Exhibit 10.5
FIRM NATURAL GAS TRANSPORTATION AGREEMENT
THIS FIRM NATURAL GAS TRANSPORTATION AGREEMENT ("Agreement") is entered
into this 29/th/ day of March, 1991 between TENNESSEE GAS PIPELINE COMPANY, a
Delaware corporation, herein called "Transporter", and PROJECT ORANGE
ASSOCIATES, L.P., a Delaware limited partnership, herein called "Shipper",
pursuant to the following general terms and representations.
W I T N E S S E T H:
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WHEREAS, Transporter owns and operates a natural gas transmission pipeline
system which extends in a northeasterly direction from its principal sources of
supply in Texas and Louisiana through the States of Texas, Louisiana, Arkansas,
Mississippi, Alabama, Tennessee, Kentucky, West Virginia, Ohio, Pennsylvania,
New York, New Jersey, Massachusetts, New Hampshire, Rhode Island and
Connecticut; and
WHEREAS, Shipper has entered into certain gas purchase contracts with
various producers providing for the sale by such producers to Shipper of a
maximum quantity of 20,000 dekatherms ("Dth") of natural gas per day and has
made arrangements for the delivery of such natural gas for the account of
Shipper to the points listed in Exhibit A hereto; and
WHEREAS, G.A.S. Orange Development, Inc. ("G.A.S. Orange") and Transporter
have entered into a Precedent Agreement dated January 13, 1989 (the "Precedent
Agreement"), pursuant to which Transporter agreed to file an application with
the Federal Energy Regulatory Commission ("FERC") for the necessary
authorizations to (i) provide firm natural gas transportation service of a daily
quantity not to exceed 20,000 Dth of natural gas, and (ii) construct and operate
the facilities necessary to provide such firm transportation service;
WHEREAS, G.A.S. Orange has assigned all of its rights and obligations under
the Precedent Agreement to Shipper; and
WHEREAS, Transporter has now been authorized by the FERC order issued on
September 13, 1990 in Docket No. CP88-171-001, to render the firm transportation
service described herein and to construct and operate the necessary facilities
therefor; and
WHEREAS, Transporter and Shipper wish to set forth herein the specific
terms and conditions under which Transporter will provide such transportation
service to Shipper;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, Transporter and Shipper agree as follows:
ARTICLE I
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DEFINITIONS
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1.1 Equivalent Quantity -- shall mean, during any given period of time, a
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quantity of gas equal to the quantity of gas received by Transporter
for the account of Shipper for transportation hereunder at the Point(s)
of Receipt, less quantities for Transporter's system fuel and use
requirements and gas lost and unaccounted for associated with this
transportation service, which may be provided by Transporter or Shipper
as specified in Article VIII, Section 4. For purposes of determining an
Equivalent Quantity, quantities of gas shall be stated in dekatherms
and measured on a dry basis.
1.2 Point(s) of Receipt -- shall mean those points as specified in Exhibit A
-------------------
attached hereto at which Transporter shall receive gas for
transportation hereunder and such other points as may be agreed to from
time to time by both parties.
1.3 Point(s) of Delivery -- shall mean those points as specified on Exhibit A
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attached hereto at which Transporter shall deliver gas to Shipper and
such other points as may be agreed to from time to time by both
parties.
1.4 Transportation Quantity -- shall mean the maximum daily quantity of natural
-----------------------
gas that Transporter hereby agrees to receive, subject to Article II
herein, for the account of Shipper at the Point of Receipt during the
term hereof, which shall be 20,000 Dth, provided that Transporter is
under no obligation to receive a volume in excess of 20,000 Mcf.
ARTICLE II
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TRANSPORTATION
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2.1 Transportation Service -- After receipt and acceptance by Transporter of
----------------------
FERC authorization to provide service hereunder and completion of the
facilities required to provide such service, beginning on the
Commencement Date (as defined in Article VIII, Section 8.1 hereof),
Transporter agrees to accept and receive daily, on a firm basis, at the
Point of Receipt, from Shipper such quantity of gas as Shipper makes
available up to the Transportation Quantity and to transport and
deliver for Shipper to the Point(s) of Delivery an Equivalent Quantity
of gas.
