interest to a
third party.
19.0 COMPLIANCE AND AFFIRMATIVE ACTION.
To the extent applicable to this Agreement, both Parties shall comply with
the following clauses contained in the Code of Federal Regulations and
incorporated herein by reference: 48 C.F.R. 52.203-6 (Subcontractor Sales to
Government); 48 C.F.R. 52.219-8, 52.219-9 (Utilization of Small and Small
Disadvantaged Business Concerns); 48 C.F.R. 52.222-26 (Equal Opportunity); 48
C.F.R. 52.222-36 (Handicapped Workers); 48 C.F.R. 52.223-2 (Clean Air and
Water); and 48 C.F.R. 52-223-3 (Hazardous Material Identification and Material
Safety Data). Unless previously provided, if the value of this Agreement exceeds
$10,000, both Parties shall provide to the other Party a Certificate of Non-
segregated Facilities. Both Parties agree and covenant that none of its
employees,or employees of its subcontractors, who provide services to either
Party pursuant to this Agreement are or will be unauthorized aliens as defined
in the Immigration Reform and Control Act of 1986.
20.0 GENERAL TERMS.
20.1 Integration, Amendments and Waiver. This Agreement, integrates the
entire understanding between the Parties with aspect to the subject matter
covered. It supersedes all prior understandings, drafts, discussions or
statements, whether oral or in writing, expressed or implied, dealing with the
same subject matter. It may not be amended or modified in any manner except by a
written agreement signed by both Parties. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision (whether or not similar) nor shall such waiver constitute a continuing
waiver unless expressly provided.
20.2 Independent Contractors. The Parties shall perform all Services under
this Agreement as independent contractors. Nothing contained in this Agreement
shall be construed to create an association, trust, partnership or joint venture
or impose a trust or partnership duty, obligation or liability on or with regard
to either Party.
20.3 Governing Law. Any questions concerning the interpretation and
enforcement of this Agreement shall be governed by the laws of the State of
Texas without regard to its conflicts of law provisions.
22
20.4 Unenforceability. If any section or provision of this Agreement or any
exhibit shall be determined to be invalid by applicable law, then for such
period of time that same is invalid, it shall be deemed to be deleted from this
Agreement and the remaining portions of this Agreement shall remain in full
force and effect.
20.5 Third-Party Beneficiaries. There are no intended third Party
beneficiaries to this Agreement and nothing in this Agreement shall entitle any
person other than CCC or WPC and their respective successors and assigns
permitted hereby to any claim, cause of action, remedy or right of any kind.
20.6 Drug, Alcohol and Random Security Search. In performing Services under
this Agreement, each Party agrees to abide by and require all of its employees
and contractor's to abide by the other Party's drug, alcohol and random security
search policy.
20.7 Title to Products. Title to all products shall at all times remain
with the Party requesting Services and such Party shall have the right at all
times to remove such products and/or transfer title and possession to others.
The Party having custody of any products waives any warehousemen or materialmen
liens related to the products.
20.8 Recording. WPC shall execute in recordable form a memorandum or
extract of this Agreement necessary to permit CCC to effectuate its interest
under Sections 5.3, 17 and 18.
23
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
duly authorized representatives as of the date first set forth above.
XXXXXX PETROLEUM COMPANY, CHEVRON CHEMICAL COMPANY
LIMITED PARTNERSHIP
By: XXXXXX PETROLEUM G.P., INC.
Sole General Partner
By: By:
---------------------------------- ---------------------------
Title: Title:
------------------------------- ------------------------
24
EXHIBIT A-1
Motor Carrier Transportation
1.0 Scope of Services.
1.1 WPC agrees to provide motor vehicle equipment which meets all U.S.
Department of Transportation standards and is safe, complete and efficient for
the performance of its transportation obligations under this Agreement. WPC
agrees to accept CCC's shipments of products at the locations identified in
Section 2.0 and upon receipt of the such products, WPC will transport such
products with reasonable dispatch and deliver them in like good order and
condition to the location designated by CCC and will provide specialized
transportation services as mutually agreed between WPC and CCC.
1.2 The parties agree that the transportation provided under the terms of
this Agreement is on a non-exclusive basis and WPC may commingle CCC's freight
with other freight received from customers not party to this Agreement so long
as commingling does not affect product quality or product value. CCC is not
precluded from using the services of other carriers under this Agreement.
1.3 All obligations to tender shipment or ship products shall be on a non-
exclusive basis and the Parties are not obligated to tender a shipment or ship
products unless mutually agreed.
1.4 WPC authorized CCC or its authorized agent to reposition trailers
assigned to CCC facilities for the purpose of loading and unloading provided CCC
shall be responsible for any liability related to such repositioning and will
indemnify and hold harmless WPC, its Affiliates and the officers, directors,
employees and agents of any of them from and against any and all loss, damage,
injury, liability and claims for injury to or death of any person or for loss or
damage to property resulting from the repositioning of trailers by CCC.
1.5 WPC is responsible for filing, when applicable, a copy of this
Agreement with the appropriate regulatory agencies within the period of time
provided by law.
