Contract for Supply and Use of Natural Gas
Contract
for Supply and Use of Natural Gas
User:
Beijing Zhong Ran Wei Ye Gas Co., Ltd. (hereinafter referred to as Party
A)
Supplier:
Tianjin Dagang Oilfield Transportation Co., Ltd. (hereinafter referred to as
Party B)
With
the
purpose to clarify rights and obligations for Party A and Party B in the supply
and use of gas, both Parties agree to enter into this Contract through
consultation, pursuant to The
Contract Law of the People's Republic of China, Administrative Measures on
Municipal Gas, Regulations on Safety Management of Municipal
Gas,
and
other relevant laws, rules and regulations.
Article
One Location, Type, Purpose and Amount of Gas Consumption
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1.
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Location:
In the North China No.1 Machinery Plant in the eastern part of Qinxian
County, Hebei Province and in Zhonggang Shareholding Co.,Ltd on the
North
Ringroad in Yutian County, Hebei
Province.
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2.
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Type:
Compressed Natural Gas (CNG)
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3.
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Purpose:
Gas for industrial production by Party
A
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4.
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Amount:
In the first three months since gas supply commences, supply to Qinxian
County shall range within five thousand (5000) cubic meters per day;
three
months after the supply commences, supply to Yutian County shall
range
within ten thousand (10,000) cubic meters per day. Should major changes
appear to the abovementioned monthly gas supply, especially when
monthly
supply fails to meet the agreed amount, the Parties shall promptly
negotiate and sign supplementary
agreements.
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Article
Two Pattern and Quality of Gas Supply
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1.
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Pattern
of Gas Supply
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Party
B
shall supply gas to Party A via vehicle.
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2.
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Quality
of Gas Supply
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The
quality of natural gas provided by Party B shall meet the standards of
CategoryⅡ
natural
gas set forth in GB17820-1999. Party B shall submit to Party A regular reports
on gas composition, and Party A can carry out regular sampling tests. Party
A
shall use gas source from the CNG mother station at Dagang Oil field.
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3.
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In
order to avoid suspense of gas supply due to emergencies, Party A
shall
provide a gas storage backup vehicle at each gas supply
location.
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Article
Three Price, Metering and Payment of Gas Consumption
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1.
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Price
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Price:
RMB 2.3 (SAY: two point three RMB) per cubic meter for Qinxian County and RMB
2.4 (SAY: two point four RMB) per cubic meter for Yutian County (gas fees,
transportation fees and other charges included).
Should
the price of natural gas be modified by the government through normal macro
price adjustment, the Parties shall negotiate and sign supplementary agreements
to adjust the price according to the documents of National Development and
Reform Commission and market price; should the price of fuel oil fluctuate
over
6%, the price of gas supply shall be adjusted accordingly.
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2.
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Metering
and Payment
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2.1
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Metering
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Metering
shall be based on interchange receipts at CNG filling stations. Should any
disputes arise, the Parties shall resolve through consultation.
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2.2
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Payment
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Payment
shall be made monthly, in the form of deposit. Party A shall pay RMB300,000
(SAY: three hundred thousand RMB) as deposit to Party B in advance. Party B
shall verify and deduct due amount according to actual gas consumption. When
deposit decreases to less than RMB 50,000 (SAY: fifty thousand RMB), Party
B
shall inform Party A in writing or by phone calls to promptly make up the
deposit amount. When deposit decreases to less than RMB 10,000 (SAY: ten
thousand RMB), Party B has the right to unilaterally suspense gas supply, and
Party A shall bear its loss due to this conduct. Payment shall be made on the
20th
day of
each and every month based on the aggregate amount. Party B shall provide VAT
invoice and cargo transport invoice.
Article
Four Delivery point and Risk Transfer
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1.
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Delivery
point: In the North China No.1 Machinery Plant in the eastern part
of
Qinxian County, Hebei Province and in Zhonggang Shareholding Co.,Ltd
on
the North Ringroad in Yutian County, Hebei
Province.
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2.
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When
Party B delivers CNG via vehicle to the delivery point, both the
ownership
of CNG and vehicle risks are transferred to Party
A.
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Article
Five Rights and Obligations of Party B
Supply
gas to Party A in accordance with the time, quantity and quality hereby agreed
in this Contract.
Article
Six Rights and Obligations of Party A
Receive,
use CNG and make payment as hereby agreed in this Contract.
Article
Seven Liabilities for Breach of Contract
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1.
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Party
A’s Liabilities for Breach of Contract
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Should
Party A breach any term in this Contract, Party B has the right to terminate
this Contract and require Party A to bear liabilities for breach of
contract.
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2.
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Party
B’s Liabilities for Breach of
Contract
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Should
Party B fail to supply gas according to the time, quantity and quality agreed
in
this Contract, Party A has the right to terminate this Contract and require
Party B to bear liabilities for breach of contract.
Article
Eight Contract Life
The
term
of cooperation between the two Parties is 5 years. This Contract is valid from
January 10, 2007 to January 9, 2008, as presently agreed by the Parties.
Contracts shall be made yearly. When cooperation expires, if Party A still
needs
gas supply from Party B, a separate Supply Contract shall be signed by and
between the two Parties.
Article
Nine Amendment to the Contract
Should
the Parties need to amend the terms of this Contract or handle issues not
covered under this Contract, they shall sign supplementary agreements through
consultation. Such supplementary agreements shall have the same force and effect
as this Contract.
Article
Ten Settlement of Disputes
Should
any disputes arise from the implementation of this Contract, the Parties shall
attempt in the first instance to resolve such dispute through friendly
consultations. Should such consultation or mediation fail, the Parties shall
file litigation at the People’s Court of the region where this Contract is
signed.
Article
Eleven Exemption Condition
In
any
case of Force Majeure event which is unforeseeable, unavoidable or
insurmountable, The Party Claiming Force Majeure shall inform the other Party
promptly. Both Parties shall minimize losses due to Force Majeure through active
measures.
Article
Twelve Miscellaneous Provisions
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1.
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Party
B shall provide the following
licenses:
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1.1
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Gas
Filling License
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1.2
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Hazardous
Substance Business License
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1.3
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Hazardous
Substance Transport License
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1.4
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Gas
Composition Test Report ( on regular
basis)
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2.
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Any
loss due to Force Xxxxxx shall be borne respectively by each Party,
or be
resolved through consultation.
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3.
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As
for any other matters not covered under this Contract, the Parties
shall
sign supplementary agreements through
consultation.
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4.
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This
Contract is executed in four originals, each Party holds two originals.
This Contract shall enter into force when duly signed and sealed
by the
two Parties.
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Party
A:
Beijing
Zhong Ran Wei Ye Gas Co., Ltd.
Sealed
Representative:
Signed
Party
B:
Tianjin
Dagang Oilfield Transportation Co., Ltd
Sealed
Representative:
Signed
Date:
January 8, 2007
Signatory
Location: Dagang Oilfield
