Exhibit 10.33
EXECUTION COPY
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PRODUCT PURCHASE AGREEMENT
BETWEEN
XXXXX REFINING & MARKETING, INC.
AND
PORT XXXXXX XXXXX COMPANY L.P.
August 19, 1999
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS................................................................. 1
Section 1.1 Definitions..................................................... 1
Section 1.2 Other Definitional Provisions................................... 2
ARTICLE 2. PURCHASE AND SALE........................................................... 2
Section 2.1 Purchase and Sale Obligations................................... 2
Section 2.2 Required Product Mix............................................ 2
Section 2.3 Xxxxx R&M's Obligations Absolute................................ 3
ARTICLE 3. DELIVERY; TITLE............................................................. 3
ARTICLE 4. PRICE, BILLING AND PAYMENT.................................................. 4
Section 4.1 Price........................................................... 4
Section 4.2 Billing......................................................... 4
Section 4.3 Payment......................................................... 4
Section 4.4 Recordkeeping; Access to Books and Records...................... 4
Section 4.5 Interest Rate for Late Payments................................. 4
Section 4.6 Price and Schedule Adjustments for Non-Specification Products... 4
ARTICLE 5. QUANTITY AND QUALITY DETERMINATION.......................................... 5
Section 5.1 Quantity Determinations; Metering Facilities.................... 5
Section 5.2 Quality Determinations.......................................... 5
Section 5.3 Disclaimer of Warranties........................................ 5
Section 5.4 Warranty of Title............................................... 5
ARTICLE 6. DEFAULTS, REMEDIES AND TERMINATION.......................................... 6
Section 6.1 Xxxxx R&M's Right to Terminate.................................. 6
Section 6.2 Xxxxx Company's Right to Terminate.............................. 6
Section 6.3 Right to Terminate and Other Remedies of the Xxxxx Company...... 6
Section 6.4 Termination Option.............................................. 7
Section 6.5 Non-Exclusive Remedies; Specific Performance.................... 7
ARTICLE 7. TERM....................................................................... 7
ARTICLE 8. REPRESENTATIONS AND WARRANTIES.............................................. 7
Section 8.1 Representations and Warranties of the Xxxxx Company............. 7
Section 8.2 Representations and Warranties of Xxxxx R&M..................... 8
ARTICLE 9. MISCELLANEOUS............................................................... 9
Section 9.1 Taxes........................................................... 9
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Section 9.2 Intellectual Property; Confidentiality................... 9
Section 9.3 Maintenance Shutdowns.................................... 9
Section 9.4 Force Majeure............................................ 9
Section 9.5 Cooperation with Other Parties........................... 10
Section 9.6 Indemnity................................................ 10
Section 9.7 Dispute Resolution....................................... 11
Section 9.8 Relationship of Parties.................................. 11
Section 9.9 Third Party Beneficiaries................................ 11
Section 9.10 No Indirect Damages...................................... 12
Section 9.11 Assignments.............................................. 12
Section 9.12 Amendments............................................... 12
Section 9.13 Notices.................................................. 12
Section 9.14 GOVERNING LAW............................................ 13
Section 9.15 Submission to Jurisdiction; Forum Selection.............. 13
Section 9.16 Appointment of Agent for Service of Process.............. 14
Section 9.17 No Waiver................................................ 14
Section 9.18 Counterparts............................................. 14
Section 9.19 Integration.............................................. 14
Section 9.20 Severability............................................. 14
Section 9.21 Headings................................................. 15
Section 9.22 WAIVER OF JURY TRIAL..................................... 15
APPENDIX A -- DEFINITION
EXHIBITS A-1 to A-42 -- PRODUCTS
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PRODUCT PURCHASE AGREEMENT, dated as of August 19, 1999, between Xxxxx
Refining & Marketing, Inc., a Delaware corporation ("Xxxxx R&M") and Port Xxxxxx
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Xxxxx Company L.P., a Delaware limited partnership (the "Xxxxx Company").
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RECITALS
WHEREAS, the Xxxxx Company is constructing the Xxxxx Complex on land
within the Refinery leased from Xxxxx R&M, which Xxxxx Complex is intended to
have at least the Xxxxx Complex Design Capacity;
WHEREAS, the Xxxxx Company has leased the Ancillary Equipment located
within the Refinery, which Ancillary Equipment is being upgraded to have the
Crude Design Capacity to permit the production of at least the minimum volume of
feedstocks for the Xxxxx Complex to operate at the Xxxxx Complex Design
Capacity;
WHEREAS, the Heavy Oil Processing Facility, consisting of the Xxxxx
Complex and the Ancillary Equipment, is expected to produce certain Target
Specifications of products;
WHEREAS, the Xxxxx Company desires to sell, and Xxxxx R&M desires to
purchase, all Xxxxx Company products produced by the Heavy Oil Processing
Facility; and
WHEREAS, the obligations of Xxxxx R&M and the rights of the Xxxxx
Company hereunder will be assigned to the Financing Parties as security in order
to finance the construction of the Xxxxx Complex.
NOW THEREFORE, for and in consideration of the mutual covenants,
premises and agreements set forth herein, and good and valuable consideration,
the receipt, sufficiency and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1. DEFINITIONS
Section 1.1 Definitions. Except as contained in this Section 1.1
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or as otherwise defined herein, the capitalized terms used herein shall have the
respective meanings assigned thereto in Appendix A. For all purposes of this
Agreement, the following terms shall have the following meanings:
"Delivery Point" means for each Product the specification under the
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heading "Delivery Point" on the Schedule relating to such Product.
"Product Price" means for each Product the U.S. dollar amount obtained
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pursuant to the formula under the heading "Price" on the Schedule relating to
such Product; provided, however, that to the extent that any Product is
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purchased by Xxxxx R&M and immediately resold to a non-affiliated third party,
the "Product Price" for such Product shall be (a) the U.S. dollar amount
received by Xxxxx R&M for such Product, less (ii) the applicable marketing fee
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for such Product described on the Schedule relating thereto.
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"Target Specification" means for each Product, the specification of
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such Product described under the heading "Target Specification" on the Schedule
relating to such Product.
Section 1.2 Other Definitional Provisions.
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(a) The words "hereof," "herein", "hereto" and "hereunder" and words
of similar import when used in this Product Purchase Agreement shall refer to
this Product Purchase Agreement as a whole and not to any particular provision
of this Product Purchase Agreement, and Article, Section and Schedule references
are to this Product Purchase Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE 2. PURCHASE AND SALE
Section 2.1 Purchase and Sale Obligations. During the term of this
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Product Purchase Agreement the Xxxxx Company shall sell and deliver to Xxxxx R&M
and Xxxxx R&M shall purchase and accept from the Xxxxx Company all Xxxxx Company
intermediate and final Products of the Heavy Oil Processing Facility, in
accordance with the terms and conditions herein.
Section 2.2 Required Product Mix.
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(a) Unless Xxxxx R&M shall have exercised its option to request a
different mix of products pursuant to clause (b) below, the Xxxxx Company agrees
to use commercially reasonable efforts to cause the quantity and quality of each
Product delivered to Xxxxx R&M hereunder to meet the Target Specification for
such Product. Notwithstanding the foregoing, the Xxxxx Company shall have no
liability hereunder for failure to deliver the Target Specification of any
Product.
(b) Xxxxx R&M shall have the right to request the Xxxxx Company, and
the Xxxxx Company agrees to use commercially reasonably efforts, to alter the
quality or quantity specification of any Product or Products; provided that such
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adjustment shall be subject to the following conditions:
(i) for any calendar month, such request, or combination of
requests, shall not require processing by the Ancillary Equipment of
less than the Contract Quantity of Xxxxx Company Maya and shall not
require processing by the Xxxxx Complex of less than all VTBs produced
by the Ancillary Equipment from the processing of the Contract
Quantity of the Xxxxx Company Maya;
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(ii) such adjustments will, in the reasonable good faith
judgment of Xxxxx R&M, maximize the profitability of the Refinery as a
whole in a manner (A) that is mutually beneficial to Xxxxx R&M and the
Xxxxx Company and (B) that does not maximize the profit of Xxxxx R&M
at the expense of the Xxxxx Company;
(iii) Xxxxx R&M shall supply to the Xxxxx Company, pursuant to
the Services and Supply Agreement, the necessary feedstocks and shall
make (or direct the employees of the Xxxxx Company to make, as the
case may be) the necessary operational and other adjustments under the
Services and Supply Agreement in order to fulfill such request;
(iv) such adjustments will not (A) materially increase the net
reimbursable costs of the Xxxxx Company that are payable under the
Services and Supply Agreement, (B) adversely affect the reliability or
the useful life of either the Xxxxx Complex or the Ancillary
Equipment, or (C) otherwise have a material adverse effect on the
physical condition of the Heavy Oil Processing Facility; and
(v) it is otherwise feasible for the Heavy Oil Processing
Facility to produce the quantity and quality of Products so requested.
Section 2.3 Xxxxx R&M's Obligations Absolute. This is a "take and
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pay contract." The obligation of Xxxxx R&M is to accept and actually take
delivery of Products tendered for delivery by the Xxxxx Company and to pay for
such Products at the prices and on the other terms set forth herein, absolutely
and unconditionally without regard to (i) the validity, regularity or
enforceability of this Product Purchase Agreement or any other Project Document,
(ii) any defense, set-off or counterclaim (other than (a) a defense of payment
or performance and (b) the netting of sums payable under the Services and Supply
Agreement with sums payable hereunder as provided in Article 7 of the Services
and Supply Agreement) which may at any time be available to or be asserted by
Xxxxx R&M against the Xxxxx Company (whether in connection with this Product
Purchase Agreement or any other transaction between Xxxxx R&M and the Xxxxx
Company), or (iii) any other circumstance whatsoever which constitutes, or might
be construed to constitute, an equitable or legal discharge of Xxxxx R&M from
its obligations under this Product Purchase Agreement, in bankruptcy or in any
other instance. Xxxxx R&M hereby waives, to the extent permitted by Applicable
Law, any and all rights that it may now have or which at any time hereafter may
be conferred on it, by statute or otherwise, to terminate, cancel or rescind
this Product Purchase Agreement.
ARTICLE 3. DELIVERY; TITLE
The Xxxxx Company shall deliver all Products to be sold hereunder, and
title to all such Products shall pass, to Xxxxx R&M at the applicable Delivery
Point. At the Delivery Point for any Product, Xxxxx R&M shall take delivery of
such Product and the Xxxxx Company's responsibility with respect to such Product
shall cease and Xxxxx R&M shall assume all
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responsibility for, all risk of loss of, or damage to, and deterioration or
evaporation of, such Product so delivered.
ARTICLE 4. PRICE, BILLING AND PAYMENT
Section 4.1 Price. Xxxxx R&M shall pay the Product Price, from
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time to time, for each Product delivered in accordance with this Product
Purchase Agreement.
Section 4.2 Billing. Every three (3) calendar days, the Xxxxx
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Company shall furnish an invoice to Xxxxx R&M setting forth: (i) a calculation
of the Product Price for each Product delivered during the preceding three (3)
day period, (ii) the total amount payable by Xxxxx R&M to the Xxxxx Company for
all such Products for such three (3) day period, and (iii) a calculation of any
necessary adjustments to previous invoices pursuant to clause (d) of Section
5.11 of the Services and Supply Agreement or Section 4.6 hereof.
Section 4.3 Payment. Xxxxx R&M shall pay each invoice within five
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(5) calendar days of receipt thereof. All invoices will be expressed and paid
without set-off, counterclaim, withholding or deduction, in immediately
available funds to the account listed on Schedule 4.3 hereto.
Section 4.4 Recordkeeping; Access to Books and Records.
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(a) The Xxxxx Company shall, in accordance with good business
practices, keep and maintain such books, records, accounts and other documents
which are sufficient to reflect accurately and completely all amounts which form
the basis for invoices submitted hereunder including, without limitation,
records maintained pursuant to clause (c) of Section 5.11 of the Services and
Supply Agreement.
(b) Xxxxx R&M shall have the right to inspect and examine, during
regular business hours and on not less than five (5)calendar days notice to the
Xxxxx Company all records maintained pursuant to clause (a) above.
Section 4.5 Interest Rate for Late Payments. All amounts payable
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hereunder if not paid when due will accrue interest daily at the annual rate of
interest announced from time to time for dollars by The Chase Manhattan Bank,
N.A. at its offices located in New York, New York as its prime commercial
interest rate for U.S. Dollar-denominated loans originated in the United States
plus two percent (2%) calculated from the due date of such payment until the
date of payment.
Section 4.6 Price and Schedule Adjustments for Non-Specification
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Products. If a material amount of any Product produced by the Heavy Oil
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Processing Facility fails to meet the specifications on the Schedule related to
such Product and such failure to meet specifications has a material adverse
affect on the fair market value of such Product (or any finished product derived
from such Product), then upon written request of either party the parties shall
meet to
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negotiate a good faith and equitable adjustment to the next invoice to be
delivered to Xxxxx R&M under Section 4.2; provided, however, that (i) the
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failure of such Product to meet its specifications was not caused by a failure
of Xxxxx R&M to operate the Heavy Oil Processing Facility in accordance with its
obligations under Article 2 of the Services and Supply Agreement, (ii) such
lower Product specification was not requested by Xxxxx R&M pursuant to Section
2.2 hereof and (iii) no such adjustment shall become effective until the
Independent Engineer issues a certificate approving the reasonableness of such
adjustment. If such failure of any Product to meet the specifications on the
Schedule related to such Product is due to a design or construction defect of
the Xxxxx Complex such that the failure to meet specifications is expected to
continue on an on-going basis, the parties shall meet to negotiate a good faith
adjustment or adjustments to the applicable Schedule or Schedules; provided,
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however, that no such adjustment or adjustments shall become effective until the
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Independent Engineer issues a certificate approving the reasonableness of such
adjustment.
ARTICLE 5. QUANTITY AND QUALITY DETERMINATION
Section 5.1 Quantity Determinations; Metering Facilities. The
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quantity of each Product delivered by the Xxxxx Company to Xxxxx R&M shall be
measured in accordance with the methods specified under the heading "Quantity
Measurement" on the Schedule related to such Product and Section 5.11 of the
Services and Supply Agreement.
Section 5.2 Quality Determinations. Necessary determinations of
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the quality of any Product shall be determined in accordance with the sampling
procedure for such Product specified under the heading "Quality Measurement" on
the Schedule related to such Product and Section 5.11 of the Services and Supply
Agreement.
Section 5.3 Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED
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IN SECTION 5.4, BELOW, THE XXXXX COMPANY MAKES NO WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE PRODUCTS TO BE SUPPLIED BY THE XXXXX COMPANY HEREUNDER,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
Section 5.4 Warranty of Title. The Xxxxx Company warrants and
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represents to Xxxxx R&M that the Xxxxx Company has good title to, and the valid
right to transfer to Xxxxx R&M, all Products delivered hereunder, free and clear
of all liens of persons claiming by, through or under the Xxxxx Company.
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ARTICLE 6. DEFAULTS, REMEDIES AND TERMINATION
Section 6.1 Xxxxx R&M's Right to Terminate. A material failure of
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the Xxxxx Company to deliver the Products substantially in accordance with the
terms contained herein, which remains uncured for a period of sixty (60)
consecutive days, shall constitute a Xxxxx Company default hereunder.
If a Xxxxx Company default occurs and is continuing, Xxxxx R&M after
having given the Xxxxx Company and the Financing Parties ninety (90) days prior
written notice may terminate this Product Purchase Agreement upon Xxxxx
Company's and/or the Financing Parties' subsequent failure to cure such default
within such ninety (90) day cure period.
Section 6.2 Xxxxx Company's Right to Terminate. Each of the
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following shall constitute a Xxxxx R&M default hereunder:
(a) Failure by Xxxxx R&M to pay any amount due under this Product
Purchase Agreement in excess of $250,000 on the date when payment of such amount
is required, which continues uncured for a period of five (5) consecutive days;
(b) Failure by Xxxxx R&M to perform substantially any material
obligation under this Product Purchase Agreement, which failure continues
uncured for a period of thirty (30) consecutive days;
(c) Commencement of insolvency, receivership, reorganization or
bankruptcy proceedings by or against Xxxxx R&M, which are not dismissed within
sixty (60) days;
(d) Any material breach of any covenant, representation or warranty
of Xxxxx R&M herein that continues uncured for a period of sixty (60)
consecutive days;
(e) Default by Xxxxx R&M under Section 8.2 of the Services and Supply
Agreement; or
(f) Failure by Xxxxx R&M to perform substantially any material
obligation under the Ancillary Equipment Site Lease or the Xxxxx Complex Ground
Lease, which failure continues uncured for a period of thirty (30) consecutive
days.
Section 6.3 Right to Terminate and Other Remedies of the Xxxxx
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Company.
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(a) Upon the occurrence of a Xxxxx R&M default hereunder and subject
to the consent of the Financing Parties, the Xxxxx Company may (i) terminate
this Product Purchase Agreement and/or (ii) exercise any or all other remedies
available to it at law or in equity.
(b) In the event Xxxxx R&M does not accept delivery of any Product,
for any reason, the Xxxxx Company shall have the right to sell such Product to
any other purchaser.
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Section 6.4 Termination Option. Notwithstanding anything to the
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contrary herein and subject to such consent as may be required under the
Financing Documents, this Product Purchase Agreement shall terminate at the
option of either party hereto should Final Completion (as such term is defined
in the EPC Contract) and completion of the Lessor Ancillary Equipment Upgrade
not occur on or before March 1, 2002 or such later date for completion of
construction of the Heavy Oil Processing Facility as may be contemplated by the
Financing Documents.
Section 6.5 Non-Exclusive Remedies; Specific Performance. (a) None
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of the provisions in this Article 6 are intended to be exclusive of, or to
limit, any rights available to either party at law or in equity.
(b) Each of the parties hereto acknowledges and agrees that (i)
monetary damages may be an inadequate remedy for a breach of any of the
provisions of this Product Purchase Agreement, (ii) in addition to being
entitled to exercise all of their rights granted by law, including recovery of
damages, the other party shall therefore be entitled to specific performance of
the other party's obligations under this Product Purchase Agreement and (iii) in
the event of any action for specific performance it shall waive the defense that
a remedy at law would be adequate.
ARTICLE 7. TERM
This Product Purchase Agreement shall become effective on the date
hereof and shall continue in effect until the earlier of (a) the date on which
this Product Purchase Agreement is terminated pursuant to Article 6, or (b) the
date that is thirty (30) years after the date hereof.
ARTICLE 8. REPRESENTATIONS AND WARRANTIES
Section 8.1 Representations and Warranties of the Xxxxx Company.
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The Xxxxx Company represents and warrants to Xxxxx R&M that:
(a) The Xxxxx Company is a corporation duly formed and validly
existing under the laws of the State of Delaware; the Xxxxx Company has the
power and authority to own its assets and to transact the business in which it
is now engaged or proposed to be engaged in; and the Xxxxx Company is duly
qualified to do business in each jurisdiction in which the character of the
properties owned by it therein or in which the transaction of its business makes
such qualification necessary.
(b) The execution, delivery and performance by the Xxxxx Company of
this Product Purchase Agreement has been duly authorized by all necessary
corporate action and does not and will not: (1) require any further consent or
approval of the members of the Xxxxx Company; (2) contravene the Xxxxx Company's
partnership agreement or certificate of limited partnership; (3) violate any
provision of any law, rule, regulation, order, writ, judgment, decree,
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determination, or award presently in effect having applicability to the Xxxxx
Company; (4) result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease or instrument to which
the Xxxxx Company is a party or by which it or its properties may be bound or
affected; (5) result in, or require, the creation or imposition of any lien,
upon or with respect to any of the properties now owned or hereafter acquired by
the Xxxxx Company; or (6) cause the Xxxxx Company to be in default under any
such law, rule, regulation, order, writ, judgment, injunction, decree,
determination, or award or any such indenture, agreement, lease or instrument.
