1
EXHIBIT 10(o)
2
CONFORMED COPY
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of this
15th day of May, 1995 by and between MOBILE GAS SERVICE CORPORATION, an Alabama
corporation with a mailing address of P. O. Xxx 0000, Xxxxxx, Xxxxxxx 00000,
herein called "Mobile Gas," and TUSCALOOSA STEEL CORPORATION, an Alabama
corporation with a mailing address of 0000 Xxxx Xxxx, X.X., Xxxxxxxxxx, Xxxxxxx
00000-0000, herein called "Customer."
WHEREAS, Customer desires to use natural gas for the operation of
Customer's planned direct iron reduction units and associated plant equipment
to be located at Customer's proposed plant on its "XxXxxxxx Island" site in
Mobile, Alabama (the "Plant"); and
WHEREAS, Mobile Gas operates a system for the distribution of natural
gas from natural gas transmission pipelines and processing plants, through
which Mobile Gas can transport to the Plant gas purchased by Customer or its
agents from third parties ("Customer's Shippers") and delivered by Customer's
Shippers to Mobile Gas, and the parties desire that Mobile Gas provide such
transportation services to Customer and construct certain pipeline facilities
for such purpose.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I - TERM OF AGREEMENT
1.1 The term of this Agreement shall be [**proprietary information
deleted**] Contract Years, beginning on the Commencement Date, as defined in
Article IV. "Contract Years" shall mean the consecutive twelve-month calendar
periods commencing with the first day of the month beginning after the
Commencement Date (provided that if the Commencement Date is the first day of a
month, the first Contract Year shall commence on such date, and if the
Commencement Date is not the first day of a month, the first Contract Year
shall also include the period from the Commencement Date to the first day of
the month beginning after the Commencement Date).
1.2 So long as Customer is not in default hereunder at the
expiration of the initial term hereof, as the same may be extended pursuant to
Section 9.3 (the "Expiration Date"), either Customer or Mobile Gas may extend
this Agreement for an additional term of fifteen Contract Years immediately
following the Expiration Date (the "Renewal Term") by notifying the other of
its intent to so extend not less than 90
3
days prior to the Expiration Date. The Rate for such Renewal Term is set forth
on Exhibit "A."
1.3 Notwithstanding the provisions of Section 1.1, this Agreement
shall become effective as of the date hereof with respect to the obligations of
the parties specified in ARTICLE III hereof, and payment obligations arising
prior to expiration or termination of this Agreement shall remain in effect
after the term of this Agreement.
1.4 This Agreement may only be terminated prior to the expiration
of the initial term or the Renewal Term hereof, if any, as the case may be:
(a) by Mobile Gas
(i) in accordance with Section 8.4,
(ii) in accordance with Section 9.4(b), or
(iii) after occurrence of any material breach by
Customer in the performance of its
obligations hereunder and the continuance
of such breach 90 days after notice by
Mobile Gas to Customer of such breach and
demand by Mobile Gas that Customer cure
same;
(b) by Customer
(i) in accordance with Section 9.4(a), or
(ii) in accordance with Exhibit A, or
(iii) after occurrence of any material breach by
Mobile Gas in the performance of its
obligations hereunder and the continuance
of such breach 90 days after notice by
Customer to Mobile Gas of such breach and
demand by Customer that Mobile Gas cure
same. In the event of termination by
Customer under this clause (iii), Customer
shall not owe any further minimum xxxx
payments or termination payments in lieu
thereof as provided for in Exhibit A.
4
ARTICLE II - TRANSPORTATION SERVICE
2.1 Mobile Gas will transport up to a volume of [**proprietary
information deleted**] MMBtu per day, not to exceed [**proprietary information
deleted**] MMBtu per hour ("Contract Demand Volume") to the Point of
Redelivery, as hereinafter defined, for use at the Plant. Customer will pay
Mobile Gas for all gas transported by Mobile Gas to the Plant and agrees to
accept transportation service from Mobile Gas subject to the terms and
conditions hereof. As used herein the term "MMBtu" shall mean 1,000,000
British Thermal Units (which means the amount of heat required to raise the
temperature of one pound of distilled water one degree Fahrenheit at 60 degrees
Fahrenheit at a constant pressure of 14.73 pounds per square inch absolute).