2.0 Product and Volume.
-1-
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
Chevron shall tender to WPC a series of shipments which constitute a
portion of its estimated requirements as set forth below:
Product Origin Estimated Volume
--------------------- ----------------- ----------------
Lime St. Xxxxxxxxx, MO 0 - 22 MMLBS
Butane CB-Baytown, TX 0 - 4 MMLBS
HAD CB-Baytown, TX 0 - 2 MMGAL
Naphtha CB-Baytown, TX 0 - 120 MMLBS
Polyethylene CB-Baytown, TX 0 - 41 MMLBS
Wax CB-Baytown, TX 0 - 55 MMLBS
Light Petroleum Oil CB-Baytown, TX 0 - 3.6 MMGAL
3.0 Rates.
* 3.1 CCC shall pay WPC a flat rate of REDACTED for all truck load
shipments of lime product from St. Xxxxxxxxx, Missouri to Belle Xxxxxx,
Louisiana (Oak Point).
3.2 WPC shall transport products, other than lime, at WPC rates shown based
upon mileage between origins and destinations as provided in Appendix A. Rates
include pump and hose charges. Tank cleaning charges will be invoiced to CCC at
WPC's cost.
3.3 This Agreement applies to prepaid shipments originating at, and collect
shipments destined to the facilities or customers of CCC. This Agreement will
also apply to third-party shipments in which CCC is responsible for the freight
charges.
3.4 CCC will make payment of invoices submitted by WPC to CCC within thirty
(30) days of receipt. Invoices shall be accompanied by substantiating
documentation reflecting the service provided and the charges therefor. The
provisions of Ex Parte Order No. MC-1 of the Interstate Commerce Commission are
not part of this Agreement.
The provisions of this Agreement shall apply on shipments returned to the
original shipping point by a reverse route, including those shipments
-2-
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
refused or rejected, and the rates shall be no higher than the rates for
outbound movement.
* 3.5 Demurrage shall accrue at a rate of REDACTED per fifteen (15) minutes
or a fraction thereof after two (2) hours free time for loading or
unloading, unless amended for a specific load.
4.0 Rate Adjustments.
WPC has the right to change at any time the price or freight allowance
specified herein, provided WPC has given CCC at least thirty (30) days written
notice of such change prior to the effective date of such change. CCC's failure
to serve WPC with written notice of objection shall be considered acceptance of
such change. If such written notice of objection is served by CCC, WPC has the
option to continue to provide Services hereunder at the same fee and terms as
were in effect at the time WPC gave notice of such change and thereafter resolve
the issue by the dispute resolution provisions in Section 16.
5.0 Term.
* The Services covered in this Exhibit shall be effective for REDACTED from
the effective date of this Agreement and shall continue in effect thereafter
unless and until canceled by either Party by giving the other Party one
hundred eighty (180) days advance written notice of the termination date.
6.0 Emergency Response.
WPC agrees that it has, or is developing, a written emergency response plan
and procedure. The plan takes into account the nature of the materials to be
shipped under this contract. WPC has provided, or will provide, a copy of WPC's
emergency response plan to CCC upon request.
7.0 Risk of Loss.
CCC shall retain risk of loss for all of its products except for loss
relating to negligent acts or omissions by WPC, its employees, contractors or
agents which shall be the responsibility of WPC.
-3-
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
EXHIBIT A-2
Ship Terminalling
8.0 Scope of Services.
WPC shall operate, maintain and provide qualified personnel for the dock
facilities at the Warrengas Terminal and coordinate the scheduling for CCC
shipment of the following products and other products, upon mutual
agreement, as follows:
Product Estimated Annual Volume
------- -----------------------
Ethylene Imports (C=2) 0 - 800 MMLBS
Ethylene Exports (C=2) 0 - 200 MMLBS
Propylene Exports (C=3) 0 - 000 XXXXX
Xxxxxxx/Xxxxxxxxxx Xxxxxxx 0 - 0 XXXXXX
9.0 Hours of Operation.
Upon reasonable notice, WPC will provide Services at the dock facilities 24
hours a day, 7 days a week, including holidays, for the receipt and/or delivery
of products.
10.0 Fees.
10.1 Ethylene Import (C=2). Unloading fees for ethylene imports and
transfer into CCC's ethylene pipeline will consist of the following components:
* REDACTED
--------
* Total Throughput REDACTED
---------------- --------
* O - 110 MMLBS/year REDACTED
* 110 - 220 MMLBS/year REDACTED
* 220 - 330 MMLBS/year REDACTED
* Over 330 MMLBS/year REDACTED
-4-
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
Repair and maintenance expenses shall be at cost as set forth in the ethylene
import unit budget.
10.2 Ethylene Export (C=2) and Propylene Export (C=3). Loading fees for
ethylene and propylene exports from CCC's ethylene and propylene pipe lines
shall consist of the following components:
* (a) Monthly charge of REDACTED.
(b) Electrical expenses and repair and maintenance expenses at cost
as set forth in the required Ethylene/Propylene Export unit
budget.
* (c) Berth charge of REDACTED per hour. This berth charge shall not
apply to vessels that are undergoing conditioning.
10.3 Naphtha/Condensate Imports. Unloading of naphtha imports and
delivery by WPC pipeline into CCC's designated well at Mont Belvieu's
* Terminal shall be charged a fee of REDACTED.
11.0 Fee Adjustments.
11.1 The Base Rates in Section 3.1 shall be adjusted by the following
factors:
(a) Electrical Factor. .05 c/lb of the Base Rate is electrical power
related and will be escalated at the beginning of each calendar
quarter to reflect actual unit electrical power costs to the
Warrengas Terminal for the previous quarter. The base for fourth
quarter 1988 will be 6c per kilowatt hour (kwh). (Example: if
unit power costs at the Terminal in the first quarter 1990 are
12c/kwh, the payments in Section 3.1 will reflect an added cost
of 0.05c/lb for second quarter 1990.)