(c) This Product Purchase Agreement is in full force and effect and
is the legal, valid, and binding obligation of the Xxxxx Company, enforceable
against the Xxxxx Company in accordance with its terms, except to the extent
that such enforcement may be limited by applicable bankruptcy, moratorium,
insolvency or other similar laws affecting creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
Section 8.2 Representations and Warranties of Xxxxx R&M. Xxxxx R&M
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represents and warrants to the Xxxxx Company that:
(a) Xxxxx R&M is a corporation duly formed and validly existing under
the laws of Delaware; Xxxxx R&M has the corporate power and authority to own its
assets and to transact the business in which it is now engaged or proposed to be
engaged in; and Xxxxx R&M is duly qualified to do business in each jurisdiction
in which the character of the properties owned by it therein or in which the
transaction of its business makes such qualification necessary.
(b) The execution, delivery and performance by Xxxxx R&M of this
Product Purchase Agreement has been duly authorized by all necessary corporate
action and does not and will not: (1) require any further consent or approval of
the members of Xxxxx R&M; (2) contravene Xxxxx R&M's certificate of
incorporation or by laws; (3) violate any provision of any law, rule,
regulation, order, writ, judgment, decree, determination, or award presently in
effect having applicability to Xxxxx R&M; (4) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which Xxxxx R&M is a party or by which
it or its properties may be bound or affected; (5) result in, or require, the
creation or imposition of any lien, upon or with respect to any off the
properties now owned or hereafter acquired by Xxxxx R&M; or (6) cause Xxxxx R&M
to be in default under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award or any such indenture, agreement,
lease or instrument.
(c) This Product Purchase Agreement is in full force and effect and
is the legal, valid, and binding obligation of Xxxxx R&M, enforceable against
Xxxxx R&M in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, moratorium, insolvency, or
other similar laws affecting creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
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ARTICLE 9. MISCELLANEOUS
Section 9.1 Taxes.
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(a) Each party shall be solely responsible for payment of (i) any
federal, state or local taxes based on upon or measured by such party's income
and (ii) personal property taxes levied on or measured by the value of the
Products to the extent such taxes are applicable or allocable to periods in
which such party had title to the Products so taxed.
(b) Any sales, use, transfer or similar taxes, now or hereafter
imposed, levied or assessed by any governmental authority directly upon the
transactions herein provided for shall, if collectible or payable by the Xxxxx
Company, be paid or reimbursed by Xxxxx R&M. If Xxxxx R&M claims exemption for
any of the aforesaid taxes, then it shall furnish the Xxxxx Company with a
properly completed exemption certificate. On items that are to be resold, Xxxxx
R&M shall furnish the Xxxxx Company with a properly executed resale certificate.
If, at any time, Xxxxx R&M holds a Texas direct payment permit, it shall issue
to the Xxxxx Company a properly completed direct payment exemption certificate
and thereafter hold harmless and indemnify the Xxxxx Company for any sales or
use taxes assessed against the Xxxxx Company by any taxing authority in respect
to any taxable sales, including the amounts of any penalties, interest and
reasonable attorneys' fees.
Section 9.2 Intellectual Property; Confidentiality. Xxxxx R&M
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agrees to be bound by all confidentiality agreements and all agreements with
respect to intellectual property rights contained in the other Project
Documents.
Section 9.3 Maintenance Shutdowns. The parties agree to cooperate
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in scheduling planned maintenance shutdowns of operating units within the Heavy
Oil Processing Facility and within the Xxxxx Equipment in order to minimize the
impact on the operations of the other party. Notwithstanding the foregoing, no
maintenance shutdown of any unit comprising part of the Xxxxx Equipment shall
relieve Xxxxx R&M of its obligation to purchase and take delivery of Products
hereunder.
Section 9.4 Force Majeure.
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(a) If an Event of Force Majeure causes a material adverse effect on
a party's ability to carry out its obligations under this Product Purchase
Agreement, other than the obligation to pay money, such party shall give to the
other party prompt notice of such Event of Force Majeure with reasonably full
particulars thereof, and its obligations so far as they are affected by such
Event of Force Majeure shall be suspended during but not longer than the
continuance of such Event of Force Majeure and such further period thereafter as
shall be reasonable in the circumstances.
(b) As soon as practicable after giving notice under clause (a)
above, the claiming party shall provide to the other party confirmation of the
particulars required to be given under clause (a) above.
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(c) Nothing in this Section 9.4 shall suspend, excuse or delay any
party's obligation to pay under this Product Purchase Agreement.
(d) The non-performing party shall use reasonable diligence to remedy
its inability to perform or to minimize the impact of the Event of Force Majeure
as quickly as possible.
Section 9.5 Cooperation with Other Parties. Purchaser shall
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reasonably cooperate with the Xxxxx Company, the Independent Engineer and the
Financing Parties in connection with the Financing Documents and/or any
refinancing thereof including, without limitation, the furnishing of such
information, the giving of such certificates and the furnishing of a reasonable
consent and such reasonable opinions of counsel and other matters as the Xxxxx
Company, the Independent Engineer or the Financing Parties may reasonably
request in connection with the transactions contemplated hereby or by the
Financing Documents.
Section 9.6 Indemnity.
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(a) The Xxxxx Company shall protect, indemnify, defend and hold
harmless Xxxxx R&M, and Xxxxx R&M shall protect, indemnify, defend and hold
harmless the Xxxxx Company and the Financing Parties, together with in each case
the respective indemnitee's directors, officers, employees and agents (including
but not limited to affiliates and their employees) from and against all
liabilities, damages, losses, penalties, claims, judgments, awards, costs,
expenses (including reasonable legal fees and any fines or assessments charged
against it), demands, suits and proceedings of any nature whatsoever for death,
injury or property damage that arise out of or are in any manner connected with
the negligence or willful misconduct of that party in its performance of this
Product Purchase Agreement.
(b) Each party's obligations with respect to claims and suits covered
by this Section are subject to the conditions that (i) the indemnitee gives the
indemnitor reasonably prompt notice of any such claim or suit, (ii) the
indemnitee cooperates in the defense of any such claim or suit and (iii) the
indemnitor has sole control of the defense and settlement to the extent of the
indemnitor's liability for any such claim or suit, provided that indemnitor
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shall confirm in writing its obligation to indemnify the indemnitee with respect
to all costs and expenses with respect to such claim or suit. Nothing contained
in this clause, however, shall preclude the indemnitee from (x) being
represented by its own counsel at its own expense or (y) participating in the
settlement if the claimed relief is non-monetary in nature.
(c) The Xxxxx Company hereby agrees that, notwithstanding any
provision in this Product Purchase Agreement to the contrary, with respect to
any loss that is or would be covered by the policies of insurance specified in
Section 5.13 of the Services and Supply Agreement, Xxxxx R&M shall first seek to
recover insurance proceeds under such policies, through submission of a claim
and exercise of good faith efforts over the ensuing sixty (60) day period toward
recovery of damages under this Product Purchase Agreement.
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Section 9.7 Dispute Resolution.
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(a) In the event of any dispute arising out of or in connection with
this Product Purchase Agreement, Xxxxx R&M or the Xxxxx Company may notify the
other party of the nature of the dispute and the parties shall, in good faith
and using all reasonable efforts, seek to settle the dispute amicably through
negotiation between senior executives. Within twenty (20) days after delivery of
such notice, such senior executives shall meet at a mutually acceptable time and
place, and thereafter as often as reasonably deemed necessary, to exchange
relevant information and to attempt to resolve the dispute. All discussions
pursuant to this clause (a) shall be confidential and shall be treated as
compromise and settlement negotiations for all purposes including the admission
of evidence in any subsequent arbitration. If the matter has not been resolved
within sixty (60) days of the delivery of notice of the dispute, or if the
parties fail to meet within the twenty-day period referred to above, either
party may initiate arbitration of the dispute pursuant to the terms of clause
(b) of this Section.
(b) All claims and disputes arising out of or in connection with this
Product Purchase Agreement shall be settled finally by arbitration under rules
applicable to arbitrations of the American Arbitration Association (the "AAA
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Rules") in effect at such time. The arbitration shall take place in New York
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City. Subject to the provisions of paragraph (c) below, the arbitral tribunal
shall consist of three arbitrators, one designated by each of the parties and
the third, who shall be the chairman of the tribunal, selected by agreement of
the two designated arbitrators. In the event the two arbitrators fail to agree
on the selection of the chairman, the chairman shall be selected in accordance
with AAA Rules. The substantive law applicable to the subject matter of the
arbitration shall be the law indicated in Section 12.8. Copies of the request
for arbitration and the answer thereto shall be served by a party on the other
party in accordance with Section 9.13. Subject to paragraph (c) below, the
award of the arbitral tribunal shall be rendered within one hundred eighty (180)
days from signature or approval of the terms of reference, subject to extension
for good cause only. The award shall be final and binding on the parties, and
may be confirmed or embodied in any order or judgment of any court of competent
jurisdiction.
(c) In the case of any claim for damages in a principal amount of two
hundred fifty thousand U.S. dollars (U.S.$250,000) or less, (i) the claim shall
be resolved by a sole arbitrator selected in accordance with AAA Rules, (ii) the
terms of reference shall be signed and any hearing of the matter shall be held
within one hundred twenty (120) days following the later of service of the
answer and transmission of the file to the arbitrator, and (iii) the arbitrator
shall render the award within thirty (30) days after the hearing or, in the
event a hearing is not held, signature or approval of the terms of reference,
subject extension for good cause only.
Section 9.8 Relationship of Parties. Nothing in this Product
-----------------------
Purchase Agreement shall be deemed to constitute either party hereto a partner,
joint venturer, agent or legal representative of the other party or to create
any fiduciary relationship between or among the parties.
Section 9.9 Third Party Beneficiaries. (a) The Financing Parties
-------------------------
are intended third party beneficiaries of this Product Purchase Agreement and
the representations, warranties,
12
covenants and agreements of the parties hereto are made for the benefit of, and
may be relied upon by, the Financing Parties.
(b) The rights and obligations created under this Product Purchase
Agreement shall apply exclusively to the parties hereto and their successors and
permitted assigns, and no right shall be created in any third party by reason of
this Product Purchase Agreement or separate act or action taken independently by
either party.
Section 9.10 No Indirect Damages. Notwithstanding anything to the
-------------------
contrary herein, in no event shall either party be liable for consequential,
incidental, indirect, special or punitive damages hereunder including, without
limitation, any damages measured by the principal amount of the Xxxxx Company's
obligations under the Financing Documents.
Section 9.11 Assignments. (a) Xxxxx R&M shall not assign its rights
-----------
hereunder without the prior written consent of the Xxxxx Company and the
Financing Parties. The Xxxxx Company may assign its rights hereunder to the
Financing Parties, as collateral security for its obligations under the
Financing Documents, but otherwise shall not assign its rights hereunder without
the prior written consent of Xxxxx R&M and the Financing Parties. Xxxxx R&M
hereby expressly authorizes the Financing Parties, or the Collateral Trustee
acting on behalf of the Financing Parties, as a secured party, to exercise all
rights of the Xxxxx Company under this Product Purchase Agreement and to
subsequently assign such rights in connection therewith.
(b) This Product Purchase Agreement shall be binding upon and shall
inure to the benefit of, the successors and permitted assigns of Xxxxx R&M and
the Xxxxx Company.
(c) This Product Purchase Agreement shall inure to the benefit of the
Collateral Trustee, the Financing Parties and any subsequent transferee or
assignee thereof.
Section 9.12 Amendments. No amendment, modification or alteration
----------
of the terms hereof shall be binding unless the same is in writing and duly
executed by each of the parties hereto.
Section 9.13 Notices. Any notice, request, consent, waiver or other
-------
communication required or permitted hereunder shall be effective only if it is
in writing and personally delivered by hand or by overnight courier or sent by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
If to Xxxxx R&M:
Xxxxx Refining & Marketing, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
13
If to the Xxxxx Company:
Port Xxxxxx Xxxxx Company L.P.
Port Xxxxxx Refinery
0000 X. Xxxxxxx Xxxxx
Office Number 36
Port Xxxxxx, Texas 77640
Attention: X.X. Xxxx
(or if sent by U.S. Mail:
Port Xxxxxx Xxxxx Company L.P.
X.X. Xxx 000
Xxxx Xxxxxx, Xxxxx 00000-0000
Attention: X.X. Xxxx)
Any such notice, request, consent, waiver or other communication
required or permitted hereunder, whether to Xxxxx R&M or the Xxxxx Company,
shall also be personally delivered by hand or by overnight courier or sent by
certified or registered mail, postage prepaid, return receipt requested, to the
Collateral Trustee on behalf of the Financing Parties, addressed as follows:
Bankers Trust Company
Corporate Trust & Agency Services
Xxxx Xxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx XxXxxxxxx
Section 9.14 GOVERNING LAW. THE PLACE OF EXECUTION, DELIVERY OR
-------------
PERFORMANCE OF THIS AGREEMENT OR OF THE DOMICILE OF THE PARTIES HERETO
NOTWITHSTANDING, THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 9.15 Submission to Jurisdiction; Forum Selection.
-------------------------------------------
(a) Each of the parties hereto submits to the non-exclusive
jurisdiction of the courts of the State of New York, the State of Texas and the
courts of the United States of America located in the State of New York and the
State of Texas over (i) any suit, action or proceeding with respect to this
Product Purchase Agreement or the transactions contemplated hereby if not
settled by arbitration pursuant to Section 9.7 above and (ii) the enforcement of
any arbitral award issued pursuant to Section 9.7 above.
14
(b) Except for an arbitration award under Section 9.7 hereof, any
suit, action or proceeding with respect to this Product Purchase Agreement or
the transactions contemplated hereby, or the enforcement of any arbitral award
in connection therewith, may be brought only in the courts of the State of New
York or the courts of the United States of America located in the State of New
York, in each case located in the Borough of Manhattan, City of New York, State
of New York. Each of the parties hereto waives any objection that it may have to
the venue of such suit, action or proceeding in any such court or that such
suit, action or proceeding in such court was brought in an inconvenient court
and agrees not to plead or claim the same.
Section 9.16 Appointment of Agent for Service of Process. Each
-------------------------------------------
party hereto irrevocably appoint CT Corporation, at 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, as its authorized agent in the State of New York upon which process
may be served in any suit, action or proceeding with respect to this Product
Purchase Agreement or the transactions contemplated hereby, and agrees that
service of process upon such agent, and written notice of said service to such
party by the person serving the same to the address provided in Section 9.13,
shall be deemed in every respect effective service of process upon such party in
any such suit or proceeding. Each party hereto further agrees to take any and
all action as may be necessary to maintain such designation and appointment of
such agent in full force and effect so long as this Product Purchase Agreement
is in effect pursuant to Article 7.
Section 9.17 No Waiver. The waiver of either party of a default or
---------
breach of any provision of this Product Purchase Agreement by the other party
shall not operate or be construed to operate as a waiver of any subsequent
defaults or breaches of the same or different kind. The failure of a party to
exercise any rights hereunder in a particular instance shall not operate as a
waiver of such party's right to exercise the same or different rights in
subsequent instances. The making or acceptance of a payment by either party
with knowledge of the existence a default or breach shall not operate or be
construed to operate as a waiver of any default or breach.
Section 9.18 Counterparts. This Product Purchase Agreement may be
------------
executed by one or more of the parties to this Product Purchase Agreement on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an
executed signature page of this Product Purchase Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
Section 9.19 Integration. This Product Purchase Agreement and the
-----------
other Project Documents represent the agreement of the Xxxxx Company and Xxxxx
R&M with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Xxxxx Company or Xxxxx R&M
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Project Documents.
Section 9.20 Severability. Any provision of this Product Purchase
------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the
15
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 9.21 Headings. Captions and headings in this Product
--------
Purchase Agreement are for reference only and do not constitute a part of the
substance of this Product Purchase Agreement.
Section 9.22 WAIVER OF JURY TRIAL. THE XXXXX COMPANY AND XXXXX R&M
--------------------
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER PROJECT DOCUMENT AND FOR
ANY COUNTERCLAIM THEREIN.
16
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have caused this Product Purchase Agreement to be signed by their respective
officers thereunto duly authorized as of the day and year first set forth above.
XXXXX REFINING & MARKETING, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Exec. Vice Pres. and CFO
PORT XXXXXX XXXXX COMPANY L.P.
By: SABINE RIVER HOLDING CORP.,
General Partner
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: Exec. Vice Pres. and CFO
APPENDIX A -- DEFINITIONS TO THE:
Services and Supply Agreement
Product Purchase Agreement
Xxxxx Complex Ground Lease
Ancillary Equipment Site Lease
Transfer and Assignment Agreement
General Provisions
------------------
The following terms shall have the following meanings for all purposes
of the Services and Supply Agreement, the Product Purchase Agreement, Xxxxx
Complex Ground Lease, the Ancillary Equipment Site Lease and the Transfer and
Assignment Agreement, each referred to below, unless otherwise defined in such
agreements or the context thereof shall otherwise require, and such meanings
shall be equally applicable to both the singular and the plural forms of the
terms herein defined. In the case of any conflict between the provisions of
this Appendix A and the provisions of the main body of any of the above
agreements, the provisions of the main body of such agreement shall control the
construction of such agreement.
Unless the context otherwise requires, references to (i) agreements
shall include sections, schedules, exhibits and appendices thereto and shall be
deemed to mean and include such agreement (and sections, schedules, exhibits and
appendices) as the same may be amended, supplemented and otherwise modified from
time to time, (ii) parties to agreements or government agencies shall be deemed
to include the permitted successors and assigns of such parties and the
successors and assigns of such agencies and (iii) laws or regulations shall be
deemed to mean such laws or regulations as the same may be amended from time to
time and any superseding laws or regulations covering the same subject matter.
"Actual Xxxxx Capacity" means with respect to the Xxxxx, its capacity,
---------------------
from time to time, to process feedstreams.
"Actual Crude Capacity" means with respect to the Ancillary Equipment,
---------------------
its capacity, from time to time, to process crude oil.
"Actual Hydrocracker Capacity" means with respect to the Hydrocracker,
----------------------------
its capacity, from time to time, to process gas oil.
"Adjacent Refinery Property" means the land described on Exhibit B to
--------------------------
the Xxxxx Complex Ground Lease and also on Exhibit C to the Ancillary Equipment
Site Lease.
"Amine Treating Unit" means the amine treating unit to be constructed
-------------------
at the Refinery and designated ATU 7841.
"Ancillary Equipment" means, collectively, the Crude Unit and the
-------------------
other processing units described on Exhibit B to the Ancillary Equipment Site
Lease.
"Ancillary Equipment Easement" has the meaning given such term in
----------------------------
Section 2.2 of the Ancillary Equipment Site Lease.
18
"Ancillary Equipment Operating Fee" has the meaning given such term in
---------------------------------
Section 13.2(b) of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site" has the meaning given such term in Section
------------------------
2.1 of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site Initial Term" means the period commencing on
-------------------------------------
the August 19, 1999 and ending on August 19, 2029.
"Ancillary Equipment Site Lease" means the Ancillary Equipment Site
------------------------------
Lease and Easement Agreement, dated as of August 19, 1999, between Xxxxx R&M and
the Xxxxx Company.
"Ancillary Equipment Site Leasehold" has the meaning given such term
----------------------------------
in Section 2.1 of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site Lease Term" has the meaning given such term
-----------------------------------
in Article XX of the Ancillary Equipment Site Lease.
"Ancillary Equipment Site Renewal Term" means each period following
-------------------------------------
the end of the Ancillary Equipment Initial Term with respect to which Lessee has
the option to renew the Ancillary Equipment Site Lease pursuant to Article XX of
the Ancillary Equipment Site Lease.
"Ancillary Equipment Upgrade Contract" means the Reimbursable Contract
------------------------------------
for Engineering, Procurement and Construction, dated as of March 24, 1998,
between Xxxxx R&M and the Contractor, as amended by Amendment No. One, dated as
of August 19, 1999, as further amended, supplemented or otherwise modified from
time to time.
"Annual Budget and Operating Plan" means, for any Operating Year, the
--------------------------------
budget and operating plan in effect pursuant to Section 6 of the Services and
Supply Agreement.
"Applicable Law" means, collectively, (i) all Permits and (ii) all
--------------
laws, treaties, ordinances, judgments, decrees, injunctions, writs, orders and
stipulations of any court, arbitrator or governmental agency or authority and
statutes, rules, regulations, orders and interpretations thereof of any federal,
state, county, municipal, regional, environmental or other governmental body,
instrumentality, agency, authority, court or other body applicable from time to
time to the Refinery, the operation or maintenance of the Refinery, or the
performance of any obligations under the Xxxxx R&M Agreements, any other Project
Document or any other agreement entered into in connection therewith.