2.2 The effective Rates for the initial term, and any renewal
term, if any, and certain other terms pertaining to such transportation service
are specified in Exhibit "A" which is attached hereto and made part of this
Agreement. Customer agrees that Mobile Gas shall be the sole transporter of
natural gas to the Plant during the term of this Agreement.
2.3 If this Agreement is renewed for a Renewal Term, if at any
time and from time to time during Contract Years [**proprietary information
deleted**] through [**proprietary information deleted**] the volume transported
pursuant to this Agreement is less than an average volume of [**proprietary
information deleted**] MMBtu per day for any consecutive [**proprietary
information deleted**]-month period (with force majeure days excluded from the
calculation), then Mobile Gas may, by not less than 30 days' written notice to
Customer, reduce the Contract Demand Volume to a Contract Demand Volume equal
to [**proprietary information deleted**] of such average daily volume during
such [**proprietary information deleted**]-month period. Such reduction shall
not affect the applicable Rate or the minimum xxxx provisions set forth in
Exhibit "A".
2.4 If this Agreement is renewed for a Renewal Term, if during any
Contract Year during the Renewal Term the average volume of gas transported is
below [**proprietary information deleted**] MMBtu per day (with force majeure
days and up to two weeks of Customer scheduled maintenance excluded from the
calculation), Mobile Gas may, by not less than 30 days' written notice to
Customer, cause the Rate for transportation of gas to thereafter be the rate
set forth in the T-1 Tariff of Mobile Gas, or any tariff which is a successor
thereto, and such Rate shall remain in effect during the remainder of the
Renewal Term. Any such rate change shall not affect the minimum xxxx
provisions set forth in Exhibit "A".
2.5 During Contract Years [**proprietary information deleted**]
through [**proprietary information deleted**], Customer may, by not less than
30 days' written notice to Mobile Gas, elect once to reduce the Contract Demand
Volume to
3
5
[**proprietary information deleted**] MMBtu, and in such event, the annual
minimum xxxx amount for the following Contract Years shall be reduced to
[**proprietary information deleted**] through the end of Contract Year
[**proprietary information deleted**]. In such event, such reduced Contract
Demand Volume would remain in effect during any Renewal Term, and the minimum
xxxx during such Renewal Term would be as specified in Exhibit "A".
ARTICLE III - ACTIONS PRIOR TO COMMENCEMENT DATE;
NOTICE OF FACILITIES COMPLETION
3.1 Customer shall be responsible for construction of its pipeline
from the Point of Redelivery to the Plant, and for construction of the Plant.
Promptly after the execution of this Agreement, Customer shall provide to
Mobile Gas an easement in form reasonably acceptable to Mobile Gas for
construction of that portion, if any, of the Facilities, as hereinafter
defined, as shall cross property owned or leased by Customer, as well as for
construction and maintenance of a metering station on the Plant premises.
3.2 Promptly after the execution of this Agreement and receipt of
all required regulatory approvals, easements and rights-of-way as may be
required, Mobile Gas shall begin construction of the facilities necessary to
deliver natural gas to the Point of Redelivery specified herein (the
"Facilities"). Mobile Gas will proceed with reasonable dispatch to obtain
required regulatory approvals, easements and rights of way as may be required
hereunder. Mobile Gas shall at its expense complete such construction of the
Facilities as is required to enable Mobile Gas to deliver gas to Customer at
the Point of Redelivery at the Contract Demand Volume ("Facilities Completion")
not later than 18 months after the execution of this Agreement. Not more than
60 nor less than 20 days prior to such Facilities Completion, Mobile Gas shall
provide notice to Customer of the date that Facilities Completion will occur.
ARTICLE IV - COMMENCEMENT DATE
4.1 The "Commencement Date" shall be the earlier of (i) the date
Customer first takes natural gas from the Facilities into the Plant, or (ii) 30
days after the date of Facilities Completion, provided that the Commencement
Date pursuant to this subsection 4.1(ii) shall not be earlier than 18 months
after the execution of this Agreement.