ARTICLE III
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RECEIPT AND DELIVERY PRESSURES
------------------------------
3.1 Shipper shall cause the delivery of natural gas to Transporter at the
Point(s) of Receipt to be at pressures sufficient to enter
Transporter's pipeline system.
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3.2 Transporter shall cause the delivery of natural gas to Shipper at the
Point(s) of Delivery as nearly as practicable at Transporter's line
pressure, provided that pressure shall not be less than 400 pounds per
square inch gauge.
ARTICLE IV
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CONTROL AND BALANCING OF DELIVERIES
-----------------------------------
The control and balancing of deliveries shall be as provided in Article
III, Section 7 of the General Terms and Conditions of Transporter's FERC Gas
Tariff Volume No. 1.
ARTICLE V
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QUALITY SPECIFICATIONS AND STANDARDS FOR MEASUREMENTS
-----------------------------------------------------
For all gas received, transported and delivered hereunder, the parties
agree to the quality specifications and standards for measurement provided for
in Articles II and III of the General Terms and Conditions of Transporter's FERC
Gas Tariff Volume No. 1.
ARTICLE VI
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FACILITIES
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Transporter shall construct, install, own and operate the facilities,
including but not limited to measurement facilities and hot tap, necessary for
Transporter to receive and deliver the gas as contemplated herein for Shipper's
account at the Point(s) of Receipt and the Point(s) of Delivery.
ARTICLE VII
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DISPATCHER'S NOTIFICATION
-------------------------
Shipper's dispatcher shall notify Transporter's dispatcher of the daily
volume which Shipper desires Transporter to transport on any day in the manner
set forth in Article III, Section 4 of the General Terms and Conditions of
Transporter's FERC Gas Tariff Volume No. 1.
ARTICLE VIII
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RATES FOR SERVICE
-----------------
8.1 Commencement of Service. Upon completion of construction of the pipeline
-----------------------
facilities required to enable Transporter to render the transportation
service
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described herein, Transporter will notify Shipper in writing of the date on
which Transporter will be ready to commence transportation service under
this Contract. The "Commencement Date" shall be 30 days after the date of
Transporter's notice.
8.2 Transportation Rates -- Beginning on the Commencement Date, the
--------------------
compensation to be paid by Shipper to Transporter for the
transportation service provided for herein shall be payable monthly in
accordance with Article X hereof and shall be equal to the sum of the
following: (a) the product of (1) the sum of the "D-l" charges for
Segments 1 and 2 under Transporter's NET-EU Rate Schedule and (2) the
Transportation Quantity, (b) the product of (1) the sum of the "D-2"
charges for Segments 1 and 2 under Transporter's NET-EU Rate Schedule
and (2) the "D-2 Billing Determinant" for the applicable billing
period as set forth in Exhibit B hereto, (c) the product of (1) the
sum of the "Commodity" charges for Segments 1 and 2 under
Transporter's NET-EU Rate Schedule and any applicable surcharges as
included in Transporter's effective FERC Gas Tariff and (2) the
quantity of gas delivered by Transporter to Shipper during the
applicable billing period. References herein to Transporter's NET-EU
Rate Schedule shall include any successor or substitute rate schedule.
8.3 Fuel and Use Quantity Prior to the Commencement Date (as defined in
---------------------
Section 8.1 hereof) Transporter and Shipper shall mutually agree whether
Transporter or Shipper shall supply the fuel required for transportation
hereunder. In the event Transporter and Shipper agree that Transporter
shall supply the fuel required for fuel and losses ("Fuel and Use
Quantity"), Transporter shall charge Shipper an amount equal to the
product of (a) Transporter's Current Average Cost of Purchased Gas plus
adjustment pursuant to Section 3 of Article XXIII of Transporter's FERC
Gas Tariff, Volume No. 1, and (b) the Fuel and Use Quantity.
