EXHIBIT 10.28.2
[SHELL WESTERN E&P Inc. LOGO]
SHELL WESTERN E&P INC.
A Subsidiary of Shell Oil Company
X.X. Xxx 0000
Xxxxxxx.XX 00000
January 26, 1988
Alaska Pipeline Company
ATTN: Xx. X. X. Xxxxxx, President
P. 0. Xxx 000000
Xxxxxxxxx, XX 00000-0000
Gentlemen:
SUBJECT: BELUGA GAS FIELD
Please refer to the Gas Purchase Contract dated December 20, 1982, between Shell
Oil Company, predecessor in interest of Shell Western E&P Inc. ("Seller") and
Alaska Pipeline Company ("Buyer"), covering the sale and purchase of certain
natural gas produced from the Beluga Gas Field, Xxxx Inlet Area, Alaska
("Beluga Contract").
Buyer has entered into a Gas Sales Contract dated December 22, 1987, with
Xxxxxxxx 66 Natural Gas Company ("Xxxxxxxx"), covering the sale of gas by Buyer
to Xxxxxxxx for Xxxxxxxx' liquefied natural gas facility located at Nikishka,
Kenai Peninsula Borough, Alaska ("Xxxxxxxx Contract").
In consideration of the mutual promises made herein, Seller and Buyer agree as
follows:
1. At Buyer's sole election, exercisable by notice from Buyer to
Seller, as hereinafter provided, Seller agrees to sell and deliver
to Buyer and Buyer agrees to purchase and receive from Seller a
volume of gas equal to the volume of gas sold under the Xxxxxxxx
Contract during the term thereof, but not including any volume of
gas sold thereunder after May 31, 1989. The volume of gas to be sold
hereunder is referred as the "Supplemental Volume."
2. All words and terms defined in the Beluga Contract shall, if used
herein, have the same meaning as so defined.
3. Deliveries hereunder shall begin on a date selected by Buyer not
less than six months after notice from Buyer to Seller confirming
Buyer's election to purchase the Supplemental Volume and specifying
such date and shall continue until the earlier of (a) the date of
termination of the Beluga Contract and (b) the date on which all of
the Supplemental Volume has been delivered. The Supplemental Volume
shall be delivered at rates elected by Buyer upon notice by Buyer to
Seller of not less than 4,000 MCF per day and not more than 10,000
MCF per day; provided, that, on any day, the sum of the volume
delivered hereunder and the volume delivered under the Beluga
Contract shall not exceed the applicable swing rate.
2
4. The price per MCF to be paid by Buyer to Seller for gas delivered
hereunder shall be the average price, weighted as to volume, paid
per MCF under the Xxxxxxxx Contract for deliveries thereunder prior
to June 1, 1989, multiplied by a fraction, the numerator of which is
the Posted Price on the November 1 preceding the date of first
deliveries of the Supplemental Volume and the denominator of which
is the Posted Price on November 1, 1987.
5. Deliveries hereunder shall be made upon the same terms and
conditions set out in the Beluga Contract; provided, if any conflict
exists, as to the Supplemental Volume, between the terms of the
Beluga Contract and the terms hereof, the terms hereof shall
prevail.
6. Buyer shall promptly undertake to obtain an initial determination by
the Alaska Public Utilities Commission that the costs incurred by
Buyer hereunder constitute reasonable and recoverable costs of
Buyer's public utility business. In the event that within ninety
(90) days from the date of this agreement such determination is
refused, then Buyer or Seller may by written notice terminate this
agreement.
Please indicate your agreement to the foregoing by executing all copies of this
letter and by returning one copy to the undersigned.
Yours very truly,
SHELL WESTERN E&P INC.
By /s/ L. L. Xxxxx
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Attorney-in-Fact
AGREED:
ALASKA PIPELINE COMPANY
By /s/ X.X. Xxxxxx
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