"Appraisal Procedure" with respect to any renewal option of any lease,
-------------------
means a procedure whereby two independent Qualified Appraisers, one appointed by
the lessor and one by the lessee, shall agree upon the value, period, amount or
determination then the subject of an appraisal, as follows: If either the
lessor or the lessee shall determine that a value, period or amount of
determination to be determined under such lease or any related document cannot
19
timely be established by agreement, such party shall appoint its Qualified
Appraiser and give notice thereof to the other party, which shall appoint its
Qualified Appraiser within 10 days thereafter. If such other party does not
appoint its Qualified Appraiser within such ten day period, the determination of
the first Qualified Appraiser made within 20 days thereafter shall be conclusive
and binding on the lessor and the lessee. If within 20 days after appointment
of the second of the two Qualified Appraisers, such Qualified Appraisers are
unable to agree upon the value, period, amount or determination in question,
they jointly shall appoint a third Qualified Appraiser within 10 days
thereafter, or, if they do not do so, either the lessor or the lessee may
request the American Arbitration Association office in Houston, Texas (or if no
such office exists at such time, the American Arbitration Association office in
New York, New York), or any organization successor thereto, to appoint the third
Qualified Appraiser from a panel of arbitrators knowledgeable on the subject of
refinery land and asset valuations in the Texas Gulf Coast area. The decision
of the third Qualified Appraiser shall be given within 20 days after his
appointment. If three Qualified Appraisers shall be so appointed, the average
of all three determinations shall be conclusive and binding on the lessor and
the lessee unless the determination of one Qualified Appraiser is disparate from
the middle determination by more than twice the amount by which the third
determination is disparate from the middle determination, in which case the
determination of the most disparate Qualified Appraiser shall be excluded and
the average of the remaining two determinations shall be conclusive and binding
on the lessor and the lessee. The obligation to pay the fees and expenses of
Qualified Appraisers incurred in connection with any Appraisal Procedure shall
be divided equally between the lessor and the lessee.
"Auxiliary Facilities" has the meaning given such term in Article VI
--------------------
of the Xxxxx Complex Ground Lease.
"Auxiliary Rights" has the meaning given such term in Article VI of
----------------
the Xxxxx Complex Ground Lease.
"Available Xxxxx Company Maya" means, for any day, the sum of (a) the
----------------------------
Contract Quantity for such day, plus (b) the extent, if any, that the Available
----
Xxxxx Company Maya for the preceding day exceeds the Actual Crude Capacity for
such preceding day.
"Available Xxxxx Company VTBs" means, for any day, the sum of (a) the
----------------------------
Xxxxx Company VTBs produced by the Crude Unit on such day, plus (b) the extent,
----
if any that Available Xxxxx Company VTBs for the preceding day exceeds Actual
Xxxxx Capacity for such preceding day.
"Base Case Financial Model" shall mean the financial model described
-------------------------
on Exhibit A to the Services and Supply Agreement.
"BPD" has the meaning given such term in the Long-Term Oil Supply
---
Agreement.
"Business Day" means any day other than Saturday, Sunday or a legal
------------
holiday in the United States of America.
20
"Xxxxx Equipment" means all Xxxxx Refinery Property other than the
---------------
Ancillary Equipment.
"Xxxxx Hydrogen Supply Contract" means the Product Supply Agreement,
------------------------------
dated as of August 1, 1999, between Xxxxx R&M and Air Products, Inc.
"Xxxxx Xxxx" means Maya Crude Oil purchased by Xxxxx R&M.
----------
"Xxxxx Processing Fee" means, for any monthly period, the total fees
--------------------
due the Xxxxx Company from Xxxxx R&M for processing services provided pursuant
to Sections 3.5, 4.2 and 4.3.
"Xxxxx R&M" means Xxxxx Refining & Marketing, Inc., a Delaware
---------
corporation.
"Xxxxx R&M Agreements" means, collectively, (i) the Services and
--------------------
Supply Agreement, (ii) the Product Purchase Agreement, (ii) the Xxxxx Complex
Ground Lease and (iv) the Ancillary Equipment Site Lease.
"Xxxxx Refinery Property" means all real and personal property owned
-----------------------
by Xxxxx R&M and located at the Refinery.
"Xxxxx" means the delayed xxxxx to be constructed at the Refinery and
-----
designated DCU 843.
"Xxxxx Company" means Port Xxxxxx Xxxxx Company L.P., a Delaware
-------------
limited partnership.
"Xxxxx Company Crude Oil Volume" means, on any day, the volume, stated
------------------------------
in BPD, of Xxxxx Company-owned crude oil processed through the Crude Unit.
"Xxxxx Company Maya" means Maya Crude Oil purchased by the Xxxxx
------------------
Company.
"Xxxxx Complex"means, collectively, the Xxxxx, the Hydrocracker, the
-------------
Sulfur Plant, the Sour Water Stripper, the Amine Treating Unit and the Xxxxx
Complex Offsites.
"Xxxxx Complex Design Capacity" means with respect to the Xxxxx
-----------------------------
Complex, its nameplate capacity, stated in BPD, to process feedstocks.
"Xxxxx Complex Ground Lease" means the Xxxxx Complex Ground Lease and
--------------------------
Blanket Easement Agreement, dated as of August 19, 1999, between Xxxxx R&M and
the Xxxxx Company.
"Xxxxx Complex Ground Lease Term" has the meaning given such term in
-------------------------------
Article XX of the Xxxxx Complex Ground Lease.
21
"Xxxxx Complex Initial Term" means the period commencing on August 19,
--------------------------
1999 and ending on August 19, 2029.
"Xxxxx Complex Leasehold" has the meaning given such term in Section
-----------------------
2.1 of the Xxxxx Complex Ground Lease.
"Xxxxx Complex Offsites" means, collectively, (a) the control room,
----------------------
flare, cooling tower, sulfur loading facilities and power station no. 6 that are
being constructed pursuant to the EPC Contract and (b) the xxxxx feed tank nos.
108 and 109 that are being modified pursuant to the EPC Contract.
"Xxxxx Complex Renewal Term" means each period following the end of
--------------------------
the Initial Term with respect to which Lessee has the option to renew the Xxxxx
Complex Ground Lease pursuant to Article XX of the Xxxxx Complex Ground Lease.
"Xxxxx Complex Site" has the meaning give such term in Section 2.1(a)
------------------
of the Xxxxx Complex Ground Lease.
"Xxxxx Design Capacity" means with respect to the Xxxxx, its nameplate
---------------------
capacity, stated in BPD, to process feedstocks.
"Collateral Trustee" means the collateral trustee granted a security
------------------
interest, on behalf of the Financing Parties, in the Senior Debt pursuant to the
Financing Documents and any successor collateral trustee thereunder.
"Common Security Agreement" means the Common Security Agreement, dated
-------------------------
as of August 19, 1999, among the Xxxxx Company, the Funding Company, Sabine,
Neches, Bankers Trust Company, as Collateral Trustee and Depositary Bank,
Deutsche Bank AG, New York Branch, as Administrative Agent, Winterthur
International Insurance Company Limited, as Oil Payment Insurers Administrative
Agent and HSBC Bank USA, as Capital Markets Trustee,
"Contract Quantity" means (a) for any day when the Long-Term Oil
-----------------
Supply Agreement is in effect and PMI has not reduced the volume of Maya
available to the Xxxxx Company pursuant thereto, the "Contract Quantity" in
effect on such day pursuant to the Long-Term Oil Supply Agreement or such lesser
amount of Maya Crude Oil as may be purchased thereunder pursuant to Section 8.2
of the Long-Term Oil Supply Agreement, and (b) for any other day, the amount of
Maya Crude Oil sufficient to operate the Xxxxx at eighty percent of Actual Xxxxx
Capacity.
"Contractor" means Xxxxxx Xxxxxxx USA Corporation, a Delaware
----------
corporation.
"Crude Design Capacity" means with respect to the Ancillary Equipment,
---------------------
its nameplate capacity, stated in BPD, to process heavy crude oil.
22
"Crude Unit" means the crude unit and vacuum tower located at the
----------
Refinery and collectively designated AVU-146.
"CRU 1344 Hydrotreater" means the naphtha hydrotreater located at the
---------------------
Refinery and designated CRU 1344.
"Easements" has the meaning given such term in Section 2.2 of the
---------
Xxxxx Complex Ground Lease.
"EPC Contract" means the Contract for Engineering, Procurement and
------------
Construction Services, dated as of July 12, 1999, between the Xxxxx Company and
the Contractor, as amended, supplemented or otherwise modified from time to
time.
"Event of Force Majeure" means any event or circumstance if (i) such
----------------------
event or circumstance is beyond the reasonable control of the affected party and
(ii) such event or circumstance is not the direct or indirect result of a
party's negligence or the failure of such party to perform any of its
obligations under the applicable Xxxxx R&M Agreement, including, without
limitation:
1. any interruption or cessation in delivery of Xxxxx Company Maya to
the Refinery, whether or not due to an event of force majeure under the
Long-Term Oil Supply Agreement;
2. acts of God, epidemic, earthquake, landslide, lightning, fire,
explosion, accident, tornado, drought, blight, famine, flood, hurricane, or
other extraordinary weather conditions more severe than those experienced
at any time in the last thirty (30) years for the geographic area of the
Refinery;
3. acts of a public enemy, war (declared or undeclared), blockade,
insurrection, riot or civil disturbance, sabotage, quarantine, or any
exercise of the power of eminent domain, police power, condemnation or
other taking by or on behalf of any public, quasi-public or private entity;
4. laws, rules, regulations, orders, judgments or other acts of any
foreign, federal, state or local court, administrative agency, governmental
body or authority;
5. strikes, boycotts or lockouts, except any such strike, boycott or
lockout that is not national or industry-wide that involves the employees
of Xxxxx R&M; and
6. a partial or entire interruption or other failure of (a) the
supply of electricity, water, wastewater treatment, steam, hydrogen or
other utilities
23
to the Refinery or any part thereof, or (b) pipeline service, ship
or barge service, dock access or usage or other transportation
facilities.
"Excess Xxxxx Capacity" means, for any day, the extent that Actual
---------------------
Xxxxx Capacity for such day exceeds the capacity necessary for the Xxxxx to
process the Available Xxxxx Company VTBs for such day.
"Excess Xxxxx Capacity Option" has the meaning given such term in
----------------------------
Section 4.2(a) of the Services and Supply Agreement.
"Excess Crude Capacity" means, for any day, the extent that Actual
---------------------
Crude Capacity for such day exceeds the capacity necessary for the Ancillary
Equipment to process the Available Xxxxx Company Maya for such day and the light
crude oil necessary to process such Available Xxxxx Company Maya.
"Excess Crude Capacity Option" has the meaning given such term in
----------------------------
Section 3.5(b) of the Services and Supply Agreement.
"Excess Hydrocracker Capacity" means, for any day, the extent that
----------------------------
Actual Hydrocracker Capacity for such day exceeds the capacity necessary for the
Hydrocracker to process Xxxxx Company VGO produced by the Xxxxx on such day.
"Excess Hydrocracker Capacity Option" has the meaning given such term
-----------------------------------
in Section 4.3(a) of the Services and Supply Agreement.
"Fair Market Rental Value" shall mean, with respect to any land and/or
------------------------
equipment to be leased pursuant to a lease, the value, which shall not in any
event be less than zero, that would be obtained in an arm's length transaction
for cash between an informed and willing lessee and an informed and willing
lessor, neither of whom is under any compulsion to lease, for the use of such
land and/or equipment for a given period, without regard, in the case of land,
(i) to the value of any equipment or improvements that are not included in such
lease but which are located on such land, (ii) to the value of any reversionary
interest of the lessor in any equipment or improvements located on such land,
whether or not included in such lease, or (iii) to the highest and best use of
such land.
"Final Completion" has the meaning given such term in the EPC
----------------
Contract.
"Financial Close" means the date when the initial funding of the
---------------
Senior Debt has occurred.
"Financing Documents" has the meaning given such term in the Common
-------------------
Security Agreement.
"Financing Parties" means any lender or note purchaser that may at any
-----------------
time be party to the Financing Documents and any trustee or agent acting on
their behalf.
24
"Funding Company" means Port Xxxxxx Finance Corp., a Delaware
---------------
corporation.
"GFU 241" means the distillate hydrotreater located at the Refinery
-------
and designated GFU 241.
"GFU 242" means the distillate hydrotreater located at the Refinery
-------
and designated GFU 242.
"GFU 243" means the distillate hydrotreater located at the Refinery
-------
and designated GFU 243.
"Guaranteed Values" has the meaning given such term in the EPC
-----------------
Contract.
"Heavy Oil Processing Facility" means, collectively, the Xxxxx Complex
-----------------------------
and the Ancillary Equipment.
"Hydrocracker" or "HCU 942" means the hydrocracker to be constructed
------------ -------
at the Refinery and designated HCU 942.
"Hydrogen" means hydrogen purchased by the Xxxxx Company pursuant to
--------
the Hydrogen Supply Agreement.
"Hydrogen Supply Agreement" means the Supply Agreement, dated as of
-------------------------
August 1, 1999, between the Xxxxx Company and Air Products, Inc.
"Independent Engineer" means Xxxxxx & Xxxxx, Inc., or successor
--------------------
thereto appointed pursuant to the Financing Documents.
"Inflation Factor" shall mean, for any month, (a) the most current
----------------
Producer Price Index published by the U.S. Department of Labor, Bureau of
Statistics, divided by, (b) the Producer Price Index on August 19, 1999.
----------
"Labor Costs" shall mean, with respect to any service provided by
-----------
Xxxxx R&M, all reasonable direct labor costs of Xxxxx R&M in performing such
service including wages, salaries, overtime charges, reasonable and customary
bonuses, payroll insurance and taxes and holidays, vacations, group medical,
dental and life insurance and other employee benefits.
"LCO" means light cycle oil.
---
"Lessor Ancillary Equipment Upgrade" shall have the meaning given such
----------------------------------
term in Section 6.1 of the Ancillary Equipment Site Lease.
"Lien" any mortgage, security interest, pledge, hypothecation,
----
encumbrance or lien (statutory or other) of any kind or nature whatsoever.
25
"Long-Term Oil Supply Agreement" means the Maya Crude Oil Sale
------------------------------
Agreement, dated as of March 10, 1998, between PMI and Xxxxx R&M, as amended by
the First Amendment and Supplement to the Maya Crude Oil Sales Agreement, dated
as of August 19, 1999, and as assigned by Xxxxx R&M to the Xxxxx Company
pursuant to the Long-Term Oil Supply Agreement Assignment.
"Long-Term Oil Supply Agreement Assignment" means the Assignment of
-----------------------------------------
the Long-Term Oil Supply Agreement, dated as of August 19, 1999, by Xxxxx R&M to
the Xxxxx Company.
"Maya Crude Oil" means Mexican crude oil of the "Maya" type, as more
--------------
particularly described in the Long-Term Oil Supply Agreement and, to the extent
necessary, such alternative crude oil(s) and/or other feedstock(s) that may be
used to produce the Required Product Mix.
"Neches" mean Neches River Holding Corp., a Delaware corporation.
------
"Operating Year" means (i) the period beginning on the Start-up Date
--------------
and ending on the last day of the calendar year in which the Start-up Date
occurs and (ii) each calendar year thereafter. All annual amounts set forth in
the Xxxxx R&M Agreements shall be adjusted pro rata for the first Operating
Year.
"Performance Test Standards" has the meaning given such term in the
--------------------------
EPC Contract.
"Permit" means any valid waiver, exemption, variance, franchise,
------
permit, authorization, license or similar order of or from any federal, state,
county, municipal, regional, environmental or other governmental body,
instrumentality, agency, authority, court or other body having jurisdiction over
the Refinery, the Xxxxx Complex or the Ancillary Equipment or the performance of
any obligation under any Xxxxx R&M Agreement, any Project Document or any other
agreement in connection therewith.
"Permitted Liens" means (i) the respective rights and interests
---------------
created by or under the Financing Documents and the Project Documents, (ii)
Liens for Taxes that either are not delinquent or are being contested in good
faith and by appropriate proceedings diligently conducted, so long as such
proceedings do not (a) involve a substantial risk of foreclosure, forfeiture,
loss or sale of any portion of the Xxxxx Refinery Property subject to the
Ancillary Equipment Site Lease or the Xxxxx Complex Ground Lease or interest
therein, (b) interfere with the use, possession or disposition of any Xxxxx
Refinery Property subject to the Ancillary Equipment Site Lease or the Xxxxx
Complex Ground Lease or interest therein or (c) interfere with the payment of
rent under the Ancillary Equipment Site Lease or the Xxxxx Complex Ground Lease;
(iii) materialmen's, mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens arising in the ordinary course of business
for amounts that either are not more than 30 days past due or are being
contested in good faith by appropriate proceedings, so long as such proceedings
satisfy the conditions for the continuation of
26
proceedings to contest Taxes set forth in clause (ii) above; (iv) Liens of any
of the types referred to in clauses (ii) and (iii) above that have been bonded
for the full amount in dispute (or as to which other security arrangements
reasonably satisfactory to the Collateral Trustee have been made); (v) Liens
securing judgments, decrees or orders of any court (i) that are not currently
dischargeable or (ii) that have been discharged or stayed or appealed within
thirty (30) days after the date of such judgment, decree or order (in the case
of a stay or appeal, during the period of such stay or appeal); (vi) other Liens
that would not impair (x) the ability of the Xxxxx Company or its successors,
assigns or subtenants to operate the Xxxxx Complex in accordance with the Base
Case Financial Model or (y) any of the security interests granted, or to be
granted, by the Xxxxx Company to the Financing Parties pursuant to the Financing
Documents, (vii) with respect to the Ancillary Equipment Site Lease, the Liens
listed on Schedule I thereto; and (viii) with respect to the Xxxxx Complex
Ground Lease, the Liens listed on Schedule I thereto.
"Permitted Reimbursable Expenses" shall mean, with respect to any
-------------------------------
service provided by Xxxxx R&M, any reasonable expense or expenditure incurred in
performance of such service including, without limitation, (i) Labor Costs, (ii)
purchases of spare parts, tools, equipment, consumables, materials and other
supplies necessary for performance of such service and (iii) direct cost of
subcontract labor or services needed to perform such service.
"Person" an individual, partnership, corporation, business trust,
------
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"PMI" means P.M.I. Comercio Internacional, S.A. de C.V., a corporation
---
organized under the laws of Mexico.
"Product Purchase Agreement" means the Product Purchase Agreement,
--------------------------
dated as of August 19, 1999, between Xxxxx R&M and the Xxxxx Company, as
amended, supplemented or otherwise modified from time to time.
"Products" means each product described under the heading "Product" on
--------
Exhibits A-1 through A-42 to the Product Purchase Agreement.
"Project Documents" means, collectively, the Services and Supply
-----------------
Agreement, the Product Purchase Agreement, the Long-Term Oil Supply Agreement,
the EPC Contract, the Xxxxx Complex Ground Lease, the Ancillary Equipment Site
Lease and the Hydrogen Supply Agreement.
"Prudent Industry Practice" means those practices, methods, equipment,
-------------------------
specifications and standards of safety and performance, as the same may change
from time to time, as are commonly used in refinery facilities in the United
States of a type and size similar to the Refinery.
"Qualified Appraiser" means an appraisal firm with a national
-------------------
reputation and experience in appraising facilities of a nature and type similar
to the Refinery.
27
"Reconciliation Statement" has the meaning given such term in Section
------------------------
7.2(a) of the Services and Supply Agreement.
"Refinery" means, collectively, the existing oil refinery owned by
--------
Xxxxx R&M located in Port Xxxxxx, Texas, the Ancillary Equipment and the Xxxxx
Complex.
"Regulated Utilities" has the meaning given such term in Section
-------------------
5.5(f) of the Services and Supply Agreement.
"Required Product Mix" means, from time to time, the quantity and
--------------------
quality specifications of products to be produced by the Heavy Oil Processing
Facility pursuant to Section 2.2 of the Product Purchase Agreement.
"Sabine" means Sabine River Holding Corp., a Delaware corporation.
------
"Senior Debt" has the meaning given such term in the Common Security
-----------
Agreement.
"Senior Debt Obligations" means the obligations to pay principal and
-----------------------
interest on the disbursed Senior Debt, and all commissions, fees, indemnitees,
prepayment premiums and other amounts payable to the senior lenders under the
Financing Documents.