4
6
ARTICLE V - QUALITY
5.1 The volumes of natural gas delivered by Customer's Shippers
and redelivered by Mobile Gas hereunder shall be measured at an equivalent
pressure base of 14.73 pounds per square inch absolute ("psia") and an assumed
atmospheric pressure of 14.7 psia, and at a temperature base of 60 degrees
Fahrenheit. The volume of natural gas determined hereunder shall be adjusted
to give effect to Xxxxx'x Law in accordance with standard procedure.
5.2 The quality of the gas delivered by Customer's Shippers to
Mobile Gas and redelivered by Mobile Gas to Customer shall be pipeline quality,
and:
(a) Shall be dehydrated and shall in no event have a
water content in excess of seven (7) pounds of water
per million (1,000,000) cubic feet of gas measured at
a pressure base of 14.73 psia and at a temperature
base of 60 degrees Fahrenheit, as determined by dew
point or other moisture measuring equipment in
general use in the industry.
(b) Shall not contain more than one (1) grain of hydrogen
sulfide per one hundred (100) cubic feet as
determined by quantitative methods in general use in
the industry.
(c) Shall not contain more than twenty (20) grains of
total sulphur, including hydrogen sulfide, per one
hundred (100) cubic feet as determined by
quantitative methods in general use in the industry.
(d) Shall not contain in excess of:
(i) Three percent (3.0%) by volume carbon
dioxide.
(ii) Two percent (2.0%) by volume oxygen.
(iii) Three percent (3.0%) by volume nitrogen.
(e) Shall be commercially free from dust, gum,
gum-forming constituents or other liquid or solid
matter which might become separate from the gas in
the course of transportation through pipelines.
(f) Shall be commercially free of water and other
objectionable liquids at the temperature and pressure
at which the gas is delivered and the gas shall not
contain any hydrocarbons which might condense to free
liquids in the pipeline under normal pipeline
conditions.
5
7
ARTICLE VI - POINT OF DELIVERY AND REDELIVERY
6.1 Customer's Shipper shall deliver gas (at a pressure sufficient
to enter into the interconnection at the Point of Delivery) to be transported
by Mobile Gas hereunder to Mobile Gas' presently existing interconnections with
(a) [**proprietary information deleted**], (b) [**proprietary information
deleted**], (c) [**proprietary information deleted**], or (d) [**proprietary
information deleted**] (each a "Point of Delivery"). Any additional Point of
Delivery shall only be designated by mutual written agreement of Mobile Gas and
Customer.
6.2 No more than [**proprietary information deleted**] MMBtu per
hour, nor more than [**proprietary information deleted**] MMBtu per day shall
be delivered to the [**proprietary information deleted**] interconnection; no
more than [**proprietary information deleted**] MMBtu per hour, nor more than
[**proprietary information deleted**] MMBtu per day shall be delivered to
[**proprietary information deleted**] interconnection; and no more than
[**proprietary information deleted**] MMBtu per hour, nor more than
[**proprietary information deleted**] MMBtu per day shall be delivered to the
[**proprietary information deleted**] interconnection. These allocations are
subject to the daily and hourly volume restrictions in Section 2.1.
6.3 Upon Customer's request, which shall include an undertaking
satisfactory to Mobile Gas that Customer will reimburse Mobile Gas for all
costs reasonably incurred (including all taxes, whether income tax or
otherwise, incurred as a result of receipt of such reimbursement), Mobile Gas
shall install at any one or more Points of Delivery additional metering
capacity which will allow Customer increased allocations at the Points of
Delivery specified in Section 6.2.
6.4 [**proprietary information deleted**]
6.5 The Point of Redelivery of natural gas by Mobile Gas to
Customer hereunder shall be the flange outlet of the Mobile Gas metering
station, which shall be located at or near the boundary of and on the Plant
premises property.
ARTICLE VII - PRESSURE AT POINT OF REDELIVERY
7.1 Mobile Gas shall deliver gas to the Point of Redelivery at the
highest operating pressure available from time to time in the Mobile Gas system
for deliveries at the Point of Redelivery, but at not less than [**proprietary
information deleted**] pounds per square inch gauge (psig) nor more than
[**proprietary information deleted**] pounds per square inch gauge (psig).
