CNG Sales Contract
Seller:
Huabei Oilfield Branch Company of PetroChina Company Limited.
Legal
Representative:
Authorized
Agent:
Bank:
Huabei Oilfield Branch, Industrial & Commercial Bank of China
Account
No.: 0000000000000000000
Tel:0000-0000000
Buyer:
Beijing Zhong Ran Wei Ye Gas Co., Ltd.
Legal
Representative:
Authorized
Agent:
Bank:
Account
No.:
Tel:
Signatory
Location:
Renqiu,
Hebei Province
Date:
January, 12, 2007
Table
of
Contents
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1.
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Definitions
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2.
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Delivery
Point, Delivery Mode and Pressure
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3.
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Period,
Quantity and Monthly Plan of Gas
Supply
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4.
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Quality
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5.
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Measurement
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6.
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Nature
and Scope of Gas Consumption
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7.
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Price
and Adjustment
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8.
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Inspection
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9.
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Settlement
and Payment
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10.
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Exemption
Conditions and Determination
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11.
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Liabilities
for Breach of Contract
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12.
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Amendment,
Transfer and Cancellation of Contract
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13.
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Effectiveness
of Contract
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14.
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Dispute
Settlement
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15.
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Miscellaneous
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This
Contract is made by and between PetroChina Huabei Oilfield Company (hereinafter
called the Seller) and Beijing Zhong Ran Wei Ye Gas Co., Ltd. (hereinafter
called the Buyer), for the sale and purchase of natural gas.
In
accordance with The
Contract Law of the People's Republic of China,
with a
purpose to clarify rights and obligations for Party A and Party B, to build
an
equal trading relationship, and to supply and use natural gas in a safe,
economic, stable and reasonable manner, after considering the Seller’s current
production and supply of natural gas as well as the Buyer’s current facilities
and consumption, the Seller agrees to supply natural gas to the Buyer and the
Buyer agrees to use gas and make payment, according to the terms and provisions
hereinafter set forth in this Contract, through friendly
consultation.
1.
Definition
For
the
purposes of this Contract, the following terms and phrases shall have the
meaning and interpretation given herein.
Natural
Gas
shall
mean a mixture of combustible gases formed and moved under various geological
conditions and kept underground under certain pressure, consisting primarily
of
methane.
Standard
Conditions
shall
mean an environment with a temperature of 20 degrees Celsius (293.15K) and
an
absolute pressure of 101.325 kPa(standard atmospheric pressure).
Standard
Cubic Meter
shall
mean the quantity of natural gas, which at standard conditions, occupies the
volume of one cubic meter.(referred to as “cubic meter”in this
Contract)
Period
of Gas Supply shall
mean the period from the day gas supply commences to the day it terminates, as
agreed in this Contract.
Contract
Gas Amount
shall
mean the yearly, monthly and daily gas amount as agreed between the two Parties
under this Contract.
Annual
Contract Gas Amount
shall
mean the amount of gas supply and consumption for a year as agreed under this
Contract during the period of gas supply.
Monthly
Contract Gas Amount
shall
mean the amount of gas supply and consumption for a month as agreed under this
Contract during the period of gas supply.
Daily
Contract Gas Amount
shall
mean the average daily gas amount, after excluding the number of inspections
days and gas consumption on inspection days.
Delivery
Point shall
mean the place where the Seller delivers and measures, and the Buyer receives
CNG, which is also the place where the ownership and risk of CNG is shifted
to
the Buyer.
1.10
Delivery
point Pressure
shall
mean the instantaneous pressure at the natural gas delivery measuring
instruments.
1.11
Gas
Quality shall
mean the quality standards of natural gas as agreed in this Contract.
1.12
The Seller’s
Gas Production and Transmission Facilities
shall
mean the Seller’s gas xxxxx, well
site
facilities, cleaning facilities, pipelines and networks, and other facilities
necessary for gas production, treatment, transmission, delivery and measurement,
all the way to delivery point.
1.13
The
Buyer’s Gas Consumption Facilities
shall
mean the Buyer’s facilities necessary for gas transmission, treatment, and
consumption from delivery point to gas consumption point.
1.14
Nature
of Gas Consumption
shall
mean the Buyer’s specific purposes for gas consumption.
2.
Delivery
Point, Delivery Mode and Pressure
2.1
Delivery point is the off-take joint after the delivery measuring instruments
at
the CNG station of Fourth Oil Extraction Plant.
