Exhibit 10.12
Joint Study Agreement (JSA)
Xx. 000 / X00000 / 0000-X0
Xxxxxxx
Xxxxxxxxxx Xxxxxxxxxxxx Minyak Xxx Gas Bumi Negara (Pertamina)
And
Rentech Inc.
For
Feasibility Study of Gas to Liquids Technology Project
JOINT STUDY AGREEMENT (JSA)
This Joint Study Agreement ("JSA") is made and entered into this 2nd day
of October, year two thousand and one, by and between:
1. PERUSAHAAN PERTAMBANGAN MINYAK XXX GAS BUMI NEGARA (PERTAMINA), a
State Oil and Gas Enterprise established by virtue of and existing
under the Law Xx. 0/0000 xx xxx Xxxxxxxx xx Xxxxxxxxx, having its
domicile at Xxxxx Xxxxx Xxxxxxx Xxxxx 0X, Xxxxxxx Xxxxx 00000,
Xxxxxxxxx, in this matter represented by Iin Arifin Takhyan in his
capacity as Corporate Senior Vice President Upstream, hereinafter in
this Joint Study Agreement called PERTAMINA.
And
2. RENTECH Inc., a corporation established under the Laws of the State
of Colorado, USA, and having its principal office at 0000 00xx Xxxxxx,
Xxxxx 000 Xxxxxx, XX 00000, XXX in this matter represented by Xxxxxx X.
Xxxxxxxx in his capacity as President, hereinafter in this Joint Study
Agreement called RENTECH.
Both are, individually hereinafter referred to as PARTY and collectively
as PARTIES.
WITNESSETH
Whereas, PERTAMINA as the State Enterprise has the rights to mine for
mineral oil and natural gas in Indonesia which include exploration,
exploitation, processing, transportation and marketing of oil and
natural gas products in Indonesia, and
Whereas, in an effort to increase the revenue obtained from natural gas
utilization, PERTAMINA recognizes the abundance of natural gas
resources in Indonesia which are potentially possible to be developed
through the implementation of Gas to Liquids (GTL) technology, and
Whereas, RENTECH, is a company recognized for its experience, ability,
and expertise in the development and application of GTL proprietary
technology and existing patents, and able to issue a license for the use
of this technology, and
Whereas, PERTAMINA and Rentech recognize the capability of the other
PARTY in the possibilities of the development of business in Indonesia
with regard to the implementation of GTL technology, and
Whereas, PERTAMINA and RENTECH have entered into a Memorandum of
Understanding to perform a cooperation to explore the possibilities of
the development of this business, and
Whereas, to realize the intended cooperation PERTAMINA and RENTECH wish
to conduct the Feasibility Studies and prepare an Implementation Plan
(both hereinafter referred to as the Joint Study).
Now therefore, in consideration of the mutual premises contained herein,
the PARTIES agree as follows:
ARTICLE 1
AREA OF INTEREST
1.1 "Area Of Interest" shall mean the areas covering PERTAMINA's
working area that have gas fields or other natural gas sources, which
are currently unutilized such as flared, reinjected, or not being
supplied to consumer.
1.2 Initially, the PARTIES agree to study the possibilities of the
development and implementation of GTL technology on the natural gas
produced from Matindok field, in Central Sulawesi, hereinafter referred
to the Pilot Project.
1.3 At any time, based on PERTAMINA's consideration, PERTAMINA hold the
rights to exclude any of PERTAMINA's working areas from those of the
Area of Interest, in such case the PARTIES should not carry out Joint
Study on such exclude working area(s).
ARTICLE 2
SCOPE OF JOINT STUDY
2.1 The Joint Study to be carried out in the Area of Interest is
limited within the scope of the Feasibility Studies and the
preparation of Implementation Plan.
2.2 The Feasibility Study outlined to and consist of, but not limited
to, the following:
(i) Background and Project Configuration,
(ii) Survey(s) on Supply and Demand profiles of GTL Product(s),
(iii) Technical Surveys For The Construction of The GTL Processing
Facilities,
(iv) Financial Evaluation, and
(v) Conclusion and Recommendations.
Scope of work in detail for the Feasibility Study is attached hereto in
Attachment-1 of this Joint Study Agreement.
The PARTIES agree that the Feasibility Study should belong to PERTAMINA.
1. If the Project Team as stated in Article-5 considers that the
Feasibility Study of the Pilot Project is not feasible, the Project
Team may request a new case study and such request should be presented
to each management of both PARTIES who may approve and assign the
proposed case study as a new Pilot Project. The Project Team shall
then prepare the new Feasibility Study based on the new Pilot Project,
in the same scope of work as stated in Clause-2.2.