"Services" has the meaning set forth in Section 2.1 of the Services
--------
and Supply Agreement.
"Services and Supply Agreement" means the Services and Supply
-----------------------------
Agreement, dated as of August 19, 1999, between Xxxxx R&M and the Xxxxx Company,
as amended, supplemented or otherwise modified from time to time.
"Sour Water Stripper" means the sour water stripper to be constructed
-------------------
at the Refinery and designated SWS-8747.
"Standards" means, in addition to any other standards set forth in the
---------
EPC Contract, the technical requirements of the Project Documents, generally
accepted standards of professional care, skill, diligence and competence
applicable to engineering and construction and project management practices,
good refinery and petrochemical industry practices for oil refineries of similar
size, type and design to the Refinery, manufacturer's specifications and
warranty requirements and all Applicable Laws .
"Start-up Date" means the date on which hydrocarbons are first
-------------
introduced into the Xxxxx Complex for the processing of test runs under the EPC
Contract.
"Start-up Period" means the period from the Start-up Date until Final
---------------
Completion.
28
"Sulfur Plant" means the sulfur plant to be constructed at the
------------
Refinery and designated SRU 545.
"Supplies" has the meaning set forth in Section 2.1 of the Services
--------
and Supply Agreement.
"Tax" means, with respect to any site or parcel of land and the
---
improvements thereon, all real estate taxes and assessments, including
substitutes therefor or supplements thereto, assessed upon, levied against or
imposed on such land and improvements located thereon which accrue and are due
and payable during the term of the Xxxxx Complex Ground Lease. Notwithstanding
anything to the contrary contained herein, the term "Taxes" shall not include
any franchise, income, corporation, inheritance, succession, gift, estate,
realty transfer, capital or other tax which may be charged or assessed against
Lessor or any income, excess profit or revenue tax or any other tax which may be
assessed against or become a lien upon the Xxxxx Complex Site or the rent
accruing therefrom.
"Total Crude Oil Volume" means, for any day, the total daily volume,
----------------------
stated in BPD, of crude oil processed by the Crude Unit.
"Transfer and Assignment Agreement" means the Transfer and Assignment
---------------------------------
Agreement, dated as of August 19, 1999, between Xxxxx R&M and the Xxxxx Company,
as amended, supplemented or otherwise modified from time to time.
"VGO" means vacuum gas oil.
---
"VTBs" means vacuum tower bottoms.
----
"Warranties" means the requirements of all warranties and guarantees
----------
applicable to equipment and structures constituting the Xxxxx Complex or the
Ancillary Equipment provided by the Contractor, subcontractors, vendors,
suppliers or others.
EXHIBIT A-1
Product: Wet Gas from AVU 146
-------
Target Specification:
--------------------
Component Typical Test Method
--------- ------- -----------
Methane and Ethane 11.00% LV ASTM D-2163
Propane 27.21% LV ASTM D-2163
Normal Butane 50.28% LV ASTM D-2163
Isobutane 11.51% LV ASTM X-0000
Xxxxxxxx and Heavier 0.00% LV ASTM D-2163
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the total output of this Product multiplied by the Xxxxx Company Crude Oil
Volume divided by the Total Crude Oil Volume.
Price: For contained Methane: The weighted average delivered cost of natural
-----
gas purchased by Xxxxx converted into dollars per FOEB where 6.0 MMBTU is
equivalent to 1.0 FOEB less Fractionation Fee. The conversion of contained
methane to FOEB is as follows: Contained Methane (MSCF/D) * 0.0425 (LB/SCF) *
23,840 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB).
For contained Ethane: The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per FOEB where 6.0 MMBTU is equivalent
to 1.0 FOEB less Fractionation Fee. The conversion of contained ethane to FOEB
is as follows: Contained Ethane (MSCF/D) * 0.0800 (LB/SCF) * 22,169 (BTU/LB) /
1000 / 6.0 (MMBTU/FOEB).
For contained Propane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu, Texas Eastern Pipeline posting for spot
purchases of propane for each publication day less 0.10 cents/gallon marketing
fee multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of propane in the delivered Product.
For contained Normal Butane delivered from October through February: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Normal Butane delivered from March through September: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day less 3.0 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Isobutane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu posting for spot purchases of isobutane for
each publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of isobutane in the delivered Product.
For contained Pentanes and Heavier: The arithmetic average of the high/low Oil
Price Information Service Mont Belvieu posting for spot purchases of natural
gasoline Non-Dynegy for each publication day less 1.5 cents/gallon less 0.10
cents/gallon marketing fee multiplied by the
Product Purchase Agreement Page 1 August 3, 1999
EXHIBIT A-1
Inflation Factor less Fractionation Fee multiplied by the quantity of the
Product delivered on that day weighted by the respective volume of pentanes and
heavier in the delivered Product.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per
MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FI-
--------------------
500.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by gas chromatography.
Product Purchase Agreement Page 2 August 3, 1999
EXHIBIT A-2
Product: Penhex from AVU 146
-------
Target Specification:
--------------------
Property Typical Test Method
-------- ------- -----------
IBP 90 degrees F ASTM D-86
5% 128 degrees F ASTM D-86
10% 140 degrees F ASTM D-86
30% 168 degrees F ASTM D-86
50% 189 degrees F ASTM D-86
70% 209 degrees F ASTM D-86
90% 235 degrees F ASTM D-86
95% 249 degrees F ASTM D-86
FBP 267 degrees F ASTM D-86
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the output of this Product boiling at or below 195 degrees F. The
Xxxxx Company Share is defined as the output of this Product boiling at or below
195 (degrees)F multiplied by the Xxxxx Company Crude Oil Volume divided by the
Total Crude Oil Volume.
Price: For material boiling at or below 195 degrees F: The arithmetic average
-----
of the high/low Oil Price Information Service Mont Belvieu posting for spot
purchases of natural gasoline Non-Dynegy for each publication day less 1.5
cents/gallon less 0.10 cents/gallon marketing fee multiplied by the Inflation
Factor less 0.5 cents/gallon terminalling fee multiplied by the Inflation Factor
less Fractionation Fee. The marketing fee and terminalling fee shall only be
assessed if Penhex is sold to a 3/rd/ party.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per
MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FE-
--------------------
461.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by distillation.
Product Purchase Agreement Page 3 August 3, 1999
EXHIBIT A-3
Product: Unfinished Naphtha
-------
Target Specification: Target specifications for each component are described in
--------------------
Attachments I and II below.
Quantity: For days that Unfinished Naphtha is excessed to inventory, Xxxxx
--------
Company shall sell and Xxxxx shall purchase the "Xxxxx Company Share" of the
excessed Unfinished Naphtha. The Xxxxx Company Share is defined as the excessed
Unfinished Naphtha multiplied by the Xxxxx Company Crude Oil Volume divided by
the Total Crude Oil Volume.
The excessed Unfinished Naphtha is assumed to be composed of Light Naphtha from
AVU 146 boiling above 195 (degrees)F and Heavy Naphtha from AVU 146 in exact
proportion to the total production of each.
Price: The price is computed for each component as described in Attachments I
-----
and II below.
Delivery Point/Risk of Loss: The delivery point and risk of loss for each
---------------------------
component are described in Attachments I and II below.
Quantity Measurement: Quantity measurements shall be calculated by changes in
--------------------
Unfinished Naphtha inventory utilizing standard yield accounting methods.
Quality Measurement: Quality measurements for each component are described in
-------------------
Attachments I and II below.
Attachment I
------------
Component: Light Naphtha from AVU 146
---------
Target Specification:
--------------------
Property Typical Test Method
-------- ------- -----------
IBP 90 degrees F ASTM D-86
5% 128 degrees F ASTM D-86
10% 140 degrees F ASTM D-86
30% 168 degrees F ASTM D-86
50% 189 degrees F ASTM D-86
70% 209 degrees F ASTM D-86
90% 235 degrees F ASTM D-86
95% 249 degrees F ASTM D-86
FBP 267 degrees F ASTM D-86
N+A 27.7% LV ASTM D-5134 - Modified to C-15
Quantity: For days that Unfinished Naphtha is excessed to inventory, Xxxxx
--------
Company shall sell and Xxxxx shall purchase the "Xxxxx Company Share" of the
partial output of this Product boiling above 195 degrees F as defined above.
Price: For material boiling above 195 degrees F: The arithmetic average of the
-----
high/low Oil Price Information Service posting for spot purchases of U.S. Gulf
Coast Naphtha (Domestic 40 N+A) for each publication day less 0.15
cents/gallon/N+A number below 40 N+A plus 0.15 cents/gallon/N+A number above 40
N+A less 2.5 cents/gallon less 0.10 cents/gallon marketing fee multiplied by the
Inflation Factor less 0.5 cents/gallon terminalling fee multiplied by the
Inflation Factor less Fractionation Fee. The marketing fee and terminalling fee
shall only be assessed if
Product Purchase Agreement Page 4 August 3, 1999
EXHIBIT A-3
Unfinished Naphtha is sold to a 3/rd/ party.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per
MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FE-
--------------------
461.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by gas chromatography and distillation.
Attachment II
-------------
Component: Heavy Naphtha from AVU 146
---------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
FBP 390 degrees F Maximum ASTM D-86
N+A 34.7% LV Typical ASTM D-5134 - Modified to C-15
Quantity: For days that Unfinished Naphtha is excessed to inventory, Xxxxx
--------
Company shall sell and Xxxxx shall purchase the "Xxxxx Company Share" of the
partial output of this Product as defined above.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U.S. Gulf Coast Naphtha (Domestic 40 N+A) for
each publication day less 0.15 cents/gallon/N+A number below 40 N+A day plus
0.15 cents/gallon/N+A number above 40 N+A less 2.5 cents/gallon less 0.10
cents/gallon marketing fee multiplied by the Inflation Factor less 0.5
cents/gallon terminalling fee. The marketing fee and terminalling fee shall only
be assessed if Unfinished Naphtha is sold to a 3/rd/ party.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FI-
--------------------
436.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by gas
Product Purchase Agreement Page 5 August 3, 1999
EXHIBIT A-3
chromatography and distillation.
Product Purchase Agreement Page 6 August 3, 1999
EXHIBIT A-4
Product: Unfinished Jet from AVU 146
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
API Gravity 37.0 Minimum ASTM D-1298, ASTM D-287,
or ASTM D-4052
API Gravity 51.0 Maximum ASTM D-1298, ASTM D-287,
or ASTM D-4052
Freezing Point -40 Degrees C Maximum ASTM D-2386 or ASTM D-5972
Flash Point 108 Degrees F Minimum ASTM D-56
10% 400 Degrees F Maximum ASTM D-86
FBP 572 Degrees F Maximum ASTM D-86
Target specifications are based on current fungible aviation fuel namely
Colonial 54 Grade Jet Fuel. To the extent the specifications change for
Colonial 54 Grade Jet Fuel the target specifications will be changed
accordingly.
Quantity: For days that Unfinished Jet is excessed to inventory, Xxxxx Company
--------
shall sell and Xxxxx shall purchase the "Xxxxx Company Share" of the excessed
Unfinished Jet. The Xxxxx Company Share is defined as the excessed Unfinished
Jet multiplied by the Xxxxx Company Crude Oil Volume divided by the Total Crude
Oil Volume.
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report U. S.
-----
Gulf Coast Waterborne posting for spot purchases of No.2(0.2 wt% S diesel) for
each publication day less 1.5 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less 0.5 cents/gallon terminalling fee
multiplied by the quantity of the Product delivered on that day. The marketing
fee and terminalling fee shall only be assessed if Unfinished Jet is sold to a
3/rd/ party.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be calculated by changes in
--------------------
Unfinished Jet inventory utilizing standard yield accounting methods.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by distillation, gravity, freeze point, and flash.
Product Purchase Agreement Page 7 August 3, 1999
EXHIBIT A-5
Product: Unfinished Diesel
-------
Target Specification: : Target specifications for each component are described
--------------------
in Attachments I and II below.
Quantity: For days that Unfinished Diesel is excessed to inventory, Xxxxx
--------
Company shall sell and Xxxxx shall purchase the "Xxxxx Company Share" of the
excessed Unfinished Diesel only if the calculated Xxxxx Company Share is a
positive volume. The Xxxxx Company Share is defined as the excessed Unfinished
Diesel less the excessed Light Cycle Oil from FCCU 1241 multiplied by the Xxxxx
Company Crude Oil Volume divided by the Total Crude Oil Volume.
The excessed Light Cycle Oil from FCCU 1241 is calculated as follows:
Total Light Cycle Oil from FCCU 1241 - Light Cycle Oil to Cutter - Light
Cycle Oil to HCU 942
The excessed Unfinished Diesel is composed of Diesel from AVU 146, Light Gas Oil
from DCU 843, and Light Cycle Oil from FCCU 1241. The Xxxxx Company Share of the
Unfinished Diesel is composed only of Diesel from AVU 146 and Light Gas Oil from
DCU 843. The composition of the Xxxxx Company Share of the Unfinished Diesel is
calculated as follows:
Fraction of Diesel from AVU 146 = ( Total volume of Diesel from AVU 146 -
Diesel charge volume to GFU
241 ) / (Total volume of
Diesel from AVU 146 - Diesel
charge volume to GFU 241 +
Total volume of Light Gas Oil
from DCU 843 )
Fraction of Light Gas Oil from DCU 843 = Total volume of Light Gas Oil
from DCU 843 / (Total volume
of Diesel from AVU 146 -
Diesel charge volume to GFU
241 + Total volume of Light
Gas Oil from DCU 843 )
Price: The price is computed for each component as described in Attachments I
-----
and II below.
Delivery Point/Risk of Loss: The delivery point and risk of loss for each
---------------------------
component are described in Attachments I and II below.
Quantity Measurement: Quantity measurements shall be calculated by changes in
--------------------
Unfinished Diesel inventory utilizing standard yield accounting methods. The
following meters shall be used as input to the above calculations:
Total Light Cycle Oil from FCCU 1241: FCCU 1241 FC-1247
Light Cycle Oil to Cutter: Pump St. 379 FRC-201
Light Cycle Oil to HCU 942: XX-XXXX
Diesel Charge to GFU 241: XX-XXXX
Diesel from AVU 146: See Attachment I
Light Gas Oil from DCU 843: See Attachment II
Quality Measurement: Quality measurements for each component is described in
-------------------
Attachments I and II below.
Attachment I
------------
Component: Diesel from AVU 146
---------
Product Purchase Agreement Page 8 August 3, 1999
EXHIBIT A-5
Target Specification:
---------------------
Property Specification Test Method
-------- ------------- -----------
90% 540 Degrees F Minimum ASTM D-86
90% 640 Degrees F Maximum ASTM D-86
FBP 690 Degrees F Maximum ASTM D-86
Flash Point 130 Degrees F Minimum ASTM D-93
Target specifications are based on current fungible transportation diesel
fuel namely Colonial 74 Grade Low Sulfur Diesel Fuel. To the extent the
specifications change for Colonial 74 Grade Low Sulfur Diesel Fuel the
target specifications will be changed accordingly.
Quantity: For days that Unfinished Diesel is excessed to inventory, Xxxxx
--------
Company shall sell and Xxxxx shall purchase the "Xxxxx Company Share" of the
partial output of this Product as defined above.
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report
-----
U. S. Gulf Coast Waterborne posting for spot purchases of No.2(0.2 wt% S
diesel) for each publication day less 3.0 cents/gallon less 0.10 cents/gallon
marketing fee multiplied by the Inflation Factor less 0.5 cents/gallon
terminalling fee multiplied by the quantity of the Product delivered on that
day. The marketing fee and terminalling fee shall only be assessed if Unfinished
Diesel is sold to a 3/rd/ party.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FI-
--------------------
448.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by distillation and flash.
Attachment II
-------------
Component: Light Gas Oil from DCU 843
---------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
90% 540 Degrees F Minimum ASTM D-86
90% 640 Degrees F Maximum ASTM D-86
FBP 690 Degrees F Maximum ASTM D-86
Flash Point 130 Degrees F Minimum ASTM D-93
Target specifications are based on current fungible transportation diesel
fuel namely Colonial 74 Grade Low Sulfur Diesel Fuel. To the extent the
specifications change for Colonial 74 Grade Low Sulfur Diesel Fuel the
target specifications will be changed accordingly.
Quantity: For days that Unfinished Diesel is excessed to inventory, Xxxxx
--------
Company shall sell and
Product Purchase Agreement Page 9 August 3, 1999
EXHIBIT A-5
Xxxxx shall purchase the "Xxxxx Company Share" of the partial output of this
Product as defined above.
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price
-----
Report U.S. Gulf Coast Waterborne posting for spot purchases of No.2(0.2 wt% S
diesel) for each publication day less 5.0 cents/gallon less 0.10 cents/gallon
marketing fee multiplied by the Inflation Factor less 0.5 cents/gallon
terminalling fee multiplied by the quantity of the Product delivered on that
day. The marketing fee and terminalling fee shall only be assessed if Unfinished
Diesel is sold to a 3/rd/ party.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: Quantity measurements shall be taken at DCU 843 meter FE-
--------------------
3599.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by distillation and flash.
Product Purchase Agreement Page 10 August 3, 1999
EXHIBIT A-6
Product: Atmospheric Gas Oil from AVU 146
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
Flash Point 165 Degrees F Minimum ASTM D-93
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast VGO (High Sulfur) Cargo for each
publication day less 2.0 cents/gallon multiplied by the quantity of the Product
delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FI-
--------------------
451.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by flash.
Product Purchase Agreement Page 11 August 3, 1999
EXHIBIT A-7
Product: Light Vacuum Gas Oil from AVU 146
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
Flash Point 165 Degrees F Minimum ASTM D-93
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U.S. Gulf Coast VGO (High Sulfur) Cargo for each
publication day less 2.0 cents/gallon multiplied by the quantity of the Product
delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FI-
--------------------
697.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by flash.
Product Purchase Agreement Page 12 August 3, 1999
EXHIBIT A-8
Product: Heavy Vacuum Gas Oil from AVU 146
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
Flash Point 165 Degrees F Minimum ASTM D-93
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the output of this Product which is not processed by HCU 942. The
Xxxxx Company Share is defined as the total output of this product less the
volume processed by HCU 942 multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U.S. Gulf Coast VGO (High Sulfur) Cargo for each
publication day less 2.0 cents/gallon multiplied by the quantity of the Product
delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: The total quantity measurement of Heavy Vacuum Gas Oil
--------------------
from AVU 146 shall be taken at AVU 146 meter FI-785. The quantity measurement
of Heavy Vacuum Gas Oil from AVU 146 processed by HCU 942 shall be taken as HCU
942 meter FQ-1020 less FCCU 1241 Light Cycle Oil meter XX-XXXX.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by flash.
Product Purchase Agreement Page 13 August 3, 1999
EXHIBIT A-9
Product: Vacuum Tower Bottoms from AVU 146 to Xxxxx Storage
-------
Target Specification:
-----------------------
Property Specification Test Method
-------- ------------- -----------
Flash Point 250 Degrees F Minimum ASTM D-93
API Gravity 0.0 Minimum ASTM D-1298, ASTM D-287,
or ASTM D-4052
Viscosity @ 210 Degrees F 230,000 cSt Maximum ASTM D-445
Viscosity @ 275 Degrees F 9,400 cSt Maximum ASTM D-445
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the total output of this product multiplied by the Xxxxx Company Crude Oil
Volume divided by the Total Crude Oil Volume.
Price: The price is calculated by the following formula:
-----
VTB = ( #6 Fuel - 0.75 - 0.363 * Jet ) / ( 1 - 0.363 ) - 0.042 marketing
fee
Where:
VTB - the price of Vacuum Tower Bottoms from AVU 146 to Xxxxx Storage for
each publication day multiplied by the quantity of the
Product delivered on that day in dollars/barrel.
#6 Fuel - the arithmetic average of the high/low Xxxxx'x Oilgram Price
Report U.S. Gulf Coast Waterborne posting for spot
purchases of No.6, 3.5%S for each publication day in
dollars/barrel.
Jet - the arithmetic average of the high/low Xxxxx'x Oilgram Price Report
U.S. Gulf Coast Pipeline posting for spot purchases of
Jet/Kero 54 for each publication day in dollars/barrel.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of AVU 146.