(b) Fuel Factor. .05 c/lb of the Base Rate is fuel gas related and
will be escalated at the beginning of each calendar quarter to
reflect actual unit fuel gas costs to the Warrengas Terminal for
the previous quarter. The base for fourth quarter 1988 will be
$1.50/million British Thermal Unit (MBTU). (example: if unit
fuel gas costs at the Terminal in first quarter 1990 are
$3.00/MBTU,
-5-
the payments in Section 3.1 will reflect an added cost of
0.05c/lb for second quarter 1990.)
(c) Inflation Factor. The Base Rate except for the 0.1c./lb portion
of the Base Rate identified in Sections 4.1(a) and 4.1(b) shall
be escalated at the beginning of each year to reflect the change
in the Non-Farm Business Implicit Price Deflator (NFBIPD)
published by the U.S. Department of Labor (i.e. the costs for
1995 for the first 55 million pounds will be increased by
0.004c/lb if the 12-month average of the NFBIPD increases by one
percent (1%) from 1988 to 1994).
11.2 The monthly charges in Section 3.2 (a) and (c) shall be adjusted on
January 1 of each year, using the Houston Consumer Price Index (CPI) as compared
to the base index on January 1, 1996. The fee and adjustments in Section 3.2
and 4.2 shall be changed to a commercial based fee within the first six (6)
months of this Agreement.
11.3 For the fees specified in Section 3.3, each party shall have the right
to request a change in the fee at any time during the term covered by this
Agreement, provided it gives the other party at least 90 days written notice of
such change. The failure of the notified party to serve the other party with
written notice of objection thirty (30) days prior to the effective date shall
be considered acceptance of such change. If written notice of objection is
served, the notifying party shall have the right to continue to provide Services
under this Exhibit at the same price and terms in effect at the time it gave
notice of the requested change or resolve the issue by the dispute resolution
provision in Section 16.
12.0 Risk of Loss.
CCC shall retain risk of loss for all of its products except for loss
relating to negligent acts or omissions by WPC, its employees, contractors or
agents which shall be the responsibility of WPC.
13.0 Demurrage.
Each Party shall be responsible for its demurrage, except for claims
attributable to the other Party's, or its employee's contractor's or agent's
negligent acts or omissions or for encroachment by the other Party on the
loading or unloading schedule as provided for in Section 7.0.
14.0 Scheduling.
-6-
The Parties agree that CCC shall have access to Dock 1 for up to 70% dock
utilization on a monthly basis. Scheduling for ship movement of products shall
be made through the logistics specialist at WPC's Warrengas Terminal. WPC shall
load and unload vessels at the docks in order of their scheduled arrival.
Neither Party shall be restricted to its utilization percentage if the other
Party is not using Dock 1. Breadth interference between Docks 1 and 2 shall be
taken into account when either Party schedules activity for Docks 1 and 2.
-7-
Exhibit A-3
Warrengas Terminalling
15.0 Scope of Services.
15.1 WPC shall provide transfer, storage and other terminalling services at
the Warrengas Terminal including barge, truck and pipeline receipt and delivery.
WPC shall operate for the benefit of both parties the flare system including the
processing of relief gasses and liquids.
15.2 WPC shall operate, maintain and provide qualified personnel for the
tank storage and dock facilities at the Warrengas Terminal to service CCC's
shipment requirements estimated as follows:
Product Estimated Annual Volume
------- -----------------------
Propane - Propylene Mix (PPmix) 0 - 1.0 MMBBLS
Crude Butadiene (CC4) 0 - 1.5 MMBBLS
Crude Isoprene (C5) 0 - 500 M BBLS
Heavy Aromatic Distillate (HAD) 0 - 550 M BBLS
Ethylene (C=2) (Truck Unloading) 0 - 4000 MT
15.3 WPC shall provide access to and permit Chevron Pipeline Company
("CPL") to use the flare system and will supply instrumentation air,
electricity, and any other utilities reasonably required by the Chevron Pipeline
Company pipeline system within the Warrengas Terminal.
16.0 Hours of Operation.
Upon reasonable notice to WPC, the tank storage and dock facilities shall
remain operational twenty-four (24) hours a day, seven (7) days a week,
including holidays, for the receipt and/or delivery of products.
-8-
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
17.0 Fees.
17.1 Propane - Propylene Mix. Unloading PPmix from barges and
transporting by pipeline by WPC to a well owned or leased by CCC at Mont
* Belvieu Terminal shall be charged at a fee of REDACTED.
17.2 Crude Butadiene Transporting CC4 from CCC's Cedar Bayou Plant by WPC
pipeline to Warrengas Terminal, storage in a dedicated tank (currently
designated as Tank 58) and loading product onto barges shall be charged at a
* fee of REDACTED.
17.3 Crude Isoprene. Transporting C5 from CCC's Cedar Bayou Plant by WPC
pipeline to Warrengas Terminal, storage and loading product onto barge, tank
trucks or into pipeline at a fee to be agreed upon by the parties in good
faith negotiation as such may be required in the future.
17.4 Heavy Aromatic Distillate. Transporting from CCC's Cedar Bayou
Plant by pipeline and re-delivery of HAD to the GATX Terminal shall be
* charged at a fee of REDACTED.
17.5 Ethylene Receipts (C=2. Receipt and unloading of tank trucks
* and transfer to CCC pipeline at a fee of REDACTED.