6
8
ARTICLE VIII - BILLING
8.1 On or before the seventh (7th) working day of each calendar
month, Mobile Gas shall render to Customer a statement of the amount of gas
transported hereunder by Mobile Gas to Customer during the preceding calendar
month (and with respect to the first such statement, for the portion of a
month, if any, between the Commencement Date and the first full calendar month)
and shall also render a xxxx for all gas so transported. Customer shall make
payment to Mobile Gas at P. O. Xxx 0000, Xxxxxx, Xxxxxxx 00000, or at such
other address as may be provided by Mobile Gas by notice to Customer, on or
before the twenty-fifth (25th) day of that month or 15 days after the date the
xxxx is rendered, whichever is later.
8.2 On or before the seventh (7th) working day after the end of
each consecutive Contract Year, Mobile Gas shall render to Customer a statement
of the amount, if any, by which the aggregate xxxxxxxx by Mobile Gas to
Customer during the preceding Contract Year were less than the minimum annual
xxxx specified on Exhibit "A" (the "Minimum Xxxx Balance"), and if there exists
a Minimum Xxxx Balance, shall also render a xxxx for such amount in accordance
with Section 8.1. Customer shall make payment to Mobile Gas of the Minimum
Xxxx Balance, if any, in accordance with Section 8.1.
8.3 In the event that Customer fails to pay any amounts due
hereunder when due, interest shall accrue on all unpaid amounts from the date
due until paid at a rate of interest equal to 2% in excess of the rate of
interest reported as the "prime rate" in the "Money Rates" section of The Wall
Street Journal or any successor thereto.
8.4 Should Customer fail to pay to Mobile Gas any amount for which
a xxxx has been rendered and which is due to Mobile Gas by the time specified
in Section 8.1, and such failure to pay continues for an additional five days,
then Mobile Gas may suspend deliveries of gas hereunder 10 days after written
notice given on or after the last day of such additional five days to Customer
of such failure to pay. In the event Mobile Gas has given the written notice
prescribed in the preceding sentence, it will at least 72 hours prior to
suspension of deliveries of gas pursuant to this Section 8.4, send notice by
facsimile to two separate individuals designated by Customer by notice to
Mobile Gas. Mobile Gas will also endeavor to give further personal or
telephonic notice to such person or office at the Plant as Customer may specify
by notice to Mobile Gas, at least 72 hours prior to suspension of deliveries of
gas pursuant to this Section 8.4. In the event written notice has been given
as provided above, and payment has not been received for a period of 90 days,
such period commencing on the date of the written notice described above, then
Mobile Gas may, in its sole discretion, terminate this Agreement. Such
termination shall not relieve Customer from the termination payment obligations
set forth in Exhibit A(2).
7
9
8.5 In the event that Customer disputes any amount shown on a
statement issued by Mobile Gas to Customer, such disputed amount shall be paid.
Notwithstanding such payment, Customer shall have the right to claim from
Mobile Gas such disputed amount. Upon receipt by Mobile Gas of any claim from
Customer for a disputed amount, Mobile Gas and Customer shall endeavor to
amicably resolve the disputed amount prior to institution of arbitration by
Customer. The parties are not obligated to pursue amicable resolution for more
than ten (10) days.
ARTICLE IX - FORCE MAJEURE
9.1 In the event of either party hereto being rendered unable,
wholly or in part, by force majeure to carry out its obligations under this
Agreement, other than to make payments hereunder (except as provided below),
the obligations of the party, as far as 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 as far as possible be remedied
with all reasonable dispatch. The party so affected by such event of force
majeure shall give written notice, with reasonably full particulars of such
force majeure, including without limitation measures to be taken to alleviate
such force majeure, in writing or by fax to the other party as soon as possible
after the occurrence of the causes so relied upon.