Quantity Measurement: Quantity measurements shall be taken at AVU 146 meter FI-
--------------------
844.
Quality Measurement: Grab samples shall be taken (3) times per week and
-------------------
analyzed by flash, API gravity, and viscosity.
Product Purchase Agreement Page 14 August 3, 1999
EXHIBIT A-10
Product: Absorber Gas to Refinery Fuel from DCU 843
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
H2S 50 ppmw Maximum Draeger
Higher Heating Value 1050 BTU/SCF Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the total output of this Product multiplied by the Xxxxx Company Crude Oil
Volume divided by the Total Crude Oil Volume.
Price: The weighted average cost of natural gas purchased by Xxxxx converted
-----
into dollars per FOEB where 6.0 MMBTU is equivalent to 1.0 FOEB.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: Quantity measurements shall be taken at DCU 843 meter FE-
--------------------
3619.
Quality Measurement: Samples shall be taken at least (1) time per day and
-------------------
analyzed by draeger and heating value.
Product Purchase Agreement Page 15 August 3, 1999
EXHIBIT A-11
Product: Propane/Propylene Mix from DCU 843
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
H2S 100 ppmw Maximum Draeger
Ethane 5.0% LV Maximum ASTM D-2163
Butane and Heavier 5.0% LV Maximum ASTM D-2163
Propane 72.0% LV Typical ASTM D-2163
Propylene 28.0% LV Typical ASTM D-2163
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: For contained Propane: The arithmetic average of the high/low Oil Price
-----
Information Service Mont Belvieu, Texas Eastern Pipeline posting for spot
purchases of propane for each publication day less 0.10 cents/gallon marketing
fee multiplied by the quantity of the Product delivered on that day weighted by
the respective volume of propane in the delivered Product.
For contained Propylene: The arithmetic average of the high/low prices paid by
Chevron Chemical Company (CCC) for propylene content in Propane/Propylene mix
(of equivalent volumes, specifications, freight costs, delivery periods and
other terms and conditions, but excluding purchases from CCC Affiliates or
distress purchases) during the calendar month of delivery, but only including
one-half of the actual pipeline tariff for comparable material from Mont Belvieu
to the Refinery less 0.10 cents/gallon marketing fee.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: Quantity measurements shall be taken at DCU 843 meter
--------------------
FE-3271.
Quality Measurement: Grab samples shall be taken at least (1) time per day and
-------------------
analyzed by draeger and at least (3) times per week and analyzed by gas
chromatography.
Product Purchase Agreement Page 16 August 3, 1999
EXHIBIT A-12
Product: Butane/Butylene Mix from DCU 843
-------
Component Specification Test Method
--------- ------------- -----------
H2S 5 ppmw Maximum Draeger
Sulfur 50 ppmw Maximum ASTM D-4045
Total Nitrogen 1 ppmw Maximum ASTM D-4629
Propane and Lighter 6.0% LV Maximum ASTM X-0000
Xxxxxxx and Heavier 5.0% LV Maximum ASTM X-0000
Xxxxxx and Heavier 0.05% LV Maximum ASTM D-2163
Butadiene 0.35% LV Maximum ASTM D-2163
Isobutane 13.0% LV Typical ASTM D-2163
Normal Butane 47.0% LV Typical ASTM D-2163
Butylenes 40.0% LV Typical ASTM D-2163
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: For contained Propane and Lighter: The monthly quoted price for Texas
-----
Eastern Natural Gas Spot Market Price as published by "Dynegy", in dollars/MMBTU
plus 0.15 dollars/MMBTU multiplied by 6.25 divided by 70.517 multiplied by 100
less 0.10 cents/gallon marketing fee multiplied by the quantity of the Product
delivered weighted by the respective volume of propane and lighter in the
delivered Product.
For contained Pentane and Heavier: The low Oil Price Information Service Mont
Belvieu, posting for spot purchases of Non-Dynegy Natural Gasoline for each
publication day less 4.0 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the quantity of the Product delivered on that day weighted by the
respective volume of pentane and heavier in the delivered Product.
For contained Isobutane: The low Oil Price Information Service Mont Belvieu,
posting for spot purchases of Isobutane for each publication day less 0.10
cents/gallon marketing fee multiplied by the quantity of the Product delivered
on that day weighted by the respective volume of isobutane in the delivered
Product.
For contained Normal Butane: The low Oil Price Information Service Mont Belvieu,
posting for spot purchases of Normal Butane for each publication day less 0.10
cents/gallon marketing fee multiplied by the quantity of the Product delivered
on that day weighted by the respective volume of Normal Butane in the delivered
Product.
For contained Butylenes: The price is calculated by the following formula:
Butylene = 1.75 * Premium - 1.15 * Isobutane - 10 cents/gallon - 0.10
cents/gallon marketing fee
Where:
Butylene - the price of contained butylenes for each publication day
multiplied by the quantity of the Product delivered on that
day weighted by the respective volume of Butylene in the
delivered Product.
Premium - the low Xxxxx'x Oilgram Price Report U. S. Gulf Coast
Pipeline posting for spot purchases of Premium Unleaded (93
Octane, prevailing (non-supplemental) RVP, non-Oxygenated,
non Reformulated) for each publication day.
Isobutane - the low Oil Price Information Service Mont Belvieu, posting
for spot purchases of Isobutane for each publication day.
Product Purchase Agreement Page 17 August 3, 1999
EXHIBIT A-12
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: Quantity measurements shall be taken at DCU 843 meter
--------------------
FE-3210.
Quality Measurement: Grab samples shall be taken at least (1) time per day and
-------------------
analyzed by draeger and at least (3) times per week and analyzed by gas
chromatography, MDA Sulfur, and Antek Nitrogen.
Product Purchase Agreement Page 18 August 3, 1999
EXHIBIT A-13
Product: Untreated Naphtha from DCU 843
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
FBP 390 degrees F Maximum ASTM D-86
N+A 25.5% LV Typical ASTM D-5134 - Modified to C-15
Existent Washed
Gums 1 mg/100 ml Maximum ASTM D-381
Oxygen Stability 360+ Minimum ASTM D-525
Silica 1.5 ppmw Maximum UOP-484
Quantity: For days that Naphtha from DCU 843 is not treated in the Naphtha
--------
Hydrotreater 1344, Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx
Company Share" of the Untreated Naphtha from DCU 843 as defined below. The Xxxxx
Company Share is defined as the Untreated Naphtha from DCU 843 multiplied by the
Xxxxx Company Crude Oil Volume divided by the Total Crude Oil Volume.
Untreated Naphtha from DCU 843 = Total Naphtha from DCU 843 - Xxxxx
Naphtha to Naphtha Hydrotreater 1344
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast Naphtha (Domestic 40 N+A) for
each publication day less 0.15 cents/gallon/N+A number below 40 N+A plus 0.15
cents/gallon/N+A number above 40 N+A less 4.0 cents/gallon.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: The Total Naphtha from DCU 843 shall be taken at DCU 843
--------------------
meter FE-3755. The quantity measurement of Xxxxx Naphtha to Naphtha Hydrotreater
1344 shall be taken as CCR 1344 meter FRC-601.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
for each specification.
Product Purchase Agreement Page 19 August 3, 1999
EXHIBIT A-14
Product: Hydrogen to DCU 843 Naphtha Hydrotreater
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
H2S 10 ppmw Maximum Draeger
Hydrogen 84.36% Mole Typical UOP-539
Hydrogen 80.00% Mole Minimum UOP-539
Higher Heating Value 500 BTU/SCF Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the total Hydrogen
--------
requirement necessary to process Xxxxx feedstocks in DCU 843 Naphtha
Hydrotreater. Xxxxx'x Hydrogen requirement shall be calculated as a portion of
the Total Make-up Hydrogen to DCU 843 as follows:
Hydrogen
--------
Xxxxx Hydrogen Portion = Total Make-up Hydrogen to DCU 843 Naphtha
Hydrotreater * (1 - Xxxxx Company Crude Oil Volume
/ Total Crude Oil Volume )
Where:
Total Make-up Hydrogen
to DCU 843 Naphtha
Hydrotreater (FOEB/D) = Total Make-up Hydrogen to DCU 843 Naphtha
Hydrotreater (MSCF/D) * Mole Fraction Hydrogen *
0.0053 (LB/SCF) * 60,950 (BTU/LB) / 1000 / 6.0
(MMBTU/FOEB)
Non-Hydrogen
------------
Xxxxx Non-Hydrogen Portion = Total Make-up Hydrogen to DCU 843 Naphtha
Hydrotreater * (1 - Xxxxx Company Crude Oil
Volume / Total Crude Oil Volume ) - Xxxxx
Hydrogen Portion
Where:
Total Make-up Hydrogen
to DCU 843 Naphtha
Hydrotreater (FOEB/D) = Total Make-up Hydrogen to DCU 843 Naphtha
Hydrotreater (MSCF/D) * Higher Heating Value
(BTU/SCF) / 1000 / 6.0 (MMBTU/FOEB)
Price: For Hydrogen: The weighted average delivered cost of hydrogen purchased
-----
by Xxxxx Company from Air Products converted into dollars per FOEB where 6.0
MMBTU is equivalent to 1.0 FOEB.
For Non-Hydrogen: The weighted average delivered cost of natural gas purchased
by Xxxxx converted into dollars per FOEB where 6.0 MMBTU is equivalent to 1.0
FOEB.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: Product quantity measurements shall be taken at DCU 843
--------------------
FE-3675.
Quality Measurement: Grab samples shall be taken and analyzed by xxxxxxx and at
-------------------
least (3)
Product Purchase Agreement Page 20 August 3, 1999
EXHIBIT A-14
times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 21 August 3, 1999
EXHIBIT A-15
Product: High Pressure Hydrogen Purge Gas from DCU 843 Naphtha Hydrotreater
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
H2S 80 ppmw Maximum Draeger
Hydrogen 77.70% Mole Typical UOP-539
Hydrogen 75.00% Mole Minimum UOP-539
Higher Heating Value 600 BTU/SCF Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of the
--------
components of this Product produced by Xxxxx Company feedstocks in DCU 843.
That portion of each component is calculated as follows:
Hydrogen
--------
Xxxxx Company Hydrogen Portion = Total Contained Hydrogen in High Pressure
Hydrogen Purge Gas * Xxxxx Company Crude Oil Volume
/ Total Crude Oil Volume
Where:
Total Contained Hydrogen in
High Pressure Hydrogen
Purge Gas (FOEB/D) = Total High Pressure Hydrogen Purge Gas from DCU 843
(MSCF/D) * Mole Fraction Hydrogen * 0.0053 (LB/SCF)
* 60,950 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Non-Hydrogen
------------
Xxxxx Company Non-Hydrogen Portion = Total High Pressure Hydrogen Purge
Gas * Xxxxx Company Crude Oil Volume / Total
Crude Oil Volume - Xxxxx Company Hydrogen
Portion
Where:
Total High Pressure
Hydrogen
Purge Gas (FOEB/D) = Total High Pressure Hydrogen Purge Gas from DCU 843
(MSCF/D) * Higher Heating Value (BTU/SCF) / 1000 / 6.0
(MMBTU/FOEB)
Price: For Hydrogen: The weighted average delivered cost of hydrogen purchased
-----
by Xxxxx Company from Air Products converted into dollars per FOEB where 6.0
MMBTU is equivalent to 1.0 FOEB.
For Non-Hydrogen: The weighted average delivered cost of natural gas purchased
----------------
by Xxxxx converted into dollars per FOEB where 6.0 MMBTU is equivalent to 1.0
FOEB.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: Product quantity measurements shall be taken at DCU 843
--------------------
FQ-3735.
Quality Measurement: Grab samples shall be taken and analyzed by xxxxxxx and at
-------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 22 August 3, 1999
EXHIBIT A-16
Product: Heavy Gas Oil from DCU 843
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
Flash Point 165 degrees F Minimum ASTM D-93
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the output of this Product which is not processed by HCU 942. The
Xxxxx Company Share is defined as the total output of this product less the
volume processed by HCU 942 multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast VGO (High Sulfur) Cargo for each
publication day less 6.0 cents/gallon multiplied by the quantity of the Product
delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of DCU 843.
Quantity Measurement: The total quantity measurement of Heavy Gas Oil from DCU
--------------------
843 shall be taken at DCU 843 meter FE-1690. The quantity measurement of Heavy
Gas Oil from DCU 843 processed by HCU 942 shall be taken as DCU 843 meter FE-
1000.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
by flash.
EXHIBIT A-17
Product: Petroleum Coke
-------
Target Specification: None
--------------------
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: Actual 3rd party sales price adjusted back to the custody transfer point
-----
for transportation and storage cost less $0.05 per wet metric ton marketing fee.
Delivery Point/Risk of Loss: This product shall be delivered into railcar or
---------------------------
storage facility and risk of loss shall pass at the point of delivery.
Quantity Measurement / Metering Facilities: Based on invoiced quantity.
------------------------------------------
Quality Measurement: Based on invoiced quality.
-------------------
Product Purchase Agreement Page 24 August 3, 1999
EXHIBIT A-18
Product: Hydrogen to HCU 942
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
Hydrogen 99.9% Mole Minimum UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the total Hydrogen
--------
requirement necessary to process Xxxxx feedstocks in HCU 942. Xxxxx'x Hydrogen
requirement shall be calculated as a portion of the Total Make-up Hydrogen to
HCU 942 as follows:
Xxxxx Hydrogen Requirement = Total Make-up Hydrogen to HCU 942 * Xxxxx
Deemed Hydrogen / Total Deemed Hydrogen
Where:
Xxxxx Deemed Hydrogen = Light Cycle Oil to HCU 942 * 2074 + Heavy
Gas Oil from DCU 843 to HCU 942 * ( 1 -
Xxxxx Company Crude Oil Volume / Total
Crude Oil Volume ) * 2169 + ( Heavy Gas Oil
from AVU 146 to HCU 942 ) * ( 1 - Xxxxx
Company Crude Oil Volume / Total Crude Oil
Volume ) * 2015
Total Deemed Hydrogen = Light Cycle Oil to HCU 942 * 2074 + Heavy
Gas Oil from DCU 843 to HCU 942 * 2169 +
( Heavy Gas Oil from AVU 146 to HCU 942 ) *
2015
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
-------------------------------------------------------------------------------------
Heavy Gas Oil Heavy Gas Oil
Deemed Quantities Light Cycle Oil from DCU 843 from AVU 146
-------------------------------------------------------------------------------------
Total Hydrogen
Consumption (SCF/B) 2074 2169 2015
-------------------------------------------------------------------------------------
Price: The actual cost Xxxxx Company pays for hydrogen under contract with Air
-----
Products.
Delivery Point/Risk of Loss: This product shall be delivered by pipeline to the
---------------------------
battery limit of HCU 942 and risk of loss shall pass at the point of delivery.
Quantity Measurement: The following meters shall be used as input to the above
--------------------
calculations:
Total Make-up Hydrogen to HCU 942: HCU 942 FQ-1700
Light Cycle Oil to HCU 942: XX-XXXX
Heavy Gas Oil from DCU 843 to HCU 942: DCU 843 FE-1000
Heavy Gas Oil from AVU 146 & Light Cycle Oil to HCU 942: HCU 942 FQ-1020
Quality Measurement: Grab samples shall be taken at least (3) times per week and
-------------------
analyzed by gas chromatography.
Product Purchase Agreement Page 25 August 3, 1999
EXHIBIT A-19
Product: Stripper Off-Gas from HCU 942
Target Specification:
---------------------
Component Specification Test Method
--------- ------------- -----------
H2S 50 ppmw Maximum Draeger
Water 2.66% Mole Typical UOP-539
Hydrogen 45.76% Mole Typical UOP-539
Methane 4.00% Mole Typical UOP-539
Ethane 4.90% Mole Typical UOP-539
Propane 13.67% Mole Typical UOP-539
Isobutane 11.26% Mole Typical UOP-539
Normal Butane 7.83% Mole Typical UOP-539
Pentane and Heavier 9.92% Mole Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of each
--------
component of this Product produced by Xxxxx Company feedstocks in HCU 942. That
portion for each component is calculated as follows:
Hydrogen
--------
Xxxxx Company Hydrogen = Total Contained Hydrogen in Stripper Off-Gas *
( Heavy Gas Oil from AVU 146 to HCU 942 + Heavy Gas Oil from
DCU 843 to HCU 942 ) * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume / ( Heavy Gas Oil from AVU 146 to HCU
942 + Heavy Gas Oil from DCU 843 to HCU 942 + Light Cycle
Oil to HCU 942 )
Where:
Total Contained Hydrogen in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from HCU 942 (MSCF/D)
* Mole Fraction Hydrogen * 0.0053 (LB/SCF) *
60,950 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
Methane
-------
Xxxxx Company Methane = Total Contained Methane in Stripper Off-Gas
* ( Heavy Gas Oil from AVU 146 to HCU 942 * 0.34 + Heavy Gas
Oil from DCU 843 to HCU 942 * 0.36 ) * Xxxxx Company Crude
Oil Volume / Total Crude Oil Volume / ( Heavy Gas Oil from
AVU 146 to HCU 942 * 0.34 + Heavy Gas Oil from DCU 843 to
HCU 942 * 0.36 + Light Cycle Oil to HCU 942 * 0.18 )
Where:
Total Contained Methane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from HCU 942 (MSCF/D)
* Mole Fraction Methane * 0.0425 (LB/SCF) *
23,840 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
Product Purchase Agreement Page 26 August 3, 1999
EXHIBIT A-19
Ethane
------
Xxxxx Company Ethane = Total Contained Ethane in Stripper Off-Gas
* ( Heavy Gas Oil from AVU 146 to HCU 942 * 0.28 + Heavy Gas
Oil from DCU 843 to HCU 942 * 0.31 ) * Xxxxx Company Crude
Oil Volume / Total Crude Oil Volume / ( Heavy Gas Oil from
AVU 146 to HCU 942 * 0.28 + Heavy Gas Oil from DCU 843 to
HCU 942 * 0.31 + Light Cycle Oil to HCU 942 * 0.24 )
Where:
Total Contained Ethane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from HCU 942 (MSCF/D) *
Mole Fraction Ethane * 0.0800 (LB/SCF) * 22,169 (BTU/LB) /
1000 / 6.0 (MMBTU/FOEB)
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 & Light
Cycle Oil to HCU 942 - Light Cycle
Oil to HCU 942
Propane
-------
Xxxxx Company Propane = Total Contained Propane in Stripper Off-Gas *
( Heavy Gas Oil from AVU 146 to HCU 942 * 1.30 + Heavy Gas
Oil from DCU 843 to HCU 942 * 1.37 ) * Xxxxx Company Crude
Oil Volume / Total Crude Oil Volume / ( Heavy Gas Oil from
AVU 146 to HCU 942 * 1.30 + Heavy Gas Oil from DCU 843 to
HCU 942 * 1.37 + Light Cycle Oil to HCU 942 * 0.87 )
Where:
Total Contained Propane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from HCU 942 (MSCF/D) *
Mole Fraction Propane * 0.1187 (LB/SCF) /
177.7 (LB/BBL) * 1000
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 & Light
Cycle Oil to HCU 942 - Light Cycle
Oil to HCU 942
Isobutane
---------
Xxxxx Company Propane = Total Contained Isobutane in Stripper Off-Gas
* ( Heavy Gas Oil from AVU 146 to HCU 942 * 1.93 + Heavy Gas
Oil from DCU 843 to HCU 942 * 2.03 ) * Xxxxx Company Crude
Oil Volume / Total Crude Oil Volume / ( Heavy Gas Oil from
AVU 146 to HCU 942 * 1.93 + Heavy Gas Oil from DCU 843 to
HCU 942 * 2.03 + Light Cycle Oil to HCU 942 * 0.38 )
Where:
Total Contained Isobutane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from HCU 942 (MSCF/D) *
Mole Fraction Isobutane * 0.1582 (LB/SCF) /
197.2 (LB/BBL) * 1000
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 & Light
Cycle Oil to HCU 942 - Light Cycle
Oil to HCU 942
Product Purchase Agreement Page 27 August 3, 1999
EXHIBIT A-19
Normal Butane
-------------
Xxxxx Company Normal Butane = Total Contained Normal Butane in Stripper
Off-Gas * ( Heavy Gas Oil from AVU 146 to HCU 942
* 0.93 + Heavy Gas Oil from DCU 843 to HCU 942 *
0.98 ) * Xxxxx Company Crude Oil Volume / Total
Crude Oil Volume / ( Heavy Gas Oil from AVU 146 to
HCU 942 * 0.93 + Heavy Gas Oil from DCU 843 to HCU
942 * 0.98 + Light Cycle Oil to HCU 942 * 0.18 )
Where:
Total Contained Normal Butane
In Stripper Off-Gas (B/D) = Total Stripper Off-Gas from HCU 942 (MSCF/D) *
Mole Fraction Normal Butane * 0.1585 (LB/SCF) /
204.6 (LB/BBL) * 1000
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -Light
Cycle Oil to HCU 942
Pentane and Heavier
-------------------
Xxxxx Company Pentane
and Heavier = Total Contained Pentane and Heavier in Stripper Off-Gas *
( Heavy Gas Oil from AVU 146 to HCU 942 * 7.23 +
Heavy Gas Oil from DCU 843 to HCU 942 * 7.21 ) *
Xxxxx Company Crude Oil Volume / Total Crude Oil
Volume / ( Heavy Gas Oil from AVU 146 to HCU 942 *
7.23 + Heavy Gas Oil from DCU 843 to HCU 942 *
7.21 + Light Cycle Oil to HCU 942 * 1.66 )
Where:
Total Contained Pentane
and Heavier In
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from HCU 942 (MSCF/D) *
Mole Fraction Pentane and Heavier * 0.1980
(LB/SCF) / 221.0 (LB/BBL) * 1000
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
---------------------------------------------------------------------------------------
Deemed Quantities Heavy Gas Oil Heavy Gas Oil
(Volume % of Feed Type) Light Cycle Oil from DCU 843 from AVU 146
---------------------------------------------------------------------------------------
Methane 0.18 0.36 0.34
---------------------------------------------------------------------------------------
Ethane 0.24 0.31 0.28
---------------------------------------------------------------------------------------
Propane 0.87 1.37 1.30
---------------------------------------------------------------------------------------
Isobutane 0.38 2.03 1.93
---------------------------------------------------------------------------------------
Normal Butane 0.18 0.98 0.93
---------------------------------------------------------------------------------------
Pentane & Heavier 1.66 7.21 7.23
---------------------------------------------------------------------------------------
Price: For Hydrogen, Methane, and Ethane: The weighted average delivered cost of
-----
natural gas purchased by Xxxxx converted into dollars per FOEB where 6.0 MMBTU
is equivalent to 1.0 FOEB less Fractionation Fee.