17.6 Flare System. WPC shall pay for all costs associated with the normal
operation and maintenance of the flare system and associated relief systems,
except for repair and maintenance associated with the ethylene and propylene
flare piping associated with dock 1 equipment which shall be paid for by CCC.
17.7 Chevron Pipeline System. There shall be no separate charges for
Services provided under Section 1.3 so long as CPL's use of the flare system
and instrumentation air, electricity and other utilities is nominal. In the
event CPL's use is more than nominal, the Parties shall agree upon associated
costs and fees.
18.0 Fee Adjustments.
18.1 Each party shall have the right to request a change in the fees in
Section 3.0 at any time during the term covered by this Agreement, provided
it
-9-
gives the other party at least ninety (90) days written notice of such change.
The failure of the notified party to serve the other party with written notice
of objection thirty (30) days prior to the effective date shall be considered
acceptance of such change. If written notice of objection is served, the
notifying party shall have the right to continue to provide Services under this
Agreement at the same fee and terms in effect at the time it gave notice of the
requested change and thereafter resolve the issue by the dispute resolution
provision in Section 16.
19.0 Storage Tanks.
19.1 WPC will operate and maintain storage tanks 58, 59, 60 and W-20 for
designated CCC product storage of CC4 and C5 products.
19.2 WPC shall be responsible for obtaining and maintaining all operating
permits required for the tanks.
19.3 Tanks 58, 59, 60 and W-20 (or in the alternative to W-20, Tanks W-1
or W-2, if mutually agreed to by the Parties) shall be dedicated exclusively to
CCC products so long as CCC has requirements for C5 and CC4 or similar product
through put, provided, CCC shall have exclusive use of W-20 for C5 service until
December 31, 1996. CCC agrees to release the tanks for WPC's use when it no
longer has any requirements for C5 and CC4 or similar product throughput, but
shall retain an option to reinstate such use of any or all of the tanks upon one
(1) year's prior written notice to WPC.
19.4 CCC shall have the option to obtain mutually agreed upon storage
service at Warrengas Terminal for HAD storage, HPG storage or other product
storage for CCC's future terminalling requirements at Warrengas Terminal.
20.0 Risk of Loss.
CCC shall retain risk of loss for all of its products except for loss
relating to negligent acts or omissions by WPC, its employees, contractors or
agents which shall be the responsibility of WPC.
21.0 Scheduling.
All pipeline movements from Cedar Bayou to Warrengas Terminal shall be
scheduled through the WPC dispatching office at Mont Belvieu Terminal. All
truck, pipeline or marine movements into or out of Warrengas Terminal shall be
-10-
scheduled through the WPC logistics specialists at Warrengas Terminal. CCC and
WPC shall make dock reservations on a first come/first serve basis and WPC shall
provide a dock schedule to CCC every Business Day.
22.0 Demurrage.
Each Party shall be responsible for its demurrage, except for claims
attributable to the other Party's, or its employee's, contractor's or agent's
negligent acts or omissions or for encroachment by the other Party on the
loading or unloading schedule as provided for in Section 7.0.
-11-
Exhibit A-4
Mont Belvieu Terminalling
23.0 Scope of Services.
23.1 WPC shall provide transfer, storage and other terminalling services
at the Mont Belvieu Terminal including rail, truck and pipeline receipt and
delivery of CCC's products, other than LPG feedstocks which are covered under
another agreement. WPC shall operate six (6) storage xxxxx for CCC activities,
the tank car rack and CCC pipeline connections at Mont Belvieu Terminal. WPC
shall operate and maintain for the benefit of both parties the flare system used
for the processing of relief gasses and liquids.
23.2 WPC shall provide access to and permit Chevron Pipeline Company
("CPL") to use the flare system and will supply instrumentation air, electricity
and any other utilities reasonably required by the Chevron Pipeline Company
pipeline system within the Mont Belvieu Terminal.
23.3 WPC shall provide necessary improvements at the Mont Belvieu Terminal
to support CCC's 3 QTR 97 Port Xxxxxx Plant Expansion ("Mont Belvieu
Improvements"). Improvements include, per mutually agreed to scope of work for
the project, in-terminal piping changes, installation of mainline pumps and
metering facilities. The expansion requires 30 MBPD of incremental EP supply (in
blends ranging from 80/20 to 60/40). The total supply of EP to Port Xxxxxx will
be approximately 55 MBPD post start-up.
24.0 Fees.
CCC shall pay fees to WPC for all directly attributable expenses to
dedicated facilities (e.g., CCC well workover cost) plus a portion of the cost
of facilities that are operated for the benefit of both WPC and CCC consisting
of the following:
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Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
24.1 Mont Belvieu Salaries, Wages and Benefits.
Allocation %
WPC Chemicals
-------- ---------
* Managers and Staff REDACTED REDACTED
* Mechanics REDACTED REDACTED
* Technicians and Engineers REDACTED REDACTED
* Clerical REDACTED REDACTED
* Operations REDACTED REDACTED
* Contract REDACTED REDACTED
24.2 Travel and Expense Accounts, Schools and Other Personnel Costs.
When applicable, expenses shall be charged to party requiring the
expenditure. Travel to and from schools shall be charged on the same percentages
as the individual's salary is charged.
24.3 Water, Consumable Supplies, Personal Services, Communications, Work
Contracts, Security, Repairs and Maintenance.