9.2 The term "force majeure" as employed herein shall mean,
without limitation, acts of God, strikes, lockouts, or other industrial
disturbances, acts of the public enemy, sabotage, wars, blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, floods,
storms, fires, washouts, arrests and restraints of rulers and peoples, civil
disturbances, explosions, breakage or accident to lines of pipe, hydrate
obstructions of lines of pipe, repairs, failure of adequate supply pressures to
any Point of Delivery or other operational constraints affecting the Mobile Gas
system, inability of either party to obtain necessary permits or regulatory
approvals or to obtain easements or rights of way, freezing of a well or
plant, well blowouts, craterings, and the act of any court or governmental
authority, or any other cause, whether of the kind herein enumerated or
otherwise, not within the control of the party claiming suspension or which, by
the exercise of due diligence, such party is unable to prevent or overcome;
provided however, that the settlement of strikes or lockouts shall entirely be
within the discretion of the party engaged in such labor dispute, and the
requirement that any force majeure shall be remedied with the exercise of
diligence 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 engaged in such labor dispute.
9.3 In the event Mobile Gas is, due to an event of force majeure
as herein defined, unable to provide transportation services under this
Agreement for a consecutive ninety-day period, then the obligation of Customer
to make payment
8
10
hereunder shall thereafter be suspended until service is again made available
hereunder, and the term of this Agreement shall be automatically extended for a
period equal to the period during which payment is so suspended.
9.4 (a) In the event a force majeure condition claimed by
Mobile Gas is not corrected within [**proprietary
information deleted**] days, Customer may, at its
discretion, elect to terminate this Agreement upon
[**proprietary information deleted**] days written
notice, and this Agreement shall terminate at the end
of such [**proprietary information deleted**] day
period without relieving either party from any
obligations due on the date of such termination.
(b) In the event a force majeure condition claimed by
Customer is not corrected within [**proprietary
information deleted**] days, Mobile Gas may, at its
discretion, elect to terminate this Agreement upon
[**proprietary information deleted**] days written
notice, and this Agreement shall terminate at the end
of such [**proprietary information deleted**] day
period without relieving either party from any
obligations due on the date of such termination,
except that Customer shall not owe any further
minimum xxxx payments or termination payments in lieu
thereof as provided for in Exhibit "A".
ARTICLE X - CONDITIONS OF TRANSPORTATION INTERRUPTION
10.1 All nominated gas (up to the Contract Demand Volume) delivered
by Customer's Shipper to the Point of Delivery in compliance herewith shall be
considered an authorized volume of gas, and shall be transported to the Point
of Redelivery by Mobile Gas, subject to the terms hereof.
10.2 Notwithstanding any other provision of this Agreement, the
transportation service to be provided by Mobile Gas hereunder is subject to
interruption in any amount (up to and including one hundred percent
interruption) at any time if, in the exercise of its sole discretion, Mobile
Gas determines such interruption is necessary only
(a) due to maintenance, improvement, replacement or
alterations to plants, lines of pipe or related
facilities of Mobile Gas, provided, however, that
interruptions for such purposes shall not exceed
[**proprietary information deleted**] days during the
initial [**proprietary information deleted**] year
term of this Agreement, with there being
9
11
no such limitation associated with any renewal term
hereunder,
(b) due to force majeure conditions as defined in Article
IX, or
(c) pursuant to any Curtailment Plan in effect from time
to time applicable to Mobile Gas customers and
approved by the Alabama Public Service Commission
("APSC").
10.3 In the event of circumstances giving rise to interruption or
curtailment under Section 10.2(a) or (c), Mobile Gas shall exert its best
efforts to provide as early a prior notice of interruption or curtailment as is
practicable under the circumstances, and shall (unless prevented by force
majeure), if reasonably possible, provide at least eight hours' notice of the
time and extent of such interruption or curtailment.
10.4 Mobile Gas shall use reasonable dispatch to restore
transportation service after an interruption pursuant to Section 10.2 of this
Agreement.
10.5 Mobile Gas and Customer shall each have sole discretion in
scheduling their respective maintenance, improvements, replacements or
alterations to plants. However, the parties do agree to communicate with one
another in an effort to schedule maintenance, improvements, replacements or
alterations to plants in such a way as to minimize any interference with
Customer's operations.