Transporter's provision of the fuel required for transportation
hereunder is subject to termination on 30 days' written notice, at the
option of either Transporter in its sole discretion or Shipper in its
sole discretion. In the event that Transporter does not provide the Fuel
and Use Quantity as stated above, then Shipper shall make available to
Transporter from the Transportation Quantity the amount of gas equal to
the Fuel and Use Quantity. For purposes of this Agreement, the Fuel and
Use Quantity will be computed and allocated in the same manner in which
Fuel and Use Quantity is computed and allocated for service under
Transporter's Rate Schedule FT-A.
8.4 Rate Changes -- Shipper agrees that Transporter shall have the unilateral
------------
right pursuant to this Article VIII to file and make effective changes
in the rates, charges, and conditions applicable to service pursuant
to the Rate Schedule under which this service is rendered and/or any
provisions of the General Terms and Conditions of Transporter's FERC
Gas Tariff Volume No. 1 as such Tariff may be revised or replaced from
time to time. Without prejudice to Shipper's right to contest such
charges, Shipper agrees to pay the effective rate for service rendered
pursuant to this Agreement, subject to FERC review and adjustment.
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ARTICLE IX
RESPONSIBILITY DURING TRANSPORTATION
------------------------------------
As between the parties hereto, it is agreed that from the time gas is
delivered by Shipper to Transporter at the Point of Receipt and prior to
delivery of such gas to or for the account of Shipper at the Point(s) of
Delivery, Transporter shall have the unqualified right to commingle such gas
with other gas in its pipeline system and shall have the unqualified right to
handle and treat such gas as its own.
ARTICLE X
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XXXXXXXX AND PAYMENTS
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Transporter and Shipper agree that the obligations of Transporter and
Shipper for billing and payment for the services provided hereunder shall be in
accordance with Articles V and VI of the General Terms and Conditions of
Transporter's FERC Gas Tariff Volume No. 1.
ARTICLE XI
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RATE SCHEDULES AND GENERAL TERMS AND CONDITIONS
-----------------------------------------------
This Agreement and all terms and provisions contained or incorporated
herein are subject to the provisions of Transporter's applicable Rate Schedules
and of Transporter's General Terms and Conditions on file with the FERC, or
other duly constituted authorities having jurisdiction, and as the same may be
legally amended or superseded, which Rate Schedules and General Terms and
Conditions are by this reference made a part hereof.
ARTICLE XII
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TERM OF AGREEMENT
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This Agreement shall become effective on the date hereof; provided,
however, that Transporter shall be under no obligation to receive or to deliver
any quantities of natural gas hereunder prior to the Commencement Date as
defined in Article VIII, Section 8.1 hereof. This Agreement shall continue in
force and effect until the expiration of 20 years following the Commencement
Date hereunder and from year to year thereafter; provided, however, that either
party may elect to terminate this Agreement as of the end of such 20 year period
or as of the end of any extended annual period by giving 12 months prior written
notice of such termination to be effective on the expiration of such 20 year
period or the applicable anniversary of such period.
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ARTICLE XIII
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REGULATION
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This Agreement shall be subject to all applicable governmental statutes and
all applicable and lawful orders, rules, and regulations.
ARTICLE XIV
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WARRANTY
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Shipper warrants that it will at the time of delivery of gas to Transporter
hereunder have good title to and the good right to deliver all gas so made
available. Transporter warrants that it will, at the time of delivery of gas for
the account of Shipper hereunder, have the right to deliver all such gas. Each
party warrants to the other and such other party's successors and assigns that
the gas covered by its warranty hereunder shall be free and clear of all liens,
encumbrances, or claims against the warranting party or its affiliates for use
of property of such party or its affiliates. Each party will indemnify the other
and save it harmless from all suits, actions, debts, accounts, damages, costs,
losses, and expenses arising from or out of any adverse claims regarding title
and/or right to delivery of any or all persons against the indemnifying party
and/or to royalties, taxes, license fees, or charges assessed against such
party. Title to the gas received, transported, and delivered hereunder shall at
all times remain with Shipper and shall not pass to Transporter; provided that
title to the gas delivered by Shipper hereunder for fuel and use requirements of
Transporter as set forth in Article VIII herein, shall pass to Transporter upon
delivery of said gas to Transporter at the Point(s) of Receipt.