Expenses that are for the exclusive benefit of CCC or its xxxxx and
equipment shall be charged to CCC. Expenses at Mont Belvieu Terminal for the
brine system, security, roads and other joint benefit facilities shall be
allocated based on the number of xxxxx owned or leased by the parties.
* Expenses for the truck dock shall be allocated REDACTED to CCC and REDACTED
to WPC.
24.4 Fuel and Power.
At WPC's cost, CCC shall be charged for fuel and power consumed in
operating their dedicated equipment. Also, at WPC's cost, CCC shall be allocated
fuel and power expense for brine pumps, tank car rack, air system, lighting or
other joint benefit facilities based on horsepower involved or the number of
xxxxx owned or leased by the parties, as appropriate.
24.5 Intangible Overhead.
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Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
* Base fee of REDACTED M/YR.
24.6 Flare System.
All direct costs associated with the operation and maintenance of the
Flare System and associated relief systems shall be allocated on the basis of
well count.
24.7 Chevron Pipeline System.
There shall be no separate charges for services provided under Section 1.2
so long as CPL's use of the flare system and instrumentation air, electricity
and other utilities is nominal. In the event CPL's use is more than nominal, the
Parties shall agree upon associated costs or fees.
24.8 Improvements for Port Xxxxxx Plant Expansion.
* Based upon estimated cost of REDACTED for the Mont Belvieu Improvements,
CCC shall pay to WPC the following fees after start-up of Mont Belvieu
Improvements:
* (a) Throughput fee of REDACTED.
* (b) Additional fee of REDACTED for the first five (5) years of
operation invoiced monthly at a rate expressed in cents per
barrel of throughput. This rate shall be set at the beginning of
each year of operation and shall be revised as necessary during
each year to correspond to the estimated throughput remaining for
such year so that the total payment for each year of operation
shall equal $1 MM. Any imbalances in payments shall be
reconciled at the end of each year.
This fee shall be adjusted in the event the estimated cost of the
project changes.
25.0 Engineering, Design and Construction Services.
Engineering, design and construction services will be provided in
accordance with the annual budget of the Alliance Improvement Team and the
allocation of
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Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
services will be on a project by project basis according to resources, timing
and complexity of any project.
26.0 Price Adjustments.
26.1 The percentage allocation rates and budget for the fees in Sections
2.1 and 2.3 shall be made or adjusted by mutual agreement, as part of the annual
planning process and, if the parties are unable to agree, by the dispute
resolution provision under Section 16.
26.2 The intangible overhead rate under Section 2.6 shall be adjusted on
January 1 of each year beginning January 1, 1997 using the Houston Consumer
Price Index as compared to the base index of 140.9 for December, 1995.
27.0 Option to Reasonably Expand Operations.
Subject to availability and WPC's use of the Mont Belvieu Terminal, CCC
shall have an option to reasonably expand its operations and facilities at the
Mont Belvieu Terminal, including pipeline additions and easements through the
terminal at locations mutually acceptable to WPC and CCC, and lease additional
storage space from WPC at mutually agreeable terms and conditions locations.
28.0 Pipeline Access.
Upon reasonable request, CCC shall have a non-exclusive right of access to
pipelines and operating equipment in the Mont Belvieu Terminal for the movement
of non-LPG products into CCC xxxxx from sources such as the Xxxx-Xxxxxxxx,
Citgo-Lakemont pipelines or future identified third parties satisfying
requirements of CCC.
This pipeline access shall be scheduled through Mont Belvieu Terminal
* dispatching and CCC shall pay WPC a handling fee of REDACTED.
29.0 Temporary Storage.
Upon reasonable notice, WPC agrees to provide to CCC temporary well
storage for PPmix and Naphtha during any periods of time that CCC may reasonably
require for maintenance or workover on its xxxxx. CCC shall pay WPC a fee for
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such temporary storage equal to the spot short term commercial rate for storage.
30.0 Risk of Loss.
CCC shall retain risk of loss for all of its products except for loss
relating to negligent acts or omissions by WPC, its employees, contractors or
agents which shall be the responsibility of WPC.
31.0 Demurrage.
Each Party shall be responsible for its demurrage except for claims
attributable to the other Party, or its employee's, contractor's or agent's
negligent acts or omissions.
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Exhibit A-5
Barge Transportation
1.0 Scope of Services.
1.1 WPC shall provide barge transportation services to CCC for the
transport of propane-propylene mix ("Product") from the Pascagoula Refinery to
the Port Xxxxxx Terminal or Warrengas Terminal as designated by CCC. WPC shall
provide the Natchez and Comanche, nominal 30 MBBL barges, to perform such
service and will use all reasonable efforts to provide other barges as may be
necessary to transport Product. WPC shall have the right to substitute barges
for the Natchez and Comanche for commercial reasons provided such substituted
service does not adversely affect CCC, including, but not limited to, effects
increasing costs, modifying operating requirements or causing the loss of
Product heel on a barge. In addition, WPC shall have the right to substitute
barges for the Natchez and Comanche as may be required for repair, maintenance
and governmental regulation.
1.2 CCC and WPC shall notify each other of any shutdowns, downtime,
maintenance or other planned or scheduled events that may disrupt the need for
or the ability to provide barge transportation services.
1.3 WPC shall use all reasonable efforts to make available such additional
barges from its own fleet that are needed to transport CCC Product so long as
WPC's commercial operations are not economically adversely affected. In the
event such additional barges are not available from WPC's fleet, WPC shall
charter, with prior notice to and consent from CCC, such additional barges as
may be necessary to transport CCC Product.