2.2
The
Seller delivers natural gas to the Buyer at the delivery point through
pipelines. Ownership and risk of natural gas thus is shifted to the
Buyer.
2.3
The
Buyer adopts the __first__ method among the following to transport
CNG.
2.3.1
Transportation by the Buyer’s vehicle
2.3.2
Transportation by the Seller’s vehicle
3.
Period, Quantity and Monthly Plan of Gas Supply
3.1
Period of Gas Supply: from 0:00 AM of January 12, 2007 to 12:00 PM of December,
31, 2007.
3.2
Gas
Amount
3.2.1
In
accordance to the Seller’s production and supply as well as the Buyer’s demand,
both Parties agree the gas amount of natural gas during the supply period under
this Contract, i.e. annual contract gas amount shall be 10million cubic
meters.
3.3
The
Seller shall provide stable gas supply to the Buyer as agreed in this Contract,
and the Buyer shall use gas in a stable manner and make payment on time as
agreed in this Contract.
3.4
Should the User still needs to increase gas consumption after the annual
contract gas amount has been consumed, the Seller shall try to meet the Buyer’s
demand, if it is possible through production growth or adjustment.
3.5
Monthly Gas Supply Plan
3.5.1
The
Seller shall arrange its natural gas production and the Buyer shall arrange
its
natural gas consumption both in a balanced manner, based on the gas amount
agreed in this Contract.
3.5.2
While securing the annual contract gas amount, the Buyer can make proper
adjustment to monthly gas supply plans provided by the Seller, according to
its
production and consumption situation. But adjustment to daily gas amount, in
principal, shall be within ±10% of daily average contract amount (exemption
conditions in this Contract not included).
3.6
The
Buyer shall provide the Seller with gas consumption demand plans for next month
in writing before the 15th
day of
the current month, based on the abovementioned principal. The Seller shall,
upon
receiving such written notice for adjustment, reply within 10 days, otherwise
the Seller shall be deemed as having accepted the Buyer’s request. If the Buyer
does not provide demand plan for next month, the Seller shall make gas supply
arrangement according to production and network situation, while securing annual
contract gas amount, as agreed in this Contract.
4.
Quality
4.1
During the term of this Contract, the quality of gas provided by the Seller
to
the Buyer shall meet the standards of Category
natural
gas set forth in GB17820-1999 Natural Gas, the national standards of the
People’s Republic of China.
5.
Measurement
5.1
In
accordance with the
Metrology Law of The People’s Republic of China
and
Gas
Plan (1987) No.2001 the Interim Measures Governing Natural Gas Commodity,
measurement
of natural gas shall be based on the Seller’s measurement value at delivery
point.
5.2
Natural gas shall be measured in volume.
5.3
Measuring instruments shall be installed, adjusted and tested according to
relevant national standards and regulations.
5.4
Should the Buyer have any objection to the measurement value, the Buyer shall
inform the Seller in writing within 5 days upon receiving settlement sheet
or
payment invoice, and such dispute shall be resolved through consultation. Should
such consultation fail, the Buyer can apply to government-authorized testing
institutions for tests on the Seller’s natural gas delivery measuring
instruments. Should the Seller fail such tests, the Seller shall be liable
for
the testing cost; should the Seller pass such tests, the Buyer shall be liable
for the testing cost.
5.5
Before the settlement of such disputes, the Buyer shall make payment based
on
the Seller’s measurement. The Buyer shall not refuse to pay. Adjustment shall be
made after such dispute is resolved. The standard and method of adjustment
is:
should the Seller’s measuring instruments fail to meet standards, payment shall
be made according to the average measurement value of ten days before such
dispute; should the Seller’s measuring instruments meet standards, payment shall
be made according to the Seller’s actual measurement value.
5.6
Management and Adjustment of measuring instrument at delivery point. The
Seller’s measuring instruments at delivery point shall be managed and maintained
by the Seller. Such measuring instruments shall be tested regularly in
accordance with national testing regulations. The Buyer has custodial right
over
the Seller’s delivery measuring instruments. When the Seller carries out testing
on its measuring instruments, the Buyer can send personnel with relevant
measurement testing qualifications to supervise, but specific operation shall
be
implemented by the Seller’s personnel.
6.
Nature
and Scope of Gas Consumption
6.1
Nature of Gas Consumption: Industrial and civil gas consumption.