2. If the management of PARTIES consider the results of the Feasibility
Study to be worthwhile, it shall be followed by the preparation of a
detailed plan for the realization of the implementation of the GTL
technology on the Pilot Project in the form of an Implementation Plan
which will include, but will not be limited to, the following:
(i) The proposed product,
(ii) Possible sites and locations,
(iii) Economic considerations,
(iv) Finance and investment opportunities,
(v) Project optimization methods,
(vi) Joint venture configurations for managing the GTL processing
and marketing companies,
(v) GTL marketing arrangements taking into account the identified
sites and locations.
3. If the management of PARTIES considers that the result of the Joint
Study is worthwhile and approved by the respective boards of directors
of the PARTIES, then it shall be submitted for approval to respective
board of commissioners.
4. If the Implementation Plan is approved by the boards of
commissioners of both PARTIES pursuant to clause-2.5, the PARTIES shall
present their intention and prepare themselves to enter into a
definitive and mutually accepted agreement, that will govern and
construe the Implementation Plan in detail.
ARTICLE 3
DURATION
3.1 This Joint Study Agreement shall be effective as of the date as
stated in the beginning of this Joint Study Agreement (Effective Date)
and shall remain in force for twelve (12) months thereafter. The
initial term for conducting the Feasibility Study shall be five (5)
months thereafter.
3.2 Upon suggestion of Project Team, the PARTIES may mutually agree, in
writing, to extend the term of this Joint Study Agreement to an
appropriate period.
ARTICLE 4
OBLIGATION OF THE PARTIES
4.1 Obligations of RETCH
4.1.1 Rentech shall not use the data provided by PERTAMINA for
purpose other than those related to this Joint Study Agreement, and
will protect and keep the data confidential in accordance with
Article-7.
4.2.2 RENTECH shall deliver to PERTAMINA all of the original
and/or copy of the data provided by PERTAMINA not later than 1 (one)
month after the Joint Study has been completed.
4.2.3 After the completion of the Joint Study, RENTECH will
provide to PERTAMINA 3 (three) copies of all reports.
4.1 Obligations of PERTAMINA
4.1.1 PERTAMINA shall allow RENTECH to use data related to the
Joint Study held by PERTAMINA. Data released by PERTAMINA for this
Joint Study is on borrowing basis.
4.1.2 PERTAMINA has responsibility to prepare all the required
data with regard to the Joint Study
4.1.3 PERTAMINA will give appropriate assistance in connection
with the information of local costs and regulations and obtain
Government permits to materialized this Joint Study.
4.2. The PARTIES shall commence all activities as stipulated in clause
2.2 not later than 1 (one) month after the Effective Date.
ARTICLE 5
THE PROJECT TEAM
5.1 The Project Team will be led by representative of RENTECH,
accompanied by a vice leader from PERTAMINA, Upstream Directorate.
5.2 The number and responsibility of the team member will be determined
later by the leader and vice leader of the Project Team.
5.3 The scope of works to be performed by members of the Project Team
nominated by each PARTY shall be mutually agreed by both PARTIES.
5.4 Each PARTY shall bear any and all claims, damages,
responsibilities, liabilities, costs and expenses arising from the
performing of the scope of works by its respective employee(s) as
member(s) of the Project Team. The costs and expenses are such as:
salary, allowance, insurance, tax, board-lodging, travel expenses and
other costs related to the foregoing.
5.5 The membership of the Project Team may be recognized if it is
determined by the PARTIES to be incapable of performing the tasks and
duties as stated in this Joint Study Agreement.
5.6 During the preparation of the Feasibility Study and the
Implementation Plan, the Project Team may visit allocated gas field(s)
of the Area of Interest for data collection.
ARTICLE 6
ALLOCATION OF COSTS
6.1 PERTAMINA and RENTECH shall bear its own costs and expenses
incurred in connection with the preparation of feasibility studies. It
will consist of costs and expenses such as: salary, insurance, tax,
board & lodging, travel expense, and other costs related to the
foregoing.
6.2 If PERTAMINA or RENTECH requires assistance from a third party, the
costs and expenses incurred by the third party involvement will be the
responsibility of the proposing PARTY.
6.3 If the Execution Plan is approved to be implemented, the PARTIES
agree not to capitalize the expenses incurred pursuant to the
provisions of this Joint Study Agreement.
6.4 Such costs and expenditures shall not be capitalized and recovered
by both PARTIES as operating costs under GTL processing project
cooperation between PERTAMINA and RENTECH or any companies affiliated
with RENTECH, nor shall such costs and expenditures be deductible for
tax purposes under said project.
ARTICLE 7
CONFIDENTIALITY AND EXCLUSIVE UNDERSTANDING
7.1 Each PARTY shall treat as confidential and ensure that its
officers, directors, employees, affiliates, advisors, lenders, counsel
and representatives keep in strict confidentiality, the data or
information jointly gathered in connection with, utilized in, and/or
resulted from the preparation of the Joint Study (hereinafter referred
to the "CONFIDENTIAL INFORMATION").