1.4 WPC shall have no obligation to replace or repair either the Natchez or
Comanche in the event one or both of them are damaged beyond economical repair
or go beyond their useful life. If either the Natchez or Comanche are
significantly damaged requiring substantial repair other than normal repair, WPC
shall have the right to invoke the hardship provisions of Section 3.3 of the
Services Agreement.
1.5 No barges shall be tendered to CCC (i) that transported a last known
cargo other than propane, propylene, isobutane, normal butane or mixtures of
such products, or (ii) known by WPC to contain an excess heel. Prior to arrival
at Pascagoula Refinery, WPC shall notify CCC of the
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last known cargo of all barges that transported a cargo other than Product. If
WPC satisfies the above conditions, WPC shall have no liability for
contamination resulting from the heel in such barges.
1.6 WPC shall tender the Natchez and Comanche with tanks sufficiently clean
and suitable for loading Products and to prevent contamination of Product. No
backhauls shall be made on the Natchez or Comanche other than propane or
Product. WPC shall compensate CCC for the loss of any heel in the barge
resulting from such backhaul.
1.7 The obligations to allow access for WPC terminated services under
Section 2.6 of this Service Agreement shall not apply to this Exhibit.
2.0 Product and Volume.
2.1 CCC agrees to tender and WPC agrees to transport up to 6.5 MBBLS per
day on a yearly average basis of propane-propylene mix ("Product(s)") from the
Pascagoula Refinery to the Port Xxxxxx Terminal or Warrengas Terminal. WPC shall
use all reasonable efforts to transport volumes of Product in excess of 6.5
MBBLS.
2.2 In the event CCC's liftings average less than 2.25 MBBLS per day for a
full calendar year, CCC shall have the option to terminate the payment of the
deficiency fee under Section 3.5 by giving WPC written notice at any time on or
before January 31 of the following year specifying the termination date of the
fee that shall be at least 30 days after the date of the notice but before the
end of that calendar year. Upon receipt of such notice by WPC, WPC's obligation
to transport Product shall be reduced to 3.25 MBBLS per day and WPC shall have
the option to terminate this Exhibit by giving CCC written notice on or before
30 days after receipt of CCC's notice of WPC's election to terminate this
Exhibit, which shall be effective on the date specified by CCC as the
termination date for the deficiency fee.
3.0 Rates.
3.1 For all large tows (nominal 30 BBL barges) owned by or under long term
charter to WPC, CCC shall pay WPC 4.69 cpg for all shipments to Port Xxxxxx
Terminal and 5.35 cpg for all shipments to Warrengas Terminal.
3.2 For all small tows (less than nominal 30 BBL barges) owned by or under
long term charter to WPC, CCC shall pay WPC 5.33 cpg for all
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shipments to Port Xxxxxx Terminal and 6.16 cpg for all shipments to Warrengas
Terminal.
3.3 For barges other than those owned by or under a long term charter to
WPC, if WPC charters barges from a third party to satisfy CCC's needs, CCC shall
pay WPC actual cost (including, without limitation, tankerman charges, flaring
costs if necessary, port fees and time charter fees) plus six percent (6%).
3.4 CCC shall pay for all tankerman's charges for unloading at the Port
Xxxxxx Terminal.
3.5 Unless caused by Force Majeure, if CCC's average daily liftings are
less than 5.5 MBBLS per day for a calendar quarter, CCC shall pay WPC a
deficiency fee based on the following:
Actual Lifting ("X" in MBBL/day) Deficiency Fee
-------------------------------- --------------
X ) 5.5 0
-
2.25 (Pounds) ( X ( 5.5 (5.5-X) x 4.69 cpg
-
X ( 2.25 (2.25 x 2.76 cpg)
+(2.25-X) x 4.69 cpg
X = 0 5.5 x 2.76 cpg
The deficiency fee shall be offset by all charter revenue generated
and any credit for WPC use based upon a rate agreed to by the parties.
3.6 In the event WPC provides substituted barges for the Natchez or
Comanche, CCC shall pay for barge service at the rates set forth in
Section 3.1. If barges are substituted due to repair, maintenance or
governmental regulation, WPC shall not be liable to CCC for loss of
Product heel.
4.0 Rate Adjustment.
4.1 The rate specified in Sections 3.1 and 3.2 shall be adjusted on
January 1 of each year beginning January 1, 1997 based upon the rate
adjustment formulas specified in Sections 4.2 and 4.3 using a base
rate of January 1, 1996. Temporary economic hardship that
significantly impacts expenses not associated with normal operating
conditions such
-19-
as major lock delays, barge sinking in the Intercostal Canal or major
weather problems may be addressed by the effected party under Section
3.3 of the Services Agreement.
4.2 The rates in Section 3.1 shall be calculated in accordance with the
following formula:
Rate (cpg) =[(2xTUG+BR30+2xBR16)x(TRIPTIME)+2(PF+TK)]x100
----------------------------------------------
(2)x(27360 BBLS)x(42gal/BBL)
Where:
TUG = The day rate for the 1200 HP tug. The January 1, 1996 rate is
$2,073/day including insurance, fuel and Inland Waterway Fuel Use Tax
of 23 cpg effective 1/1/94. (1/1/96 - $2,073)
BR30 = Term lease rate for a 30 MBBL barge, plus incremental costs
associated with a fully found barge charter. (1/1/96 - $2,744)
BR16 = Term lease for a 16 MBBL barge, plus incremental operating
costs associated with a fully found barge charter. (1/1/96 - $1,644)
PF = Pascagoula port fee of $137.50/barge effective 5/1/95. Add
$10/barge for shipments to Warrengas Terminal. (1/1/96 - $138)
TK = Tankerman charge at Pascagoula for first 8 hours. (1/1/96 -
$289)
TRIPTIME = 10.5 days for shipments to Port Xxxxxx Terminal and 12 days
for shipments to Warrengas Terminal.