6.2
Scope
of Gas Consumption: Beijing, Tianjin and Hebei.
7.
Price
and Adjustment
7.1
Gas
price for CNG as agreed by now: RMB 1.65 per cubic meter from January 12 to
March 31; RMB1.65 per cubic meter from January 1 to December 31; RMB 1.55 per
cubic meter from April 1 to October 31.
7.2
During the term of this Contract, should the price of natural gas be adjusted
by
the government, gas price shall adopt the new price since the day of adjustment.
8.
Inspection
8.1
Both
Parties shall cooperate with planned or interim inspections of natural gas
production, transmission and supply facilities. Changes or fluctuations of
gas
supply or consumption due to regular or interim inspections shall be controlled
within a reasonable range. No liabilities shall be incurred from impact on
gas
supply and consumption due to such inspections.
8.2
Simultaneous Planned Inspection
8.2.1
According to the Seller’s inspection plan for natural gas production and
transmission facilities, the Buyer shall cooperate and carry out inspection
during the Seller’s inspection period. During the Seller’s inspection, should
the Buyer refuse to decrease or suspend gas supply, the Seller can only supply
gas according to actual production and transmission capacity during such
periods. The Seller shall not be liable if gas pressure, quantity or quality
fail to meet agreements in this Contract or any other events thus incurred.
8.3
Interim Inspection
8.3.1
Should any Party need to suspend gas supply for interim inspection due to safety
hazards, transformation or pipe touching in gas xxxxx, supply and consumption
facilities, or pipeline and network, such Party shall inform the other Party
in
writing or by phone, so that the other Party can make necessary preparation.
The
other Party shall give support during such period.
9.
Settlement and Payment
9.1
With
the purpose to ensure that the Buyer can use natural gas in a stable and
safe
manner, and the Seller can receive payment, the Parties agree to adopt the
following methods for settlement and payment.
9.2
The
Buyer pays a deposit of RMB 960,000 (Say: Nine hundred and sixty thousand)
for a
period of 15 days once at a time. The total contract price is RMB 16,000,000
(Say: sixteen million).
9.3
Payment shall be made based on the measurement value at the delivery
point.
9.4
The
Seller can notify the Buyer to pay deposit for the next period in writing or
by
phone 5 days before the present period ends. The Buyer shall pay deposit for
the
next period before the current period ends (should there be remaining deposit
from previous period, the Buyer shall make up full deposit for one period).
If
the Seller does not receive the Buyer’s deposit for the next period, the Seller
has the right to suspend gas supply without noticing the Buyer when the Buyer’s
deposit has been consumed. The Buyer shall bear all liabilities and losses
thus
incurred.
9.5
Method of Payment: before each settlement period ends, the Buyer shall pay
deposit for the next period through bank transfer or cheque to the Seller’s bank
account as agreed in this Contract. Without written approval from the Seller,
the Buyer shall not change the Seller’s bank account or account number, as
agreed in this Contract.
9.6
Time
of Payment
After
this Contract is signed into effect, the Buyer shall make the first payment
to
the Seller’s account before January 12, 2006. For the following payments, the
Buyer shall pay deposit for the next period before the previous period ends.
If
the Seller does not receive deposit for the next period, it shall have the
right
to suspend gas supply when the Buyer’s deposit has been consumed.
9.7
Either Party shall have the right to check the other Party’s measurement curve,
document records and other materials necessary to verify the correctness of
statements and invoices. Any statement, invoice or payment, if there is no
objection within 2 years since the submission of statement, providing of invoice
or settlement of payment, shall be final.
10.
Exemption Conditions and Determination
10.1
Exemption conditions under this Contract refer to conditions which can exempt
the Parties from liabilities for breach of contract, including Force Majeure
and
other exemption conditions agreed between the Parties.
10.2
Force Majeure shall mean objective situations which are unforeseeable,
unavoidable or insurmountable, including but not limited to earthquake, land
slide, flood, hurricane, war, riot, etc.
10.3
Other exemption conditions: accidents occur to the Seller’s gas production and
transmission facilities and the Buyer’s gas consumption facilities, with a
precondition that such Party has adopted some reasonable measures which still
can’t prevent, avoid or eliminate such accidents.
10.4
In
cases of situations as described in 10.2 and 10.3, the Claiming Party shall
promptly inform the other Party, and both Parties shall take active measures
to
minimize losses. The Claiming Party shall provide the other Party with effective
written documents within 5 days after such event happens. If the other Party
needs to verify the situation, it shall request within 5 days since it receives
such written documents, otherwise, it shall been deemed as having recognized
the
documents.