7.2 Each PARTY shall treat as confidential the trade of professional
secrets or confidential operations, processes, dealings, technical
information, knowledge and information concerning the organization,
business affairs or finances of the other PARTY.
7.3 With regard to Article-2, each PARTY agree that it will not use the
Confidential Information for its own benefit, disclosed or permit to be
disclosed to any person, firm, company or body, without written consent
from the other PARTY, except for that which is already legitimately has
entered the public domain other than by the default of either PARTY or
is required to be disclosed by law or court order.
7.4 This Article shall become effective from the Effective Date as
stated in the beginning of this Joint Study Agreement and shall be in
force for a period ending one (1) year after the termination of this
Joint Study Agreement.
ARTICLE 8
RELATIONSHIPS BETWEEN THE PARTIES
8.1 The PARTIES shall cooperate with each other and use all reasonable
efforts to fulfill its obligation in this Joint Study Agreement.
8.2 Each PARTY has thoroughly evaluated and understands all of the
obligations and consequences of entering into this Joint Study
Agreement, and will provide all information and knowledge they have to
execute this Joint Study Agreement.
8.3 Representatives of RENTECH and PERTAMINA who are in charge in the
Project Team will hold open discussion for the development and
preparation of the Joint Study.
8.4 Nothing in this Joint Study Agreement or in relationship between
the PARTIES shall be construed as in any sense creating a partnership
between the PARTIES, or giving to any PARTY any of the rights of, or
subjecting any PARTY to any of the liabilities of a partner.
8.5 Except for actual damages, no PARTY shall be liable or have any
responsibility to the other PARTY for any indirect, special,
consequential, punitive or other delay related or performance related
damages.
ARTICLE 9
ASSIGNMENT
Neither PARTY hereto shall have the right to assign its right or
obligation under this Joint Study Agreement to any third party without
the prior written consent of the other PARTY, which consent shall not
be unreasonably withheld or delayed.
ARTICLE 10
GOVERNING LAW AND SETTLEMENT OF DISPUTES
10.1 This Joint Study Agreement shall be governed by, and construed in
accordance with, the laws of the Republic of Indonesia.
10.2 Amicable settlement: All disputes arising out of or in connection
with this Joint Study Agreement or its performance, including the
validity, scope, meaning, construction, interpretation or application
hereof, shall to the extent possible be settled amicably by negotiation
and discussion between PARTIES.
10.3 Arbitration: Any disputes not settled by amicable Joint Study
Agreement shall be finally settled by arbitration under the rules of
Arbitration of the Indonesian National Arbitration Board (Badan
Arbitrase Nasional Indonesia-BANI), such arbitration to be conducted in
Indonesian Language in Jakarta, Indonesia. The arbitration award shall
be final and binding.
ARTICLE 11
FORCE MAJEURE
11.1 If any PARTY is unable, wholly or in part, by reason of Force
Majeure to perform or comply with any obligation under this Joint Study
Agreement, then such PARTY's obligation that is affected shall be
suspended during the continuance of the event of Force Majeure.
11.2 Force Majeure shall include, but not limited: A change in the
laws, regulations or instructions issued by the Government of the
Republic of Indonesia, fire, explosion, earthquake, hurricane, heavy
rains, flood, insurrection, riots, war, blockade, labor conflict,
strike or epidemics which have direct effect on this Joint Study
Agreement.
11.3 Any PARTY that is affected by an event of Force Majeure shall
notify the other PARTY in writing within seven (7) days of occurrence
of the Force Majeure event, and the receiving PARTY shall respond its
acknowledgment not later than seven (7) days after receiving such
notice.
ARTICLE 12
TERMINATION
This Joint Study Agreement may be terminated before it is expired in
accordance to Article-3 above, in the event:
12.1 If after one (1) month from the Effective Date of this Joint Study
Agreement, Project Team has not commenced the Feasibility Study as
specified in Article-2 above without justifiable reasons. Therefore
each PARTY may independently consider terminating this Joint Study
Agreement. In order to terminate this Joint Study Agreement, the
proposing PARTY shall notify the other PARTY, in writing, thirty (30)
days prior the proposed date of termination.
12.2 If both PARTIES consider the result of the Joint Study is not
worthwhile or not approved by the respective boards of directors and/or
boards of commissioners of the PARTIES then RENTECH or PERTAMINA may
terminate this Joint Study Agreement by giving notification to the
other PARTY, in writing, thirty (30) days prior the proposed date of
termination.
12.3 Based on its considerations, each PARTY may terminate this Joint
Study Agreement, by giving notification to the other PARTY, in writing,
thirty (30) days prior the proposed date of termination.