ARTICLE XI - NOMINATION PROCEDURE
11.1 Customer or Customer's agents shall provide to Mobile Gas a
daily confirming nomination to match the nomination made by Customer's Shipper.
Confirmation shall be made by voice or fax prior to 3 P.M., Mobile, Alabama
time, the day before a weekday delivery to Mobile Gas and by 3 P.M., Mobile,
Alabama time, on the Friday before any weekend delivery.
ARTICLE XII - NOTICES
12.1 Whenever any notice, request, demand or statement is required
or permitted to be given under any provision of this Agreement, unless
expressly provided otherwise herein, such shall be in writing, signed by or on
behalf of the person giving the same, and shall be deemed to have been given
when mailed by first class mail, sent by Federal Express, Express Mail, or
similar overnight delivery or courier service, or delivered in person, or sent
by facsimile transmission with the transmission confirmed by the transmitting
equipment of the sender, to the address of such party as hereinafter set forth:
10
12
Mobile Gas Service Corporation Tuscaloosa Steel Corporation
0000 Xxxxxxx Xxxxxx (36606) 0000 Xxxx Xxxx, X.X.
P. O. Box 2248 Tuscaloosa, Alabama 00000-0000
Xxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
or to such other address or facsimile number as one party may specify by
written notice to the other.
ARTICLE XIII - LAW GOVERNING
13.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama.
ARTICLE XIV - ENTIRE AGREEMENT
14.1 This instrument embodies the entire Agreement and
understanding between the parties hereto. There are no Agreements,
understandings, conditions, warranties, or representations, oral or written,
express or implied, with reference to the subject matter hereof that are not
merged herein or superseded hereby.
ARTICLE XV - SPECIAL PROVISIONS
The following Special Provisions are made a part hereof:
15.1 Mobile Gas may, but shall not be obligated to, transport or
provide volumes in excess of the Contract Demand Volume if requested by
Customer. If, on any day, the Customer takes an Unauthorized Volume of gas,
the Customer shall, upon written request, pay to Mobile Gas, as damages, any
costs incurred by Mobile Gas. An "Unauthorized Volume" is a volume in excess
of the authorized volume described in Section 10.1 or any volume taken by
Customer in excess of permitted volume during a period of curtailment described
in a notice of interruption given by Mobile Gas in accordance with Section
10.2. The payment of costs incurred by Mobile Gas for unauthorized volumes
taken by Customer shall not under any circumstances be considered as giving
Customer the right to take unauthorized volumes, nor shall such payment be
considered as a substitute for or exclusive of any other remedies available to
Mobile Gas against Customer for failure to respect its obligations to adhere to
the provisions of this Agreement.
11
13
15.2 In the event Mobile Gas incurs any cost, expense and/or
penalties resulting from Customer being over- or under- nominated for any
period of time, Customer shall, upon written request, reimburse Mobile Gas for
such cost, expenses and/or penalties.
15.3 When Mobile Gas becomes aware that costs will be incurred by
Customer as a result of the Customer's non-compliance with the provisions of
Sections 15.1 or 15.2, Mobile Gas will endeavor to advise Customer as soon as
practicable of such event.
15.4 A "day" when used in this Agreement shall mean a twenty-four
(24) hour period ending at 8:00 A.M., Mobile, Alabama time.
15.5 (a) The unit of volume for measurement of gas delivered
hereunder shall be one (1) cubic foot of gas at base
temperature of sixty (60) degrees Fahrenheit and at
an absolute pressure of fourteen and seventy-three
hundredths (14.73) pounds per square inch. All
fundamental constants, observations, records, and
procedures involved in determining and/or verifying
the quantity and other characteristics of gas
delivered hereunder shall, unless otherwise specified
herein, be in accordance with industry standards, as
exist now and may from time to time be amended or
supplemented. All measurements of gas shall be
determined by calculation into terms of such unit.
All quantities given herein, unless expressly stated
otherwise, are in terms of such unit.
