Exhibit 99
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is made and entered into this
4th day of June, Two Thousand and Four, by and between the following
parties:
The Independent State of Papua New Guinea and the Department of
Petroleum and Energy a government entity under the laws of Papua New
Guinea, having its principal office at Parliament House, Waigani NCD,
Papua New Guinea, and represented by the Honorable Sir Moi Avei, KBE,
MP, in his capacity as Minister for Petroleum and Energy. ("PNG
Government")
NIUGINI GAS & CHEMICALS Pte Ltd, a corporation established under the
laws of Singapore, and having its principal office at _______, and in
this matter represented by Xx. Xxx Xxxx in his capacity as Director.
("NGC")
I & G VENTURE CAPITAL CO LTD, a corporation established under the Laws
of Korea, and having its principal office at 00X, Xxxxx Xxxxxxxx X/X,
000-0 Xxxxxx-xxxx, Xxxxxxx-xx, Xxxxx, Xxxxx ( "I& G CAPITAL"),
collectively called "THE PARTIES", and
RENTECH, INC, a corporation under the laws of the USA and having its
principal offices at 0000, 00'xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
a gas to liquids technology provider, responsible for initial integrated
gas monetization proposals to the PNG Ministry and Department of
Petroleum and whose technology will be an integral part of this MOU, in
this matter represented by Mr. Xxxxx Xxxxxxxxx in his authorized
capacity. ("RENTECH") as a participant,
RECITALS
The Parties firstly declare as follows:
Whereas, the State, pursuant to the Oil and Gas Act, 1998, owns all
hydrocarbon at or below the surface of any land in Papua New Guinea
(PNG); and
Whereas, the State wishes to ensure as far as practicable that gas and
other resources in PNG are developed to the maximum economic, financial
and social benefit of the State, its economy and its citizens; and
Whereas, in an effort to increase revenue from natural gas production,
the PNG Government recognises the abundance of natural gas resources in
PNG which are potentially possible to be developed and operated in PNG
via a Northern Gas Pipeline for an Integrated Methane Refinery Complex
utilizing Gas To Liquids (GTL) technology, ammonium/urea technology
implementation, Liquid Natural Gas (LNG) and potentially Compressed
Natural Gas (CNG) components,( "The Project" ) and
Whereas, NGC or its nominees, as the Project vehicle, has expressed an
interest in the development and implementation of the Project, to be
supplied by the natural gas resources in Papua New Guinea, which remain
largely undeveloped, due to the characteristics of gas reserves and
other reasons, and has, through a formal association with RENTECH
access to RENTECH'S expertise in the development and application of an
Integrated Methane Refinery Complex, consisting of GTL proprietary
technology and existing patents, and RENTECH Inc. is able to issue a
License to the Parties for the use of this technology;
And Whereas NGC has associated itself with LNG and CNG technology for
integration into an Integrated Methane Refinery Complex for the Project,
and
And Whereas, I & G CAPITAL or its nominees, has expressed an interest in
assisting NGC in the development and implementation of the Project using
the natural gas resources in Papua New Guinea, through its
construction, funding and project implementation expertise in the
region, and
Whereas, the Parties realise the potential capability of each of the
Parties and therefore agree to co-operate and use their best endeavours
to explore the possibilities of business development with regard to
potential development of the Project including the marketing and
trading of its product.
Now therefore, the Parties hereby state as follows:
This non binding MOU sets forth the basic principles upon which the
Parties will negotiate to collaborate with each other for development
of the Project. NGC does however reserve the right as project principal
to remove, replace or introduce new project participants during the
course of the project.
1. NGC commitments, as the principal Project Vehicle:
a. Will undertake to prepare and fund the project assessment study
including all technical, economic, product specification,
market offtake, economic and financing aspects for the
potential northern pipeline and integrated methane complex
Project.
b. Investigate the full value chain within the gas processing
model in the Project through the Feasibility Study;
2. PNG Government commitments
1. Agree to support a feasibility study by NGC on a
northern/southern pipeline and a methane processing complex.
2. Assist with access to land and negotiations with landowners
along the potential pipeline routes.
3. Provide all relevant existing studies and reports previously
prepared for the northern and/or southern pipelines or for GTL,
CNG and LNG plants in PNG subject to procedures relating to
confidentiality of information.