12.4 In any of the above events, each of the PARTIES will have no
further obligations to the other PARTY, except those stated pursuant to
Article-7.
ARTICLE 13
AMENDMENTS
No amendments, changes, or modifications to this Joint Study Agreement
shall be valid except if the same is in writing and signed by the
PARTIES hereto.
ARTICLE 14
LANGUAGE INTERPRETATION
This Joint Study Agreement is made in two (2) languages, Indonesian and
English. In case of different interpretation, the Indonesian version
shall prevails.
ARTICLE 15
NOTICES
All notices or other communications between the PARTIES given under in
relation to this Joint Study Agreement shall be delivered physically or
by facsimile or by e-mail to the respective PARTIES at the following
addresses:
PERTAMINA:
Gas Development and Utilization Division
PERTAMINA "Kwarnas" Building 9th Floor
Xxxxx Xxxxx Xxxxxxx Xxxxx 0
Xxxxxxx 00000 - Xxxxxxxxx
RENTECH:
RENTECH Inc.
Attn. President,
0000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000, XXX
The foregoing addresses may be changed by giving written notice to the
other party at addresses provided above.
In witness whereof, this Joint Study Agreement is made in duplicate
which shall have equal legal force and upon the signature of the
respective representative of PERTAMINA and RENTECH on each copy, and
The PARTIES have caused this Joint Study Agreement to be executed on the
date written earlier in this Joint Study Agreement.
RENTECH, INC. PERUSAHAAN PERTAMBANGAN MINYAK
XXX GAS BUMI NEGARA (PERTAMINA)
/s/ Xxxxxx X. Xxxxxxxx /s/ Iin Arifin Takhyan
Xxxxxx X. Xxxxxxxx Iin Arifin Takhyan
------------------------------ --------------------------------
President Corporate Senior Vice President Upstream
ATTACHMENT -
GTL DATA GATHERING
PERTAMINA Provided Information
- PERTAMINA data on expected gas reserve size, deliverability, existing
pipeline feed and other physical characteristics.
- Information on any nearby power plant and/or PERTAMINA refinery size,
capability, ability to expand. This information will assist in the
selection and recommendation of the Syngas generation unit type, size
and operation (the critical and most costly single process step in a
GTL facility).
- Other information requirements:
-- Site location and size
-- Site map and description
-- Soil description (seismic and any other geological special
consideration)
-- Expected Gas Quantity
-- Gas Quality, Composition
-- Gas Pressure
-- Gas Cost
-- Any initial or Desired Products or Product Mix
-- Basic Permitting Requirements*
-- Special Regulations and/or requirements*
-- Local Labor availability with rates and Productivity Factors*
GTL PRODUCT MARKET SURVEY
PERTAMINA Provided Information
Pertamina data on expected product supply, demand and price for the
below products for either export or domestic market.
Product Data Requirements:
- Naphtha
Supply and Demand, Price
- Kerosene
Supply and Demand, Price, Recommended Capacity
- Diesel
Supply and Demand, Price, Jet Fuel/Kerosene Quality
- Drilling Fluids
Supply and Demand, Price, Product Properties
- Normal Paraffin's
Supply and Demand, Price, Recommended Capacity, Product Properties
- Waxes
Supply and Demand, Price, Recommended Capacity, Product Properties
- Synthetic Lubricants
Supply and Demand, Price, Recommended Capacity, Product Properties
- Synthetic Crude
Target Market, Price, Product Properties
- Oxygenates
Supply and Demand, Price, Recommended Capacity
RENTECH GTL PROVIDED STUDY FOR A SPECIFIC PERTAMINA LOCATION
- The Rentech-provided GTL feasibility study will provide a plot plan, a
(block) process flow diagram and cost estimate, including operating and
maintenance cost estimates for a conventional GTL facility.
Preliminary description of utility systems as applicable, (cooling
water, condensate [if any], fuel gas, hot oil or other heating medium,
inert gas, etc.) will be included.
- Discussion of the environmental considerations with estimates for the
air emissions, water effluents and solids disposal requirements.
- Rentech will provide a discussion on products and potential product
mix considerations as well as typical product specifications and value.
- An economic model will be prepared based on the project feasibility
and PERTAMINA estimates for the feedstock value and any preferred
product mix and values.
Deliverables for the GTL Feasibility Study report will be:
1. Basis of Design
2. Rentech Process Discussion
3. Plot Plan (are outline and sizes for unit operations)
4. Process Flow Diagrams (block flow diagrams)
5. Major Equipment List (preliminary)
6. Cost Estimate
7. Utilities Estimate
8. Operations and Maintenance staffing recommendations
9. Product Qualities
10. Product Mix, available with the Rentech FT Process
11. GTL Product PERTAMINA Market Data, Pricing and Projections
12. Typical Project Schedule
13. Economic Model