ARTICLE XV
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ASSIGNMENTS
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15.1 Either party may assign or pledge this Agreement and all rights and
obligations hereunder under the provisions of any mortgage, deed of
trust, indenture, or other instrument which it has executed or may
execute hereafter as security for indebtedness, provided such
assignment is consistent with the terms and conditions of the Letter
of Credit Drawing Agreement executed by Shipper and Transporter.
Either party may without relieving itself of its obligations under
this Agreement, assign any of its rights hereunder to a wholly owned
affiliate, but otherwise no assignment of this Agreement or any of the
rights or obligations hereunder shall be made unless there first shall
have been obtained the written consent thereto of the other party,
which consent shall not be unreasonably withheld.
15.2 Any entity which shall succeed by purchase, merger, or consolidation to the
properties, substantially or as an entirety, of either party hereto
shall be entitled to the rights and shall be subject to the
obligations of its predecessor in interest under this Agreement.
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ARTICLE XVI
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MISCELLANEOUS
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16.1 No modification of or supplement to the terms and provisions hereof shall
be or become effective, except by the execution of supplementary
written consent.
16.2 No waiver by either party of any one or more defaults by the other in the
performance of any provisions of this Agreement shall operate or be
construed as a waiver of any future default or defaults, whether of a
like or of a different character.
16.3 Except as herein otherwise provided, any notice, request, demand,
statement, or xxxx provided for in this Agreement or any notice which
either party may desire to give to the other shall be in writing and
mailed by registered or certified mail to the post office address of
the party intended to receive the same, as the case may be, as
follows:
TRANSPORTER: Tennessee Gas Pipeline Company
------------ P. 0. Xxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Market Services
Invoices: Attention: Gas Accounting
Payments: Attention: Treasury Department
Gas Analysis and Attention: Measurement Department
Volume Statements:
SHIPPER Project Orange Associates, L.P.
------- 000 Xxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxx
or to such other address as either party shall designate by formal
written notice to the other. Routine communications, including monthly
statements and payments, may be mailed by registered, certified or
ordinary mail.
16.4 This Agreement shall be interpreted under the laws of the State of Texas,
except insofar as such laws refer to the laws of another jurisdiction.
16.5 Exhibits A and B attached hereto are incorporated herein by reference
and made a part of this Agreement for all purposes.
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16.6 This Agreement, as of the date hereof, shall supersede and cancel the
Precedent Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in multiple counterparts as of the date first hereinabove written.
TENNESSEE GAS PIPELINE COMPANY
BY: /s/
_______________________________________
PROJECT ORANGE ASSOCIATES, L.P.
By G.A.S. Orange Partners, L.P.,
Its General Partner
By G.A.S. Orange Development, Inc.,
Its General Partner
BY: /s/ Xxxx Xxxxxx
_______________________________________
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EXHIBIT A
TO FIRM TRANSPORTATION AGREEMENT DATED MARCH 29, 1991 BETWEEN PROJECT ORANGE
ASSOCIATES, L.P. AND TENNESSEE GAS PIPELINE COMPANY ("TENNESSEE")
RECEIPT POINT(S): Point of interconnection between Tennessee and the
---------------- facilities of TransCanada PipeLines Limited at the
Niagara River near Lewiston, New York
DELIVERY POINT(S): New delivery point located at MLV 241 on Tennessee's
----------------- "200" main line near Syracuse, New York.
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EXHIBIT B
TO FIRM TRANSPORTATION AGREEMENT DATED MARCH 29, 1991
BETWEEN PROJECT ORANGE ASSOCIATES, L.P. AND
TENNESSEE GAS PIPELINE COMPANY
Billing Period Number of Days D-2 Billing
-------------- -------------- Determinants
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January 31 527,000
February 28 476,000
March 31 527,000
April 30 510,000
May 31 527,000
June 30 510,000
July 21 527,000
August 31 527,000
September 30 510,000
October 31 527,000
November 30 510,000
December 31 527,000
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