The rate is based on a ninety percent (90%) load of 27,360 BBLS for the
Natchez and Comanche.
4.3 The rates in Section 3.2 shall be calculated in accordance with the
following formula:
Rate (cpg) =[(TUG+BR16)x(TRIPTIME)+PF+TK]x100
---------------------------------
(14400 BBLS)x(42 gal/BBL)
TUG = The day rate for the 800 HP tug. This includes increases due to
insurance, fuel and the Inland Waterway Fuel Use Tax of 23.4 cpg
effective 1/1/94. (1/1/96 - $1,702)
-20-
BR16 = Term lease for a 16 MBBL large plus incremental operating costs
associated with a fully found barge charter. (1/1/96 - $1,644)
PF = Pascagoula port fee of $137.50/barge effective 5/1/95. Add
$10/barge for shipments to Warrengas Terminal. (1/1/96 - $138)
TK = Tankerman charge at Pascagoula for first 8 hours. (1/1/96 -
$289)
TRIPTIME = 9.5 days for shipments to Port Xxxxxx Terminal and 11 days
for shipments to Warrengas Terminal.
The rate is based on a ninety percent (90%) load of 14,400 BBLS.
4.4 Every two (2) years after the Effective Date of the Services
Agreement, the parties shall have the option to open this Exhibit
solely for the purpose of renegotiating the rate formulas set forth in
Sections 4.2 and 4.3. To exercise such option, a party at least
ninety (90) days before the expiration of such two (2) year period
must provide to the other party written notification of its desire to
renegotiate the formulas. If, after negotiating in good faith for a
period of ninety (90) days following the date of the renegotiation
notice, the parties are unable to agree upon a new formula, the matter
shall be resolved in accordance with the dispute resolution procedure
in Section 16.0 of the Services Agreement. During the period while
negotiations are ongoing the formulas that were in effect on the date
of the renegotiation notice shall continue to apply until new formulas
are determined. If a new formula is agreed to or established through
the dispute resolution procedures, the fee for such services shall be
adjusted retroactively to the expiration date of the prior two (2)
year period.
5.0 Term.
Notwithstanding the provisions specified in Section 5.0 of this Services
Agreement, the services covered in this Exhibit shall terminate (i)
effective August 31, 1998 in the event WPC does not exercise its call
option as specified in Section 8.2 of that certain Limited Liability
Company Agreement between Chevron U.S.A., Inc. and Xxxxxx Petroleum
Company, Limited Partnership, (ii) upon damage beyond economic repair or
expiration of the useful life of the barges Natchez or Comanche or (iii) as
provided in Section 2.2 of this Exhibit.
6.0 Lifting Schedule.
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On or before the 15th day of each month CCC shall notify WPC of its
nomination for Product volume to be lifted during the following month. The
two (2) day lifting window shall be finalized three (3) days prior to the
beginning of the proposed two (2) day window unless otherwise agreed. WPC
shall notify CCC daily of the position of the barges in service and the
estimated time of arrival for barges at the loading and discharge ports.
7.0 Risk of Loss.
CCC shall retain risk of loss for all of its Products except for loss
relating to gross negligence or wilful misconduct by WPC, its employees,
contractors or agents which shall be the responsibility of WPC.
8.0 Demurrage.
8.1 Laytime allowed for loading at the Pascagoula Refinery shall be 24
hours and for unloading at the Port Xxxxxx Terminal shall be 30 hours.
Laytime shall commence at the time of barge arrival, if the barge
arrives within the two (2) day lifting window, at the beginning of the
lifting window if the barge arrives earlier than the agreed window, or
ten (10) hours after arrival if the barge arrives later than the
agreed window. Laytime for either the Natchez or Comanche shall not
commence until at least sixty (60) hours after the commencement of a
Product lifting from the other barge. There shall be no demurrage for
laytime at Warrengas Terminal.
8.2 Demurrage shall be paid at a rate of $210/hour for tows under Section
3.1, and $149/hour for tows under Section 3.2, provided a claim with
an invoice and supporting documentation is made within ninety (90)
days from the date of completion of discharge of the Product. All
invoices for demurrage shall include supporting documentation
consisting of barge logs and time calculations.
9.0 Barge Condition.
All barges furnished for shipments shall be seaworthy, properly manned,
equipped and in good working condition for the voyage. All barges
furnished by WPC are subject to CCC's prior approval and CCC shall have the
right to refuse to load any barge if CCC determines that the barge is not
seaworthy, staunch, tight, properly manned, or the barge is not otherwise
suitable or in good working condition. Approval of any barge shall not be
unreasonably withheld.
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Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
Exhibit B-1
Export Refrigeration Equipment
32.0 Scope of Services.
CCC shall provide WPC access to its export refrigeration equipment at the
Warrengas Terminal for WPC's use in loading WPC or WPC's customers
products. WPC shall operate the export refrigeration equipment for all
product shipments.