Notwithstanding the foregoing, it is agreed that, for
all purposes, the Btu content of the gas received and
delivered by Mobile Gas hereunder shall be measured
on an "as delivered" basis rather than a fully
saturated or "wet" basis.
(b) Mobile Gas shall install, maintain and operate, or
cause to be installed, maintained and operated, the
measurement facilities required hereunder. Said
measurement facilities shall be so equipped with
meters, gauges, and other instruments of standard
make and design commonly acceptable in the industry,
as to accomplish the accurate measurement of gas
delivered hereunder. The calibrating and adjustment
of meters shall be done by Mobile Gas or its agent.
The accuracy of Mobile Gas measuring equipment shall
be verified at appropriate intervals, for instance,
orifice meters shall be calibrated at least once in
each thirty (30) day period, and turbine meters once
each year. Mobile Gas shall keep all meters accurate
and in repair. Mobile Gas shall give Customer
reasonable notice of all tests conducted on measuring
equipment in order that, if Customer desires,
Customer may have
12
14
its representative present. If either party desires a
special test of any measuring equipment, it will
promptly notify the other party and the parties shall
then cooperate to secure a prompt verification of the
accuracy of such equipment. The expenses of any such
special test, if requested by Customer, shall be
borne by Customer if the measuring equipment tested
is found to be accurate within the limits of plus or
minus two percent (2%) of error. For the purposes of
measurement and meter calibration, the atmospheric
pressure shall be assumed to be fourteen and
seventy-three hundredths (14.73) pounds per square
inch, irrespective of variations in natural
atmospheric pressure from time to time.
(c) Customer may, at its option and expense, install and
operate a check meter on its premises to check Mobile
Gas's meter, but measurement of gas delivered to
Customer for the purpose of this Agreement shall be
by Mobile Gas's operated metering only. Any check
meter installed shall be of a standard type and shall
be subject at all reasonable times to inspection or
examination by Mobile Gas, but the reading,
calibration and adjustment thereof and changing of
charts shall be done only by the employees or agents
of Customer.
(d) If upon any test the metering equipment in the
aggregate is found to be inaccurate, by more than two
percent (2%), either plus or minus, registration
thereof and any payment based upon such registration
shall be corrected at the rate of such inaccuracy for
any period of inaccuracy which is definitely known or
agreed upon, or if not known or agreed upon, then for
a period extending back one-half (1/2) of the time
elapsed since the day of the last calibration.
Following any test, any metering equipment found to
be inaccurate to any degree shall be adjusted
immediately to measure accurately; however, if any
inaccuracy is two percent (2%) or less, all prior
readings and measurements shall be deemed to be
accurate and no adjustments to any prior reading
shall be made.
(e) If for any reason, any meter is out of service or out
of repair so that the quantity of gas delivered
through such meter cannot be ascertained or computed
from the readings thereof, the quantity of gas so
delivered during such period shall be estimated and
agreed upon by the parties hereto upon the basis of
the best available data, using the first of the
following methods which is feasible:
13
15
(i) by using the registration of any check
measuring equipment, if installed and
registering accurately;
(ii) by correcting the error if the percentage
of error is ascertainable by calibration,
test, or mathematical calculation; or
(iii) by estimating the quantity of gas
deliveries by deliveries during preceding
periods under similar conditions when the
meter was registering accurately.
(f) The measurement hereunder shall be corrected to give
effect to Xxxxx'x Law at the pressure and temperature
under which gas is delivered hereunder.
(g) Mobile Gas will allow Customer access to all pulses
and other data from the Mobile Gas meters installed
to provide service pursuant to this Agreement.
(h) If at any time during the term of this Agreement a
new method or technique is developed with respect to
gas measurement, or the determination of the factors
used in such gas measurement, such new method or
technique may be substituted for any method set forth
herein which meets generally accepted industry
standards and practices and is acceptable to both
parties.
15.6 Mobile Gas agrees to protect, defend, indemnify, and hold
harmless the Customer, its officers, directors, agents and/or employees from
and against any claims, demands, losses, damages, suits and expenses, for
damages and/or injury to persons and/or property which may be brought against
the Customer, its officers, directors, agents and/or employees arising out of,
or resulting from, the transportation of natural gas from the Point of Delivery
to the Point of Redelivery pursuant to the terms and conditions expressed
herein.