11.
Liabilities for Breach of Contract
11.1
The
Seller’s liabilities for breach of Contract
11.1.1
If
this Contract is prevented entirely from being enforced, due to the Seller’s
reasons (excluding exemption conditions under this Contract), the Seller shall
pay 0.1% of annual contract payment to the Buyer as penalty.
11.2
The
Buyer’s liabilities for breach of Contract
11.2.1
If
this Contract is prevented entirely from being enforced, due to the Buyer’s
reasons (excluding exemption conditions under this Contract), the Buyer shall
pay 0.1% of annual contract payment to the Seller as penalty.
11.2.2
Should the Buyer fail to make full payment on the payment day as agreed in
9.6,
the Buyer shall pay a late payment penalty of 0.3‰ per day, which shall be
accumulated daily from the day of delayed or partial payment to the day when
the
full payment and penalty is settled by the Buyer.
12.
Amendment, Transfer and Cancellation
12.1
Amendment: amendment to the Contract shall be made in written forms through
consultation.
12.2
Transfer: without written approval from the other Party in advance, neither
Party shall transfer all or part of its rights and obligations under this
Contract to a third Party.
12.3
Cancellation: in the following cases, this Contract shall be terminated in
advance:
12.3.1
Both Parties agree to the cancellation, which does not harm national or social
public interests.
12.3.2
One Party breaches the Contract, which makes it impossible or meaningless to
continue the implementation of this Contract.
12.3.3
The Buyer can not pay deposit, and the Seller has suspended gas supply for
3
months as agreed in this Contract, the Seller thus has the right to cancel
this
Contract unilaterally.
12.3.4
Force Majeure event defined under this Contract has lasted for 90 days, or
Force
Majeure event or situation severely affects the Buyer’s or the Seller’s
implementation of its obligations in this Contract, which make it impossible
to
realize the purpose of this Contract.
12.4
After the cancellation of this Contract, the parties still have the right to
pursue the breaching party’s liabilities.
13.
Effectiveness
13.1
This
Contract shall enter into force when duly signed and sealed by the authorized
representatives of both Parties. It shall expire when both Parties’ rights and
obligations have been fully performed.
13.2
As
for the matters not covered under this Contract, both Parties shall negotiate
supplementary provisions in written forms, which shall enter into force when
signed and sealed by authorized representatives of both Parties.
14.
Settlement of Disputes
14.1
During the term of this Contract, should any dispute arise, the Parties shall
promptly resolve through consultation. Should such consultation fail,
the_second
method
among the following shall be adopted:
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14.1.1
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Disputes
can be submitted for arbitration to be arbitraged in accordance with
currently effective arbitration rules. Such result shall be final,
with
binding effect on both Parties.
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14.1.2
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Disputes
can be taken to the People’s Court of the Seller’s region to be ruled
according to law.
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15.
Other
Agreements
From
the
day when this Contract is signed to 3 years after its term dues (the
confidential period), all terms and relevant information under this Contract
shall be kept confidential in accordance with this provision. Without written
approval from the other Party in advance, neither Party shall reveal terms
and
information of this Contract to a third Party within such period, nor to reveal
or disclose any material and data gained from the other Party.
Other
Provisions:
According
to laws and regulations, the Buyer shall make regular and irregular inspection,
maintenance and overhaul on natural gas transmission facilities, shall establish
mature safety management mechanism, to ensure the safety of the Seller’s and the
Buyer’s facilities.
Should
any damage or loss occur to the Seller’s facilities and personnel at the station
due to failures in the Buyer’s equipment and facilities, or due to the Buyer’s
personnel, the Buyer shall be liable for compensation.
Both
the
Seller and the Buyer shall strictly comply with safety operation regulations
for
petroleum and natural gas, equipped with all types of safety protection
facilities. Operation against regulations is strictly prohibited.
Should
the gasification mining area of Gas Bureau under CNPC Huabei Petroleum be in
urgent need of CNG supply, the Buyer shall first ensure the gas supply to such
gasification mining area.
This
Contract is prepared in six originals. The Seller holds four originals and
the
Buyer holds two originals.
Appendix:
the following appendixes are indispensable parts of this Contract. Such
appendixes shall have the same effect and force as this Contract.