Product Purchase Agreement Page 28 August 3, 1999
EXHIBIT A-19
For contained Propane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu, Texas Eastern Pipeline posting for spot
purchases of propane for each publication day less 0.10 cents/gallon marketing
fee multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of propane in the delivered Product.
For contained Isobutane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu posting for spot purchases of isobutane for
each publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of isobutane in the delivered Product.
For contained Normal Butane delivered from October through February: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Normal Butane delivered from March through September: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day less 3.0 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Pentanes and Heavier: The arithmetic average of the high/low Oil
Price Information Service Mont Belvieu posting for spot purchases of natural
gasoline Non-Dynegy for each publication day less 1.5 cents/gallon less 0.10
cents/gallon marketing fee multiplied by the Inflation Factor less Fractionation
Fee multiplied by the quantity of the Product delivered on that day weighted by
the respective volume of pentanes and heavier in the delivered Product.
For all other contained components: All other components are transferred to
Xxxxx at no cost.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of HCU 942.
Quantity Measurement: Quantity measurements shall be taken at HCU 942 meter
--------------------
FQ-2251. The following meters shall be used as input to the above calculations:
Light Cycle Oil to HCU 942: XX-XXXX
Page purchase Agreement Page 29 August 3, 1999
EXHIBIT A-19
Heavy Gas Oil from DCU 843 to HCU 942: DCU 843 FE-1000
Heavy Gas Oil from AVU 146 & Light Cycle Oil to HCU 942: HCU 942 FQ-1020
Quality Measurement: Grab samples shall be taken at least (1) time per day and
-------------------
analyzed by xxxxxxx and at least (3) times per week and analyzed by gas
chromatography.
Product Purchase Agreement Page 30 August 3, 1999
EXHIBIT A-20
Product: Light Naphtha from HCU 942
-------
Target Specification:
---------------------
Property Specification Test Method
-------- ------------- -----------
Propane 0.17% LV Typical UOP-539
Isobutane 1.59% LV Typical UOP-539
Normal Butane 1.56% LV Typical UOP-539
Butane and Lighter 5.00% LV Maximum UOP-539
Xxxx Vapor Pressure @ 100 degrees F 13.5 PSIG Maximum ASTM D-5191 (Xxxxxxx)
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in HCU 942. That portion is
calculated as follows:
Xxxxx Company Light Naphtha = Total Light Naphtha * ( Heavy Gas Oil
from AVU 146 to HCU 942 * 7.23 + Heavy Gas Oil from
DCU 843 to HCU 942 * 7.21 ) * Xxxxx Company Crude
Oil Volume / Total Crude Oil Volume / ( Heavy Gas
Oil from AVU 146 to HCU 942 * 7.23 + Heavy Gas Oil
from DCU 843 to HCU 942 * 7.21 + Light Cycle Oil to
HCU 942 * 1.66 )
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
-------------------------------------------------------------------------------
Deemed Quantities Heavy Gas Oil Heavy Gas Oil
(Volume % of Feed Type) Light Cycle Oil from DCU 843 from AVU 146
-------------------------------------------------------------------------------
Light Naphtha 1.66 7.21 7.23
-------------------------------------------------------------------------------
Price: The arithmetic average of the high/low Oil Price Information Service Mont
-----
Belvieu posting for spot purchases of natural gasoline Non-Dynegy for each
publication day less 1.5 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per
MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of HCU 942.
Product Purchase Agreement Page 31 August 3, 1999
EXHIBIT A-20
Quantity Measurement: Quantity measurements shall be taken at HCU 942 meter
--------------------
FQ-2700. The following meters shall be used as input to the above calculations:
Light Cycle Oil to HCU 942: XX-XXXX
Heavy Gas Oil from DCU 843 to HCU 942: DCU 843 FE-1000
Heavy Gas Oil from AVU 146 & Light Cycle Oil to HCU 942: HCU 942 FQ-1020
Quality Measurement: Grab samples shall be taken at least (1) time per day and
-------------------
analyzed by xxxxxxx and at least (3) times per week and analyzed by gas
chromatography, and Xxxxxxx vapor pressure.
Product Purchase Agreement Page 32 August 3, 1999
EXHIBIT A-21
Product: Heavy Naphtha from HCU 942
-------
Target Specification:
---------------------
Property Specification Test Method
-------- ------------- -----------
FBP 390 degrees F Maximum ASTM D-86
N+A 73.0% LV Typical ASTM D-5134 - Modified to C-15
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in HCU 942. That portion is
calculated as follows:
Xxxxx Company Heavy Naphtha = Total Heavy Naphtha * ( Heavy Gas Oil
from AVU 146 to HCU 942 * 19.96 + Heavy Gas Oil from
DCU 843 to HCU 942 * 20.02 ) * Xxxxx Company Crude Oil
Volume / Total Crude Oil Volume / ( Heavy Gas Oil from
AVU 146 to HCU 942 * 19.96 + Heavy Gas Oil from DCU 843
to HCU 942 * 20.02 + Light Cycle Oil to HCU 942 *
14.66 )
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
----------------------------------------------------------------------------------------
Deemed Quantities Heavy Gas Oil Heavy Gas Oil
(Volume % of Feed Type) Light Cycle Oil from DCU 843 from AVU 146
----------------------------------------------------------------------------------------
Heavy Naphtha 14.66 20.02 19.96
----------------------------------------------------------------------------------------
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast Naphtha (Domestic 40 N+A) for
each publication day less 0.15 cents/gallon/N+A number below 40 N+A plus 0.15
cents/gallon/N+A number above 40 N+A less 1.0 cents/gallon.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of HCU 942.
Quantity Measurement: Quantity measurements shall be taken at HCU 942 meter
--------------------
FQ-2600. The following meters shall be used as input to the above calculations:
Light Cycle Oil to HCU 942: XX-XXXX
Heavy Gas Oil from DCU 843 to HCU 942: DCU 843 FE-1000
Heavy Gas Oil from AVU 146 & Light Cycle Oil to HCU 942: HCU 942 FQ-1020
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
by gas chromatography and distillation.
Product Purchase Agreement Page 33 August 3, 1999
EXHIBIT A-22
Product: Kerosene from HCU 942
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
API Gravity 37.0 Minimum ASTM D-1298,
ASTM D-287, or
ASTM D-4052
API Gravity 51.0 Maximum ASTM D-1298,
ASTM D-287, or
ASTM D-4052
Corrosion 2 hrs. @212 degrees F 1 Maximum ASTM D-130
MSEP 85 Minimum ASTM D-3948
Water Reaction Interface Rating 1b Maximum ASTM X-0000
Xxxxxxxx Xxxxx -40 degrees C Maximum ASTM D-2386
or
ASTM D-5972
Viscosity @ -4 degrees F 8.0 cSt Maximum ASTM D-445
Flash Point 108 degrees F Minimum ASTM D-56
10% 400 degrees F Maximum ASTM D-86
FBP 572 degrees F Maximum ASTM D-86
Residue, % 1.5 Maximum ASTM D-86
Loss, % 1.5 Maximum ASTM D-86
Existent Gum 7 mg/100 ml Maximum ASTM D-381
Thermal Stability Pressure Drop 25 mm/Hg Maximum ASTM D-3241
Thermal Stability Tube Deposit 3 Code Maximum ASTM D-3241
Sulfur 0.30 wt% Maximum ASTM D-2622
Doctor Negative ASTM D-4952
Aromatics 25 vol% Maximum ASTM D-1319
Neutralization Number 0.1 mg KOH/g Maximum ASTM D-974
Smoke / Naphthalenes
Smoke Point 25 Minimum ASTM D-1322
OR
Smoke Point 18 Minimum ASTM D-1322
AND
Naphthalenes 3.0 Maximum ASTM D-1840
Target specifications are based on current fungible aviation fuel namely
Colonial 54 Grade Jet Fuel. To the extent the specifications change for
Colonial 54 Grade Jet Fuel the target specifications will be changed
accordingly.
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in HCU 942. That portion is
calculated as follows:
Xxxxx Company Kerosene = Total Kerosene * ( Heavy Gas Oil from AVU 146
to HCU 942 * 21.64 + Heavy Gas Oil from DCU 843 to
HCU 942 * 22.16 ) * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume / ( Heavy Gas Oil from AVU 146
to HCU 942 * 21.64 + Heavy Gas Oil from DCU 843 to
HCU 942 * 22.16 + Light Cycle Oil to HCU 942 *
65.67 )
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
Product Purchase Agreement Page 34 August 3, 1999
EXHIBIT A-22
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
------------------------------------------------------------------------------------
Deemed Quantities Heavy Gas Oil Heavy Gas Oil
(Volume % of Feed Type) Light Cycle Oil from DCU 843 from AVU 146
------------------------------------------------------------------------------------
Kerosene 65.67 22.16 21.64
------------------------------------------------------------------------------------
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report U. S.
-----
Gulf Coast Pipeline posting for spot purchases of Jet/Kero 54 for each
publication day less 1.0 cents/gallon less 0.05 cents/gallon marketing fee
multiplied by the quantity of the Product delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of HCU 942.
Quantity Measurement: Quantity measurements shall be taken at HCU 942 meter
--------------------
FQ-2575. The following meters shall be used as input to the above calculations:
Light Cycle Oil to HCU 942: XX-XXXX
Heavy Gas Oil from DCU 843 to HCU 942: DCU 843 FE-1000
Heavy Gas Oil from AVU 146 & Light Cycle Oil to HCU 942: HCU 942 FQ-1020
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
for each specification.
Product Purchase Agreement Page 35 August 3, 1999
EXHIBIT A-23
Product: Diesel from HCU 942
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
API Gravity 30.0 Minimum ASTM D-1298,
ASTM D-287, or
ASTM D-4052
Corrosion 3 hrs. @ 212 degrees F 1 Maximum ASTM D-130
Viscosity @ 100 degrees F 2.0 cSt Minimum ASTM D-445
Viscosity @ 100 degrees F 3.6 cSt Maximum ASTM D-445
Flash Point 130 degrees F Minimum ASTM D-56
90% 540 degrees F Minimum ASTM D-86
90% 640 degrees F Maximum ASTM D-86
FBP 690 degrees F Maximum ASTM D-86
Color 2.5 Maximum ASTM D-1500
Cloud (September-March) 15 degrees F Maximum ASTM D-2500,
ASTM D-5771,
or
ASTM D-5773
Cloud (April-August) 20 degrees F Maximum ASTM D-2500,
ASTM D-5771,
or
ASTM D-5773
Pour (September-March) 0 degrees F Maximum ASTM D-97,
ASTM D-5949,
or
ASTM D-5950
Pour (April-August) 10 degrees F Maximum ASTM D-97,
ASTM D-5949,
or
ASTM D-5950
Sulfur 0.047 wt% Maximum ASTM D-2622
Cetane Index 42 Minimum ASTM D-976
Ash 0.01 wt% Maximum ASTM D-482
Carbon Residue
(Ramsbottom on 10% Bottom) 0.35 Maximum ASTM D-524
BS&W 0.05 Maximum ASTM D-1796
Haze Rating @ 77 degrees F (Procedure 2) 2 Maximum ASTM D-4176
Thermal Stability
90 Minutes 150 degrees C Pad Rating 7 Maximum Dupont Scale
OR
Oxidation Stability 2.5 mg/100 ml Maximum ASTM D-2274
* Denotes less than
Target specifications are based on current fungible transportation
diesel fuel namely Colonial 74 Grade Low Sulfur Diesel Fuel. To the
extent the specifications change for Colonial 74 Grade Low Sulfur Diesel
Fuel the target specifications will be changed accordingly.
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in HCU 942. That portion is
calculated as follows:
Xxxxx Company Diesel = Total Diesel * ( Heavy Gas Oil from AVU 146 to
HCU
Product Purchase Agreement Page 36 August 3, 1999
EXHIBIT A-23
942 * 12.58 + Heavy Gas Oil from DCU 843 to HCU 942 * 13.11 )
* Xxxxx Company Crude Oil Volume / Total Crude Oil Volume /
( Heavy Gas Oil from AVU 146 to HCU 942 * 12.58 + Heavy Gas
Oil from DCU 843 to HCU 942 * 13.11 + Light Cycle Oil to HCU
942 * 28.84 )
Heavy Gas Oil from AVU 146 to HCU 942 = Heavy Gas Oil from AVU 146 &
Light Cycle Oil to HCU 942 -
Light Cycle Oil to HCU 942
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
--------------------------------------------------------------------------------------
Deemed Quantities Heavy Gas Oil Heavy Gas Oil
(Volume % of Feed Type) Light Cycle Oil from DCU 843 from AVU 146
--------------------------------------------------------------------------------------
Diesel 28.84 13.11 12.58
--------------------------------------------------------------------------------------
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report U. S.
-----
Gulf Coast Pipeline posting for spot purchases of LS No. 2 for each publication
day less 0.05 cents/gallon marketing fee multiplied by the quantity of the
Product delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of HCU 942.
Quantity Measurement: Quantity measurements shall be taken at HCU 942 meter
--------------------
FQ-2500. The following meters shall be used as input to the above calculations:
Light Cycle Oil to HCU 942: XX-XXXX
Heavy Gas Oil from DCU 843 to HCU 942: DCU 843 FE-1000
Heavy Gas Oil from AVU 146 & Light Cycle Oil to HCU 942: HCU 942 FQ-1020
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
for each specification.
Product Purchase Agreement Page 37 August 3, 1999
EXHIBIT A-24
Product: Ultra Low Sulfur Gas Oil from HCU 942
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
Flash Point 165 degrees F Minimum ASTM D-56
Sulfur 0.05 wt% Maximum ASTM D-2622
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in HCU 942. That portion is
calculated as follows:
Xxxxx Company Gas Oil = Total Gas Oil * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume
Deemed quantities for Xxxxx feedstock types that produce this Product will be
developed as needed to accommodate optimization opportunities.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast VGO (Low Sulfur) Cargo for each
publication day multiplied by the quantity of the Product delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of HCU 942.
Quantity Measurement: Quantity measurements shall be taken at HCU 942 meter
--------------------
FQ-2426.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
for flash and sulfur specification.
Product Purchase Agreement Page 38 August 3, 1999
EXHIBIT A-25
Product: Stripper Off Gas from Naphtha Hydrotreater 1344
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
H2S 3.7% Mole Typical UOP-539
Hydrogen 45.2% Mole Typical UOP-539
Nitrogen 0.9% Mole Typical UOP-539
Methane 5.1% Mole Typical UOP-539
Ethane 8.0% Mole Typical UOP-539
Propane 13.7% Mole Typical UOP-539
Isobutane 6.0% Mole Typical UOP-539
Normal Butane 13.8% Mole Typical UOP-539
Pentane and Heavier 3.6% Mole Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of each
--------
component of this Product produced by Xxxxx Company feedstocks in Naphtha
Hydrotreater 1344. That portion for each component is calculated as follows:
H2S
---
Xxxxx Company H2S = Total Contained H2S in Stripper Off-Gas * ( Xxxxx
Naphtha to Naphtha Hydrotreater 1344 * 0.31 + ( Total Unfinished
Naphtha - Excessed Unfinished Naphtha ) * 0.11 ) * Xxxxx Company
Crude Oil Volume / Total Crude Oil Volume / (( Xxxxx Naphtha to
Naphtha Hydrotreater 1344 * 0.31 + ( Total Naphtha Hydrotreater
Feed - Xxxxx Naphtha to Naphtha Hydrotreater 1344 ) * 0.11 )
Where:
Total Contained H2S in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from Naphtha
Hydrotreater 1344 (MSCF/D) * Mole Fraction H2S
* 0.0907 (LB/SCF) * 7,105 (BTU/LB) / 1000 / 6.0
(MMBTU/FOEB)
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146 as
defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU 146
as defined in Exhibit A-3.
Hydrogen
--------
Xxxxx Company Hydrogen = Total Contained Hydrogen in Stripper Off-Gas
* ( Xxxxx Naphtha to Naphtha Hydrotreater 1344 * 0.17 + ( Total
Unfinished Naphtha - Excessed Unfinished Naphtha ) * 1.01 ) *
Xxxxx Company Crude Oil Volume / Total Crude Oil Volume /
(( Xxxxx Naphtha to Naphtha Hydrotreater 1344 * 0.17 + ( Total
Naphtha Hydrotreater Feed - Xxxxx Naphtha to Naphtha
Hydrotreater 1344 ) * 1.01 )
Where:
Total Contained Hydrogen in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from Naphtha
Hydrotreater 1344 (MSCF/D) * Mole Fraction
Hydrogen * 0.0053 (LB/SCF) * 60,950 (BTU/LB) /
1000 / 6.0 (MMBTU/FOEB)
Product Purchase Agreement Page 39 August 3, 1999
EXHIBIT A-25
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146 as
defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU 146
as defined in Exhibit A-3.
Methane
-------
Xxxxx Company Methane = Total Contained Methane in Stripper Off-Gas
* ( Xxxxx Naphtha to Naphtha Hydrotreater 1344 * 0.17 +
( Total Unfinished Naphtha - Excessed Unfinished Naphtha ) *
1.01 ) * Xxxxx Company Crude Oil Volume / Total Crude Oil
Volume / (( Xxxxx Naphtha to Naphtha Hydrotreater 1344 *
0.17 + ( Total Naphtha Hydrotreater Feed - Xxxxx Naphtha to
Naphtha Hydrotreater 1344 ) * 1.01 )
Where:
Total Contained Methane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from Naphtha
Hydrotreater 1344 (MSCF/D) * Mole Fraction
Methane * 0.0425 (LB/SCF) * 23,840 (BTU/LB) /
1000 / 6.0 (MMBTU/FOEB)
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146 as
defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU 146
as defined in Exhibit A-3.