15.7 Customer agrees to protect, defend, indemnify, and hold
harmless Mobile Gas, its officers, directors, agents and/or employees from and
against any claims, demands, losses, damages, suits and expenses, for damages
and/or injury to persons and/or property which may be brought against Mobile
Gas, its officers, directors, agents and/or employees arising out of, or
resulting from, the transportation of natural gas by the Customer or its agents
to the Point of Delivery and from the Point of Redelivery to and through its
plant and facilities.
15.8 Customer warrants for itself, its successors and assigns, that
it will have at the time of delivery of gas for transportation hereunder good
title or valid right to
14
16
deliver such gas hereunder; that the gas it delivers hereunder shall be free
and clear of all liens, encumbrances, or claims whatsoever; and that it will
indemnify Mobile Gas and save it harmless from all claims, suits, actions,
damages, costs and expenses arising directly or indirectly from or with respect
to the title to gas tendered to Mobile Gas hereunder.
15.9 As between Customer and Mobile Gas, Customer shall be in
control and possession of the gas transported hereunder prior to delivery to
Mobile Gas at the Point of Delivery and after delivery by Mobile Gas to
Customer at the Point of Redelivery, and Mobile Gas shall be in control and
possession of the gas after the receipt of the same at the Point of Delivery
and until delivery by Mobile Gas to Customer at the Point of Redelivery. The
risk of loss for all gas transported hereunder shall be and remain with the
party having control and possession of the gas as herein provided.
15.10 Mobile Gas agrees to transport additional volumes of gas to
Customer for a period of up to thirty (30) days beyond the termination of this
Agreement in order to bring into balance any imbalance that exists at the
termination of this Agreement.
15.11 Customer may at its sole option and from time to time appoint
an Agent, and upon such appointment notify Mobile Gas of such appointment, to
represent Customer for purposes of making nominations, delivering gas to a
Delivery Point and adjusting balances. Customer acknowledges that Mobile Gas
may rely on instructions of Customer's duly appointed Agents as if such
instructions were made by Customer until such time as Customer sends Mobile Gas
a notice requiring Mobile Gas to no longer accept instructions from such Agent.
ARTICLE XVI - MISCELLANEOUS PROVISIONS
16.1 This Agreement may not be assigned by either party hereto
without the written consent of the other party hereto, such consent not to be
unreasonably withheld or delayed. Any assignment without prior consent shall
be void and without force and effect.
16.2 The effectiveness of this Agreement is subject to approval
hereof by the APSC.
ARTICLE XVII - ARBITRATION
17.1 Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled exclusively by arbitration
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association.
15
17
17.2 All arbitrations pursuant to this Agreement shall be held at
Mobile, Alabama.
17.3 There shall be three arbitrators. One of the arbitrators
shall be appointed by Mobile Gas, the second by Customer, and the third shall
be a neutral arbitrator selected by these two arbitrators. Such neutral
arbitrator shall be chairman of the arbitration panel.
17.4 The arbitration shall be decided by a majority vote of the
arbitration panel. The cost of arbitration, including the fees of the
arbitrators, shall be borne by the losing party, unless the arbitrators decide
otherwise.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed by its officer thereunto duly authorized as of the date first above
written.
WITNESS: MOBILE GAS SERVICE CORPORATION
/s/ G. Xxxxx Xxxxxxx, Xx. By: /s/ Xxxx X. Xxxxx
--------------------------------- --------------------------------
Its: President
--------------------------------
WITNESS: TUSCALOOSA STEEL CORPORATION
/s/ X. X. Xxxxxx By: /s/ X. X. Xxxx
-------------------------------------- --------------------------------
Its: Vice President Finance
--------------------------------
16
18
EXHIBIT '"A"
XXXXXXXX ISLAND SITE
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION SERVICE CONDITIONS
[**proprietary information deleted**]
19
EXHIBIT "B"
XXXXXXXX ISLAND SITE
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION SERVICE CONDITIONS
[**proprietary information deleted**]