4. Agree to hold discussions on business incentives, fiscal and
other matters that may be needed to support a potential
pipeline and integrated methane complex project.
5. Agree to use its best efforts to facilitate meetings between
NGC and licensees on matters related to gas reserves provided
that supply of natural gas is subject to commercial negotiation
with the owners of gas reserves (licensees).
6. Agrees to assist to provide any information the Government may
be able to provide on markets for product off-take.
7. Agree to discuss NGC request for implementation of a gas
processing licence regime to protect those entities that
pioneer development in similar industries or Projects in PNG.
3. PNG Government notes that NGC intends to prepare and submit a
business plan called the "Implementation Plan" for the realization
and implementation of a pipeline and integrated methane complex
project if the feasibility study establishes the viability of the
project.
COMMENCEMENT AND TERMINATION
4. This MOU shall commence and become effective upon being signed by
the Parties and shall terminate in the event of the following:
(i) The Parties mutually agree that this MOU terminates; or
(ii) Eighteen months (one and a half years) has elapsed from the
date of signing this MOU.
COST OF FEASIBILITY STUDY AND IMPLEMENTATION PLAN
5. a. NGC shall bear its own costs and expenses incurred in connection
with the preparation of the feasibility study.
b. If NGC requires assistance from a third party, the costs and
expenses incurred by the third party involvement will be the
responsibility of NGC.
CONFIDENTIALITY
6. Each Party shall keep in strict confidence and shall ensure that its
officers, directors, employees, affiliates, advisors, lenders,
counsel and representatives shall keep in strict confidence, all
information furnished by and belonging to the other Party in
relation to this MOU (hereinafter referred to the "Confidential
Information").
7. Without prior written consent of the other Parties, no Party shall
at any time disclose any Confidential Information to any third
parties, or use it for any purpose other than one related to this
MOU.
8. Confidential Information shall not include information, which
becomes part of the public domain through no fault of the receiving
Party.
9. Clauses 6, 7, and 8 shall survive after termination of this MOU.
10. With the exception of Clauses 6, 7, 8, and 9, this MOU is not
intended to binding, nor to be a demand to impose any obligation on
any of the parties hereto other than NGC and for further, other than
for each party to collaborate in good faith and use their best
endeavours for the purpose of this Feasibility Study.
11. No amendments, changes or modifications to this MOU shall be valid
except if the same is in writing and signed by all the Parties
hereto.
12. INTERPRETATION
Definitions
In this Agreement unless the context otherwise requires:
"Business Plan" means the plan referred to in clause 3.
"CNG" means Compressed Natural Gas.
"Feasibility Study" means the study on the feasibility of a project
involving a pipeline and an integrated methane complex in the northern
or southern part of Papua New Guinea.
"GTL" means Gas to Liquids.
"Implementation Plan" means the plan referred to in clause 3.
"Northern Pipeline" means a pipeline transporting natural gas to an
integrated methane complex in the northern part of Papua New Guinea.
"Project Vehicle" means Niugini Gas & Chemicals Pte Ltd and its
nominees.
"LNG" means Liquified Natural Gas.
"Southern Pipeline" means a pipeline from Gulf Province to Port Moresby
transporting natural gas to an integrated methane complex.
IN WITNESS WHEREOF, this MOU is made in triplicate and each original
Copy shall have equal legal force. Upon the representatives of the PNG
Government, Niugini Gas & Chemicals Pte Ltd and I & G Venture Capital Co
Ltd signing each copy, the Parties have caused this MOU to be executed
on the date first written in this MOU.
INDEPENDENT STATE OF PAPUA NEW GUINEA, represented by Hon Moi Avei KBE
MP, in his capacity as Minister for Petroleum and Energy
By : /s/ Moi Avei
Name : Hon Moi Avei KBE, MP
Title : Minister for Petroleum and Energy
Witnessed by : /s/ Hami Yawari
Name : Xxx. Xxxx Xxxxxx, MP
Title : Governor of Southern Highlands Province
NIUGINI GAS & CHEMICALS PTE LTD
By : /s/ U.C. Yang
Name : Xxx Xxx Xxxxx Xxxx
Title : Director
I & G VENTURE CAPITAL CO LTD
By : /s/ Ki Hoon Roh
Name : Ki Hoon Roh
Title : Director
Acknowledged by
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
Director
Rentech Inc.