Ethane
------
Xxxxx Company Ethane = Total Contained Ethane in Stripper Off-Gas *
( Xxxxx Naphtha to Naphtha Hydrotreater 1344 * 0.17 +
( Total Unfinished Naphtha - Excessed Unfinished Naphtha ) *
1.01 ) * Xxxxx Company Crude Oil Volume / Total Crude Oil
Volume / (( Xxxxx Naphtha to Naphtha Hydrotreater 1344 *
0.17 + ( Total Naphtha Hydrotreater Feed - Xxxxx Naphtha to
Naphtha Hydrotreater 1344 ) * 1.01 )
Where:
Total Contained Ethane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from Naphtha
Hydrotreater 1344 (MSCF/D) * Mole Fraction
Ethane * 0.0800 (LB/SCF) * 22,169 (BTU/LB) /
1000 / 6.0 (MMBTU/FOEB)
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146 as
defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU 146
as defined in Exhibit A-3.
Propane
-------
Xxxxx Company Propane = Total Contained Propane in Stripper Off-Gas
* ( Xxxxx Naphtha to Naphtha Hydrotreater 1344 * 0.14 +
( Total Unfinished Naphtha - Excessed Unfinished Naphtha ) *
0.00 ) * Xxxxx Company Crude Oil Volume / Total Crude Oil
Volume / (( Xxxxx Naphtha to Naphtha Hydrotreater 1344 *
0.14 + ( Total Naphtha Hydrotreater Feed - Xxxxx Naphtha to
Naphtha Hydrotreater 1344 ) * 0.00 )
Product Purchase Agreement Page 40 August 3, 1999
EXHIBIT A-25
Where:
Total Contained Propane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from Naphtha Hydrotreater
1344 (MSCF/D) * Mole Fraction Propane *
0.1187 (LB/SCF) / 177.7 (LB/BBL) * 1000
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146
as defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU
146 as defined in Exhibit A-3.
Isobutane
---------
Xxxxx Company Isobutane = Total Contained Isobutane in Stripper
Off-Gas * ( Xxxxx Naphtha to Naphtha Hydrotreater 1344 *
0.06 + ( Total Unfinished Naphtha - Excessed Unfinished
Naphtha ) * 0.00 ) * Xxxxx Company Crude Oil Volume / Total
Crude Oil Volume / (( Xxxxx Naphtha to Naphtha Hydrotreater
1344 * 0.06 + ( Total Naphtha Hydrotreater Feed - Xxxxx
Naphtha to Naphtha Hydrotreater 1344 ) * 0.00 )
Where:
Total Contained Isobutane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from Naphtha Hydrotreater
1344 (MSCF/D) * Mole Fraction Isobutane *
0.1582 (LB/SCF) / 197.2 (LB/BBL) * 1000
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146
as defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU
146 as defined in Exhibit A-3.
Normal Butane
-------------
Xxxxx Company Normal Butane = Total Contained Normal Butane in
Stripper Off-Gas * ( Xxxxx Naphtha to Naphtha
Hydrotreater 1344 * 0.12 + ( Total Unfinished
Naphtha -Excessed Unfinished Naphtha ) * 0.00 ) *
Xxxxx Company Crude Oil Volume / Total Crude Oil
Volume / (( Xxxxx Naphtha to Naphtha Hydrotreater 1344
* 0.12 + ( Total Naphtha Hydrotreater Feed - Xxxxx
Naphtha to Naphtha Hydrotreater 1344 ) * 0.00 )
Where:
Total Contained Normal Butane
In Stripper Off-Gas (B/D) = Total Stripper Off-Gas from Naphtha
Hydrotreater 1344 (MSCF/D) * Mole Fraction
Normal Butane * 0.1585 (LB/SCF) / 204.6
(LB/BBL) * 1000
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146 as
defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU 146
as defined in Exhibit A-3.
Product Purchase Agreement Page 41 August 3, 1999
EXHIBIT A-25
Pentane and Heavier
-------------------
Xxxxx Company Pentane
and Heavier = Total Contained Pentane and Heavier in Stripper Off-Gas *
( Xxxxx Naphtha to Naphtha Hydrotreater 1344 *
100.03 + ( Total Unfinished Naphtha - Excessed
Unfinished Naphtha ) * 99.00 ) * Xxxxx Company
Crude Oil Volume / Total Crude Oil Volume /
(( Xxxxx Naphtha to Naphtha Hydrotreater 1344 *
100.03 + ( Total Naphtha Hydrotreater Feed -Xxxxx
Naphtha to Naphtha Hydrotreater 1344 ) * 99.00 )
Where:
Total Contained Pentane
and Heavier In
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from Naphtha Hydrotreater
1344 (MSCF/D) * Mole Fraction Pentane and
Heavier * 0.1980 (LB/SCF) / 221.0 (LB/BBL) *
1000
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
----------------------------------------------------------------------
Deemed Quantities Unfinished
(Volume % of Feed Type) Xxxxx Naphtha Naphtha
----------------------------------------------------------------------
H2S 0.31 0.11
----------------------------------------------------------------------
Hydrogen 0.17 1.01
----------------------------------------------------------------------
Methane 0.17 1.01
----------------------------------------------------------------------
Ethane 0.17 1.01
----------------------------------------------------------------------
Propane 0.14 0.00
----------------------------------------------------------------------
Isobutane 0.06 0.00
----------------------------------------------------------------------
Normal Butane 0.12 0.00
----------------------------------------------------------------------
Pentane & Heavier 100.03 99.00
----------------------------------------------------------------------
Price: For Hydrogen, Methane, and Ethane: The weighted average delivered cost of
-----
natural gas purchased by Xxxxx converted into dollars per FOEB where 6.0 MMBTU
is equivalent to 1.0 FOEB less Fractionation Fee.
For contained Propane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu, Texas Eastern Pipeline posting for spot
purchases of propane for each publication day less 0.10 cents/gallon marketing
fee multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of propane in the delivered Product.
For contained Isobutane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu posting for spot purchases of isobutane for
each publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of isobutane in the delivered Product.
For contained Normal Butane delivered from October through February: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Normal Butane delivered from March through September: The
arithmetic average
Product Purchase Agreement Page 42 August 3, 1999
EXHIBIT A-25
of the high/low Oil Price Information Service Mont Belvieu, Texas Eastern
Pipeline posting for spot purchases of normal butane for each publication day
less 3.0 cents/gallon less 0.10 cents/gallon marketing fee multiplied by the
Inflation Factor less Fractionation Fee multiplied by the quantity of the
Product delivered on that day weighted by the respective volume of normal butane
in the delivered Product.
For contained Pentanes and Heavier: The arithmetic average of the high/low Oil
Price Information Service Mont Belvieu posting for spot purchases of natural
gasoline Non-Dynegy for each publication day less 1.5 cents/gallon less 0.10
cents/gallon marketing fee multiplied by the Inflation Factor less Fractionation
Fee multiplied by the quantity of the Product delivered on that day weighted by
the respective volume of pentanes and heavier in the delivered Product.
For all other contained components: All other components are transferred to
Xxxxx at no cost.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of Naphtha Hydrotreater
1344.
Quantity Measurement: Quantity measurements of the Stripper Off Gas from Naphtha
--------------------
Hydrotreater 1344 shall be taken at CCR 1344 meter FR-864.
The following meters shall be used as input to the above calculations:
Xxxxx Naphtha to Naphtha Hydrotreater 1344: CCR FRC-601
Total Naphtha Hydrotreater Feed: CCR FR-677
Quality Measurement: Grab samples shall be taken at least (3) times per week and
-------------------
analyzed by gas chromatography.
Product Purchase Agreement Page 43 August 3, 1999
EXHIBIT A-26
Product: Treated Naphtha from Naphtha Hydrotreater 1344
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
Sulfur 0.5 ppmw ASTM X-0000
Xxxxxxxx 0.5 ppmw ASTM D-4629
Doctor Negative ASTM D-4952
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in Naphtha Hydrotreater 1344. That
portion is calculated as follows:
Platformer Charge * ( Xxxxx Naphtha to Naphtha Hydrotreater 1344 * 100.03
+ ( Total Unfinished Naphtha - Excessed Unfinished Naphtha ) * 99.00 ) *
Xxxxx Company Crude Oil Volume / Total Crude Oil Volume / (( Xxxxx
Naphtha to Naphtha Hydrotreater 1344 * 100.03 + ( Total Naphtha
Hydrotreater Feed - Xxxxx Naphtha to Naphtha Hydrotreater 1344 ) *
99.00 )
Where:
Total Unfinished Naphtha = The Total Unfinished Naphtha from AVU 146as
defined in Exhibit A-3.
Excessed Unfinished Naphtha = The excessed Unfinished Naphtha from AVU
146 as defined in Exhibit A-3.
The above equations are based on the following deemed quantities. Deemed
quantities for other feedstock types will be developed as needed to accommodate
optimization opportunities.
-------------------------------------------------------------------
Deemed Quantities Unfinished
(Volume % of Feed Type) Xxxxx Naphtha Naphtha
-------------------------------------------------------------------
Pentane & Heavier 100.03 99.00
-------------------------------------------------------------------
Price: The price of Treated Naphtha from Naphtha Hydrotreater 1344 is calculated
-----
as follows:
Treated Naphtha = ( Xxxxx Naphtha to Naphtha Hydrotreater 1344 * 100.03
* ( Price of Untreated Naphtha from DCU 843 + 3.0 cents/
gallon ) + ( Total Unfinished Naphtha - Excessed Unfinished
Naphtha ) * 99.00 * ( Price of Unfinished Naphtha + 1.5
cents/gallon ) ) / ( Xxxxx Naphtha to Naphtha Hydrotreater
1344 * 100.03 + ( Total Unfinished Naphtha - Excessed
Unfinished Naphtha ) * 99.00 )
Where:
Price of Untreated Naphtha from DCU 843 = The price as described in
Exhibit A-13.
Price of Unfinished Naphtha = The price as described in Exhibit A-3.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of Naphtha Hydrotreater
1344.
Quantity Measurement: The following meters shall be used as input to the above
--------------------
calculations:
Xxxxx Naphtha to Naphtha Hydrotreater 1344: CCR FRC-601
Product Purchase Agreement Page 44 August 3, 1999
EXHIBIT A-26
Total Naphtha Hydrotreater Feed: CCR FR-677
Platformer Charge CCR FR-863
Quality Measurement: Grab samples shall be taken at least (3) times per week and
-------------------
analyzed by sulfur, nitrogen, and doctor test.
Product Purchase Agreement Page 45 August 3, 1999
EXHIBIT A-27
Product: Stripper Off Gas from GFU 241 in Kerosene or Diesel Service
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
H2S 13.58% Mole Typical UOP-539
Water 0.41% Mole Typical UOP-539
Hydrogen 28.81% Mole Typical UOP-539
Methane 13.99% Mole Typical UOP-539
Ethane 14.81% Mole Typical UOP-539
Propane 14.81% Mole Typical UOP-539
Isobutane 5.35% Mole Typical UOP-539
Normal Butane 3.70% Mole Typical UOP-539
Pentane and Heavier 4.12% Mole Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of each
--------
component of this Product produced by Xxxxx Company feedstocks in GFU 241. That
portion for each component is calculated as follows:
H2S
---
Xxxxx Company H2S = Total Contained H2S in Stripper Off-Gas * Total Feed
to GFU 241 * Xxxxx Company Crude Oil Volume / Total Crude Oil
Volume
Where:
Total Contained H2S in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 241
(MSCF/D) * Mole Fraction H2S * 0.0907 (LB/SCF)
* 7,105 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Hydrogen
--------
Xxxxx Company Hydrogen = Total Contained Hydrogen in Stripper Off-Gas
* Total Feed to GFU 241 * Xxxxx Company Crude Oil Volume / Total
Crude Oil Volume
Where:
Total Contained Hydrogen in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 241 (MSCF/D)
* Mole Fraction Hydrogen * 0.0053 (LB/SCF) *
60,950 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Methane
-------
Xxxxx Company Methane = Total Contained Methane in Stripper Off-Gas
* Total Feed to GFU 241 * Xxxxx Company Crude Oil Volume / Total
Crude Oil Volume
Where:
Total Contained Methane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 241 (MSCF/D)
* Mole Fraction Methane * 0.0425 (LB/SCF) *
23,840 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Ethane
------
Product Purchase Agreement Page 46 August 3, 1999
EXHIBIT A-27
Xxxxx Company Ethane = Total Contained Ethane in Stripper Off-Gas * Total
Feed to GFU 241 * Xxxxx Company Crude Oil Volume / Total Crude
Oil Volume
Where:
Total Contained Ethane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 241 (MSCF/D)
* Mole Fraction Ethane * 0.0800 (LB/SCF) *
22,169 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Propane
-------
Xxxxx Company Propane = Total Contained Propane in Stripper Off-Gas
* Total Feed to GFU 241 * Xxxxx Company Crude Oil Volume / Total
Crude Oil Volume
Where:
Total Contained Propane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 241 (MSCF/D) *
Mole Fraction Propane * 0.1187 (LB/SCF) / 177.7 (LB/BBL) *
1000
Isobutane
---------
Xxxxx Company Isobutane = Total Contained Isobutane in Stripper Off-
Gas * Total Feed to GFU 241 * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume
Where:
Total Contained Isobutane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 241 (MSCF/D)
* Mole Fraction Isobutane * 0.1582 (LB/SCF) /
197.2 (LB/BBL) * 1000
Normal Butane
-------------
Xxxxx Company Normal Butane = Total Contained Normal Butane in Stripper
Off-Gas * Total Feed to GFU 241 * Xxxxx Company Crude Oil
Volume / Total Crude Oil Volume
Where:
Total Contained Normal Butane
In Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 241 (MSCF/D)
* Mole Fraction Normal Butane * 0.1585
(LB/SCF) / 204.6 (LB/BBL) * 1000
Pentane and Heavier
-------------------
Xxxxx Company Pentane
and Heavier = Total Contained Pentane and Heavier in Stripper Off-Gas *
Total Feed to GFU 241 * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume
Where:
Total Contained Pentane
and Heavier In
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 241 (MSCF/D) *
Mole Fraction Pentane and Heavier * 0.1980
(LB/SCF) / 221.0 (LB/BBL) * 1000
Product Purchase Agreement Page 47 August 3, 1999
EXHIBIT A-27
Price: For Hydrogen, Methane, and Ethane: The weighted average delivered cost
-----
of natural gas purchased by Xxxxx converted into dollars per FOEB where 6.0
MMBTU is equivalent to 1.0 FOEB less 0.84 dollars/FOEB.
For contained Propane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu, Texas Eastern Pipeline posting for spot
purchases of propane for each publication day less 0.10 cents/gallon marketing
fee multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of propane in the delivered Product.
For contained Isobutane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu posting for spot purchases of isobutane for
each publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of isobutane in the delivered Product.
For contained Normal Butane delivered from October through February: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Normal Butane delivered from March through September: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day less 3.0 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Pentanes and Heavier: The arithmetic average of the high/low Oil
Price Information Service Mont Belvieu posting for spot purchases of natural
gasoline Non-Dynegy for each publication day less 1.5 cents/gallon less 0.10
cents/gallon marketing fee multiplied by the Inflation Factor less Fractionation
Fee multiplied by the quantity of the Product delivered on that day weighted by
the respective volume of pentanes and heavier in the delivered Product.
For all other contained components: All other components are transferred to
Xxxxx at no cost.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss
Product Purchase Agreement Page 48 August 3, 1999
EXHIBIT A-27
shall pass at the battery limits of GFU 241.
Quantity Measurement: Quantity measurements shall be taken at GFU 241 meter
--------------------
FI-104.
Quality Measurement: Grab samples shall be taken and analyzed by xxxxxxx and at
--------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 49 August 3, 1999
EXHIBIT A-28
Product: High Pressure Purge Gas from GFU 241
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
H2S 80 ppmw Maximum Draeger
Higher Heating Value 650 BTU/SCF Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Xxxxx Company Share (FOEB/D) = Total High Pressure Purge Gas from GFU 241
(MSCF/D) * Higher Heating Value (BTU/SCF) / 1000 / 6.0
(MMBTU/FOEB)
Price: The weighted average delivered cost of natural gas purchased by Xxxxx
------
converted into dollars per FOEB where 6.0 MMBTU is equivalent to 1.0 FOEB.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 241.
Quantity Measurement: Product quantity measurements shall be taken at GFU 241
--------------------
XX-XXXX.
Quality Measurement: Grab samples shall be taken and analyzed by xxxxxxx and at
--------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 50 August 3, 1999
EXHIBIT A-29
Product: Naphtha from GFU 241 in Kerosene or Diesel Service
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
FBP 390 degrees F Maximum ASTM D-86
N+A 60.0% LV Typical ASTM D-5134 - Modified to C-15
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast Naphtha (Domestic 40 N+A) for
each publication day less 0.15 cents/gallon/N+A number below 40 N+A plus 0.15
cents/gallon/N+A number above 40 N+A less 1.0 cents/gallon less Fractionation
Fee.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 241.
Quantity Measurement: Quantity measurements shall be taken at GFU 241 meter
--------------------
FRCA-110.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
by gas chromatography and distillation.
Product Purchase Agreement Page 51 August 3, 1999
EXHIBIT A-30
Product: Kerosene from GFU 241 in Kerosene Service
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
API Gravity 37.0 Minimum ASTM D-1298,
ASTM D-287, or
ASTM D-4052
API Gravity 51.0 Maximum ASTM D-1298,
ASTM D-287, or
ASTM D-4052
Corrosion 2 hrs. @212 F 1 Maximum ASTM D-130
MSEP 85 Minimum ASTM D-3948
Water Reaction Interface Rating 1b Maximum ASTM D-1094
Freezing Point -40 C Maximum ASTM D-2386
or
ASTM D-5972
Viscosity @ -4 F 8.0 cSt Maximum ASTM D-445
Flash Point 108 F Minimum ASTM D-56
10% 400 F Maximum ASTM D-86
FBP 572 F Maximum ASTM D-86
Residue, % 1.5 Maximum ASTM D-86
Loss, % 1.5 Maximum ASTM D-86
Existent Gum 7 mg/100 ml Maximum ASTM D-381
Thermal Stability Pressure Drop 25 mm/Hg Maximum ASTM D-3241
Thermal Stability Tube Deposit 3 Code Maximum ASTM D-3241
Sulfur 0.30 wt% Maximum ASTM D-2622
Doctor Negative ASTM D-4952
Aromatics 25 vol% Maximum ASTM D-1319
Neutralization Number 0.1 mg KOH/g Maximum ASTM D-974
Smoke / Naphthalenes
Smoke Point 25 Minimum ASTM D-1322
OR
Smoke Point 18 Minimum ASTM D-1322
AND
Naphthalenes 3.0 Maximum ASTM D-1840
Target specifications are based on current fungible aviation fuel namely
Colonial 54 Grade Jet Fuel. To the extent the specifications change for
Colonial 54 Grade Jet Fuel the target specifications will be changed
accordingly.
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report
-----
U.S. Gulf Coast Pipeline posting for spot purchases of Jet/Kero 54 for each
publication less 0.05 cents/gallon marketing fee multiplied by the quantity of
the Product delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss
Product Purchase Agreement Page 52 August 3, 1999
EXHIBIT A-30
shall pass at the battery limits of GFU 241.
Quantity Measurement: Quantity measurements shall be taken at GFU 241 meter
--------------------
FRA-105.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
-------------------
for each specification.
Product Purchase Agreement Page 53 August 3, 1999
EXHIBIT A-31
Product: Diesel from GFU 241 in Diesel Service
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
Corrosion 3 hrs. @212 degrees F 1 Maximum ASTM D-130
Viscosity @ 100 degrees F 2.0 cSt Minimum
Viscosity @ 100 degrees F 3.6 cSt Maximum ASTM D-445
Flash Point 130 degrees F Minimum ASTM D-56
90% 540 degrees F Minimum ASTM D-86
90% 640 degrees F Maximum ASTM D-86
FBP 690 degrees F Maximum ASTM D-86
Color 2.5 Maximum ASTM D-1500
Sulfur 0.047 wt% Maximum ASTM D-2622
Ash 0.01 wt% Maximum ASTM D-482
Carbon Residue
(Ramsbottom on 10% Bottom) 0.35 Maximum ASTM D-524
BS&W Less than 0.5 Maximum ASTM D-1796
Haze Rating @77 degrees F (Procedure 2) 2 Maximum ASTM D-4176
Thermal Stability
90 Minutes 150 degrees C Pad Rating 7 Maximum Dupont Scale
OR
Oxidation Stability 2.5 mg/100 ml Maximum ASTM D-2274
Target specifications are based on current fungible transportation diesel
fuel namely Colonial 74 Grade Low Sulfur Diesel Fuel. To the extent the
specifications change for Colonial 74 Grade Low Sulfur Diesel Fuel the
target specifications will be changed accordingly.