33.0 Quantity
To the extent the export refrigeration equipment is available for shipments
other than ethylene, it shall be available for WPC's requirements to
refrigerate products estimated at 0-3 MMBBLS/year.
34.0 Fee.
WPC shall pay CCC 1.0 cpg for a throughput of fully refrigerated propane
* and REDACTED for any other refrigerated product (e.g. semi-refrigerated
propane; fully refrigerated butane).
35.0 Fee Adjustment.
Each party shall have the right to request a change in the fee at any time
during the term covered by this Agreement, provided it gives the other
party at least ninety (90) days written notice of such change. The
failure of the notified party to serve the other party with written notice
of objection thirty (30) days prior to the effective date shall be
considered acceptance of such change. If written notice of objection is
served, the notifying party shall have the right to continue under this
Agreement at the same fee and terms in effect at the time it gave notice of
the requested change or resolve the issue by the dispute resolution
provision in Section 16.
36.0 Hours of Operation.
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Subject to scheduling priorities under Section 7.0, the export
refrigeration equipment shall be available to WPC twenty-four (24) hours a
day, seven (7) days a week, including holidays, for the refrigeration of
WPC's products.
37.0 Maintenance.
WPC shall maintain and perform all repairs on the export refrigeration
equipment. CCC shall pay for all maintenance and repairs under $25,000 and
WPC and CCC shall share the cost of all third party labor, repairs and
maintenance in excess of $25,000 by allocation agreed to by the parties
based upon mutually agreed factors including but not limited to historical
usage and causation of specific repair.
38.0 Scheduling.
CCC shall have first priority on scheduling the use of export refrigeration
equipment. Scheduling the use of such equipment for all other uses shall
be mutually agreed to by the Parties and shall be scheduled through WPC's
logistic specialists.
-24-
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
Exhibit B-2
Port Xxxxxx Terminalling Services
39.0 Scope of Services.
CCC shall provide product transfer services at the Port Xxxxxx Terminal
consisting of loading and unloading of barges of isobutane, normal butane,
refinery butane and other products mutually agreed upon by the parties and
transferring product by pipeline to Xxxxx Refinery, Port Xxxxxx, Texas.
The transfer services shall be for WPC requirements for back-up or
emergency service to normal pipeline delivery from WPC to the Xxxxx
Refinery.
40.0 Quantity.
CCC agrees to provide transfer services for WPC requirements of
approximately 0-3000 BBLS/day.
41.0 Hours of Operation.
Upon reasonable notice, CCC will provide Services at the dock
facilities 24 hours a day, 7 days a week, including holidays, for the
receipt and/or delivery of products.
42.0 Fees.
* WPC shall pay CCC REDACTED for the unloading and transferring
services.
43.0 Price Adjustment
Each party shall have the right to request a change in the fee at any
time during the term covered by this Agreement, provided it gives the other
party at least ninety (90) days written notice of such change. The failure
of the notified party to serve the other party with written notice of
objection thirty (30) days prior to the effective date shall be considered
acceptance of such change. If written notice of objection is served, the
notifying party shall have the right to continue under this Agreement at
the same fee and terms in effect at the time it
-25-
gave notice of the requested change or resolve the issue by the dispute
resolution provision in Section 16.
44.0 Termination.
CCC may terminate the Services relating to this Exhibit in the event of a
termination of CCC's right to lease the Port Xxxxxx Terminal. WPC may
terminate the Services relating to this Exhibit in the event of termination
of that certain agreement between WPC, as assignee of Chevron U.S.A. Inc.
and Xxxxx Refining & Marketing, Inc.
45.0 Risk of Loss.
WPC shall retain risk of loss for all of its product except for loss
relating to the negligent acts or omissions by CCC, its employees,
contractors or agents, which shall be the responsibility of CCC.
46.0 Scheduling.
All requests for Services at the Port Xxxxxx Terminal shall be scheduled
through CCC's feedstock supply representative.
-26-
Confidential Treatment Requested.
The redacted material has been
separately filed with the Commission.
Exhibit B-3
Feedstock Pipeline Service
47.0 Scope of Services.
CCC shall ship by CCC's pipelines between the Mont Belvieu Terminal and
Xxxxx'x Fannett Terminal, WPC's requirements for isobutane and butane
products and other products mutually agreed upon by the parties.
48.0 Quantity.
Product Estimated Volume Destination
------- ---------------- -----------
Isobutane 1.2 MM BBLS/year MBT to FT
Refinery Butane 700 M BBL/year FT to MBT
49.0 Fees.
* WPC shall pay CCC REDACTED for isobutane shipments. All refinery butane
shipments shall be paid by Xxxxx Refinery under separate contract between
Xxxxx Refinery and CCC.
50.0 Fee Adjustment.
Each party shall have the right to request a change in the fee at any time
during the term covered by this Agreement, provided it gives the other
party at least ninety (90) days written notice of such change. The failure
of the notified party to serve the other party with written notice of
objection thirty (30) days prior to the effective date shall be considered
acceptance of such change. If written notice of objection is served, the
notifying party shall have the right to continue under this Agreement at
the same fee and terms in effect at the time it gave notice of the
requested change or resolve the issue by the dispute resolution provision
in Section 16.
51.0 Risk of Loss.
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WPC shall retain risk of loss for all of its product except for loss
relating to the negligent acts or omissions by CCC, its employees,
contractors or agents, which shall be the responsibility of CCC.
-28-