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product. The Xxxxx Company Share is defined
as the output of this product multiplied by the Xxxxx Company Crude Oil Volume
divided by the Total Crude Oil Volume.
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report
-----
U.S. Gulf Coast Pipeline posting for spot purchases of LS No. 2 for each
publication day less 0.05 cents/gallon marketing fee multiplied by the quantity
of the Product delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 241.
Quantity Measurement: Quantity measurements shall be taken at GFU 241 meter
--------------------
FRA-105.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
--------------------
for each specification.
Product Purchase Agreement Page 54 August 3, 1999
EXHIBIT A-32
Product: Stripper Off Gas from GFU 242
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
H2S 9.52% Mole Typical UOP-539
Water 0.95% Mole Typical UOP-539
Hydrogen 44.76% Mole Typical UOP-539
Methane 16.67% Mole Typical UOP-539
Ethane 12.86% Mole Typical UOP-539
Propane 7.62% Mole Typical UOP-539
Isobutane 1.90% Mole Typical UOP-539
Normal Butane 1.43% Mole Typical UOP-539
Pentane and Heavier 4.29% Mole Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of each
--------
component of this Product produced by Xxxxx Company Feedstock in GFU 242. Xxxxx
Company Feedstock in GFU 242 is defined as the Total Feed to GFU 242 less the
Unfinished Jet from AVU 146 drawn from inventory as defined in Exhibit A-4
multiplied by the Xxxxx Company Crude Oil Volume divided by the Total Crude Oil
Volume. The portion of each component of this Product produced by Xxxxx Company
feedstock in GFU 242 is calculated as follows:
H2S
---
Xxxxx Company H2S = Total Contained H2S in Stripper Off-Gas * Xxxxx
Company Feedstock in GFU 242
Where:
Total Contained H2S in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 242
(MSCF/D) * Mole Fraction H2S * 0.0907 (LB/SCF)
* 7,105 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Hydrogen
Xxxxx Company Hydrogen = Total Contained Hydrogen in Stripper Off-Gas
* Xxxxx Company Feedstock in GFU 242
Where:
Total Contained Hydrogen in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 242 (MSCF/D)
* Mole Fraction Hydrogen * 0.0053 (LB/SCF) *
60,950 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Methane
-------
Xxxxx Company Methane = Total Contained Methane in Stripper Off-Gas
* Xxxxx Company Feedstock in GFU 242
Where:
Total Contained Methane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 242 (MSCF/D)
* Mole Fraction Methane * 0.0425 (LB/SCF) *
23,840 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Product Purchase Agreement Page 55 August 3, 1999
EXHIBIT A-32
Ethane
------
Xxxxx Company Ethane = Total Contained Ethane in Stripper Off-Gas
* Xxxxx Company Feedstock in GFU 242
Where:
Total Contained Ethane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 242 (MSCF/D)
* Mole Fraction Ethane * 0.0800 (LB/SCF) *
22,169 (BTU/LB) / 1000 / 6.0 (MMBTU/FOEB)
Propane
-------
Xxxxx Company Propane = Total Contained Propane in Stripper Off-Gas
* Xxxxx Company Feedstock in GFU 242
Where:
Total Contained Propane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 242 (MSCF/D)
* Mole Fraction Propane * 0.1187 (LB/SCF) /
177.7 (LB/BBL) * 1000
Isobutane
---------
Xxxxx Company Isobutane = Total Contained Isobutane in Stripper
Off-Gas * Xxxxx Company Feedstock in GFU 242
Where:
Total Contained Isobutane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 242 (MSCF/D)
* Mole Fraction Isobutane * 0.1582 (LB/SCF) /
197.2 (LB/BBL) * 1000
Normal Butane
-------------
Xxxxx Company Normal Butane = Total Contained Normal Butane in Stripper
Off-Gas * Xxxxx Company Feedstock in GFU 242
Where:
Total Contained Normal Butane
In Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 242 (MSCF/D)
* Mole Fraction Normal Butane * 0.1585
(LB/SCF) / 204.6 (LB/BBL) * 1000
Pentane and Heavier
-------------------
Xxxxx Company Pentane
and Heavier = Total Contained Pentane and Heavier in Stripper
Off-Gas * Xxxxx Company Feedstock in GFU 242
Where:
Total Contained Pentane
and Heavier In
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 242 (MSCF/D)
* Mole Fraction Pentane and Heavier * 0.1980
(LB/SCF) / 221.0 (LB/BBL) * 1000
Product Purchase Agreement Page 56 August 3, 1999
EXHIBIT A-32
Price: For Hydrogen, Methane, and Ethane: The weighted average delivered cost
-----
of natural gas purchased by Xxxxx converted into dollars per FOEB where 6.0
MMBTU is equivalent to 1.0 FOEB less Fractionation Fee.
For contained Propane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu, Texas Eastern Pipeline posting for spot
purchases of propane for each publication day less 0.10 cents/gallon marketing
fee multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of propane in the delivered Product.
For contained Isobutane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu posting for spot purchases of isobutane for
each publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of isobutane in the delivered Product.
For contained Normal Butane delivered from October through February: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Normal Butane delivered from March through September: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day less 3.0 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Pentanes and Heavier: The arithmetic average of the high/low Oil
Price Information Service Mont Belvieu posting for spot purchases of natural
gasoline Non-Dynegy for each publication day less 1.5 cents/gallon less 0.10
cents/gallon marketing fee multiplied by the Inflation Factor less Fractionation
Fee multiplied by the quantity of the Product delivered on that day weighted by
the respective volume of pentanes and heavier in the delivered Product.
For all other contained components: All other components are transferred to
Xxxxx at no cost.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 242.
Quantity Measurement: Quantity measurements shall be taken at GFU 242 meter
--------------------
FI-204.
Product Purchase Agreement Page 57 August 3, 1999
EXHIBIT A-32
Quality Measurement: Grab samples shall be taken and analyzed by draeger and at
-------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 58 August 3, 1999
EXHIBIT A-33
Product: High Pressure Purge Gas from GFU 242
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- ----------
H2S 80 ppmw Maximum Draeger
Higher Heating Value 650 BTU/SCF Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product produced by Xxxxx Company Feedstock
in GFU 242. Xxxxx Company Feedstock in GFU 242 is defined as the Total Feed to
GFU 242 less the Unfinished Jet from AVU 146 drawn from inventory as defined in
Exhibit A-4 multiplied by the Xxxxx Company Crude Oil Volume divided by the
Total Crude Oil Volume.
Xxxxx Company Share (FOEB/D) = Total High Pressure Purge Gas from GFU 242
(MSCF/D) * Higher Heating Value (BTU/SCF) / 1000 / 6.0
(MMBTU/FOEB)
Price: The weighted average delivered cost of natural gas purchased by Xxxxx
------
converted into dollars per FOEB where 6.0 MMBTU is equivalent to 1.0 FOEB.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 242.
Quantity Measurement: Product quantity measurements shall be taken at GFU 242
--------------------
XX-XXXX.
Quality Measurement: Grab samples shall be taken and analyzed by draeger and at
-------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 59 August 3, 1999
EXHIBIT A-34
Product: Naphtha from GFU 242
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
FBP 390 F Maximum ASTM D-86
N+A 60.0% LV Typical ASTM D-5134 - Modified to C-15
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product produced by Xxxxx Company Feedstock
in GFU 242. Xxxxx Company Feedstock in GFU 242 is defined as the Total Feed to
GFU 242 less the Unfinished Jet from AVU 146 drawn from inventory as defined in
Exhibit A-4 multiplied by the Xxxxx Company Crude Oil Volume divided by the
Total Crude Oil Volume.
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast Naphtha (Domestic 40 N+A) for
each publication day less 0.15 cents/gallon/N+A number below 40 N+A plus 0.15
cents/gallon/N+A number above 40 N+A less 1.0 cents/gallon less Fractionation
Fee.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 242.
Quantity Measurement: Quantity measurements shall be taken at GFU 242 meter
--------------------
FRCA-210.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
--------------------
by gas chromatography and distillation.
Product Purchase Agreement Page 60 August 3, 1999
EXHIBIT A-35
Product: Kerosene from GFU 242
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
API Gravity 37.0 Minimum ASTM D-1298,
ASTM D-287, or
ASTM D-4052
API Gravity 51.0 Maximum ASTM D-1298,
ASTM D-287, or
ASTM D-4052
Corrosion 2 hrs. @212 F 1 Maximum ASTM D-130
MSEP 85 Minimum ASTM D-3948
Water Reaction Interface Rating 1b Maximum ASTM D-1094
Freezing Point -40 C Maximum ASTM D-2386
or
ASTM D-5972
Viscosity @ -4 degrees F 8.0 cSt Maximum ASTM D-445
Flash Point 108 F Minimum ASTM D-56
10% 400 F Maximum ASTM D-86
FBP 572 F Maximum ASTM D-86
Residue, % 1.5 Maximum ASTM D-86
Loss, % 1.5 Maximum ASTM D-86
Existent Gum 7 mg/100 ml Maximum ASTM D-381
Thermal Stability Pressure Drop 25 mm/Hg Maximum ASTM D-3241
Thermal Stability Tube Deposit 3 Code Maximum ASTM D-3241
Sulfur 0.30 wt% Maximum ASTM D-2622
Doctor Negative ASTM D-4952
Aromatics 25 vol% Maximum ASTM D-1319
Neutralization Number 0.1 mg KOH/g Maximum ASTM D-974
Smoke / Naphthalenes
Smoke Point 25 Minimum ASTM D-1322
OR
Smoke Point 18 Minimum ASTM D-1322
AND
Naphthalenes 3.0 Maximum ASTM D-1840
Target specifications are based on current fungible aviation fuel namely
Colonial 54 Grade Jet Fuel. To the extent the specifications change for
Colonial 54 Grade Jet Fuel the target specifications will be changed
accordingly.
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the "Xxxxx Company
--------
Share" of the total output of this Product produced by Xxxxx Company Feedstock
in GFU 242. Xxxxx Company Feedstock in GFU 242 is defined as the Total Feed to
GFU 242 less the Unfinished Jet from AVU 146 drawn from inventory as defined in
Exhibit A-4 multiplied by the Xxxxx Company Crude Oil Volume divided by the
Total Crude Oil Volume.
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report U.
-----
S. Gulf Coast Pipeline posting for spot purchases of Jet/Kero 54 for each
publication less 0.05 cents/gallon marketing fee multiplied by the quantity of
the Product delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Product Purchase Agreement Page 61 August 3, 1999
EXHIBIT X-00
Xxxxxxxx Xxxxx/Xxxx of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 242.
Quantity Measurement: Quantity measurements shall be taken at GFU 242 meter
--------------------
FRA-205.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
--------------------
for each specification.
Product Purchase Agreement Page 62 August 3, 1999
EXHIBIT A-36
Product: Stripper Off Gas from GFU 243
-------
Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
H2S 15.21% Mole Typical UOP-539
Water 5.16% Mole Typical UOP-539
Hydrogen 11.24% Mole Typical UOP-539
Methane 7.75% Mole Typical UOP-539
Ethane 18.13% Mole Typical UOP-539
Propane 23.05% Mole Typical UOP-539
Isobutane 7.99% Mole Typical UOP-539
Normal Butane 9.13% Mole Typical UOP-539
Pentane and Heavier 2.32% Mole Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of each
--------
component of this Product produced by Xxxxx Company feedstocks in GFU 243. That
portion for each component is calculated as follows:
H2S
---
Xxxxx Company H2S = Total Contained H2S in Stripper Off-Gas *
((Total volume of Diesel from AVU 146 - Diesel charge volume
to GFU 241 + Total volume of Light Gas Oil from DCU 843) *
Xxxxx Company Crude Oil Volume / Total Crude Oil Volume -
Xxxxx Company Share of the Excessed Unfinished Diesel) /
Total charge volume to GFU 243
Where:
Total Contained H2S in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 243
(MSCF/D) * Mole Fraction H2S * 0.0907
(LB/SCF) * 7,105 (BTU/LB) / 1000 / 6.0
(MMBTU/FOEB)
Excessed Unfinished Diesel = The volume of Unfinished Diesel as
defined in Exhibit A-5
Hydrogen
--------
Xxxxx Company Hydrogen = Total Contained Hydrogen in Stripper Off-Gas
* ((Total volume of Diesel from AVU 146 - Diesel
charge volume to GFU 241 + Total volume of Light Gas
Oil from DCU 843 ) * Xxxxx Company Crude Oil Volume
/ Total Crude Oil Volume - Xxxxx Company Share of
the Excessed Unfinished Diesel) / Total charge
volume to GFU 243
Where:
Total Contained Hydrogen in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 243
(MSCF/D) * Mole Fraction Hydrogen * 0.0053
(LB/SCF) * 60,950 (BTU/LB) / 1000 / 6.0
(MMBTU/FOEB)
Excessed Unfinished Diesel = The volume of Unfinished Diesel as
defined in Exhibit A-5
Methane
-------
Product Purchase Agreement Page 63 August 3, 1999
EXHIBIT A-36
Xxxxx Company Methane = Total Contained Methane in Stripper Off-
Gas * ((Total volume of Diesel from AVU 146 - Diesel
charge volume to GFU 241 + Total volume of Light Gas
Oil from DCU 843) * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume - Xxxxx Company Share of the
Excessed Unfinished Diesel) / Total charge volume to
GFU 243
Where:
Total Contained Methane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 243
(MSCF/D) * Mole Fraction Methane * 0.0425
(LB/SCF) * 23,840 (BTU/LB) / 1000 / 6.0
(MMBTU/FOEB)
Excessed Unfinished Diesel = The volume of Unfinished Diesel as
defined in Exhibit A-5
Ethane
------
Xxxxx Company Ethane = Total Contained Ethane in Stripper Off-
Gas * ((Total volume of Diesel from AVU 146 - Diesel
charge volume to GFU 241 + Total volume of Light Gas
Oil from DCU 843 ) * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume - Xxxxx Company Share of the
Excessed Unfinished Diesel) / Total charge volume to
GFU 243
Where:
Total Contained Ethane in
Stripper Off-Gas (FOEB/D) = Total Stripper Off-Gas from GFU 243
(MSCF/D) * Mole Fraction Ethane * 0.0800
(LB/SCF) * 22,169 (BTU/LB) / 1000 / 6.0
(MMBTU/FOEB)
Excessed Unfinished Diesel = The volume of Unfinished Diesel as
defined in Exhibit A-5
Propane
-------
Xxxxx Company Propane = Total Contained Propane in Stripper Off-
Gas * ((Total volume of Diesel from AVU 146 - Diesel
charge volume to GFU 241 + Total volume of Light Gas
Oil from DCU 843 ) * Xxxxx Company Crude Oil Volume /
Total Crude Oil Volume - Xxxxx Company Share of the
Excessed Unfinished Diesel) / Total charge volume to
GFU 243
Where:
Total Contained Propane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 243 (MSCF/D)
* Mole Fraction Propane * 0.1187 (LB/SCF) /
177.7 (LB/BBL) * 1000
Excessed Unfinished Diesel = The volume of Unfinished Diesel as
defined in Exhibit A-5
Isobutane
---------
Xxxxx Company Isobutane = Total Contained Isobutane in Stripper
Off-Gas * ((Total volume of Diesel from AVU 146 -
Diesel charge volume to GFU 241 + Total volume of Light
Gas Oil from DCU 843 ) * Xxxxx Company Crude Oil Volume
/ Total Crude Oil Volume - Xxxxx Company Share of the
Excessed Unfinished Diesel) / Total charge volume to
GFU 243
Product Purchase Agreement Page 64 August 3, 1999
EXHIBIT A-36
Where:
Total Contained Isobutane in
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 243 (MSCF/D) *
Mole Fraction Isobutane * 0.1582 (LB/SCF) / 197.2
(LB/BBL) * 1000
Excessed Unfinished Diesel = The volume of Unfinished Diesel as defined
in Exhibit A-5
Normal Butane
-------------
Xxxxx Company Normal Butane = Total Contained Normal Butane in
Stripper Off-Gas * ((Total volume of Diesel from
AVU 146 - Diesel charge volume to GFU 241 + Total
volume of Light Gas Oil from DCU 843 ) * Xxxxx
Company Crude Oil Volume / Total Crude Oil Volume -
Xxxxx Company Share of the Excessed Unfinished
Diesel) / Total charge volume to GFU 243
Where:
Total Contained Normal Butane
In Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 243 (MSCF/D)
* Mole Fraction Normal Butane * 0.1585 (LB/SCF)
/ 204.6 (LB/BBL) * 1000
Excessed Unfinished Diesel = The volume of Unfinished Diesel as defined
in Exhibit A-5
Pentane and Heavier
-------------------
Xxxxx Company Pentane
and Heavier = Total Contained Pentane and Heavier in Stripper Off-Gas *
((Total volume of Diesel from AVU 146 -Diesel charge
volume to GFU 241 + Total volume of Light Gas Oil from DCU
843 ) * Xxxxx Company Crude Oil Volume / Total Crude Oil
Volume - Xxxxx Company Share of the Excessed Unfinished
Diesel) / Total charge volume to GFU 243
Where:
Total Contained Pentane
and Heavier In
Stripper Off-Gas (B/D) = Total Stripper Off-Gas from GFU 243 (MSCF/D) *
Mole Fraction Pentane and Heavier * 0.1980
(LB/SCF) / 221.0 (LB/BBL) * 1000
Excessed Unfinished Diesel = The volume of Unfinished Diesel as defined in
Exhibit A-5
Price: For Hydrogen, Methane, and Ethane: The weighted average delivered cost
-----
of natural gas purchased by Xxxxx converted into dollars per FOEB where 6.0
MMBTU is equivalent to 1.0 FOEB less Fractionation Fee.
For contained Propane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu, Texas Eastern Pipeline posting for spot
purchases of propane for each publication day less 0.10 cents/gallon marketing
fee multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of propane in the delivered Product.
Product Purchase Agreement Page 65 August 3, 1999
EXHIBIT A-36
For contained Isobutane: The arithmetic average of the high/low Oil Price
Information Service Mont Belvieu posting for spot purchases of isobutane for
each publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of isobutane in the delivered Product.
For contained Normal Butane delivered from October through February: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day plus 1.25 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Normal Butane delivered from March through September: The
arithmetic average of the high/low Oil Price Information Service Mont Belvieu,
Texas Eastern Pipeline posting for spot purchases of normal butane for each
publication day less 3.0 cents/gallon less 0.10 cents/gallon marketing fee
multiplied by the Inflation Factor less Fractionation Fee multiplied by the
quantity of the Product delivered on that day weighted by the respective volume
of normal butane in the delivered Product.
For contained Pentanes and Heavier: The arithmetic average of the high/low Oil
Price Information Service Mont Belvieu posting for spot purchases of natural
gasoline Non-Dynegy for each publication day less 1.5 cents/gallon less 0.10
cents/gallon marketing fee multiplied by the Inflation Factor less Fractionation
Fee multiplied by the quantity of the Product delivered on that day weighted by
the respective volume of pentanes and heavier in the delivered Product.
For all other contained components: All other components are transferred to
Xxxxx at no cost.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 243.
Quantity Measurement: Product quantity measurements shall be taken at GFU 243
--------------------
meter FI-160. Total charge volume to GFU 243 shall be taken at GFU 243 meter
FIC-102.
Quality Measurement: Grab samples shall be taken and analyzed by draeger and at
--------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 66 August 3, 1999
EXHIBIT A-37
Product: Low Pressure Purge Gas from GFU 243
-------
Target Specification:
-----------------------
Property Specification Test Method
-------- ------------- -----------
H2S 80 ppmw Maximum Draeger
Higher Heating Value 750 BTU/SCF Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in GFU 243. That portion is
calculated as follows:
Xxxxx Company Portion = Total Low Pressure Purge Gas * ((Total volume of
Diesel from AVU 146 - Diesel charge volume to GFU 241 +
Total volume of Light Gas Oil from DCU 843 ) * Xxxxx Company
Crude Oil Volume / Total Crude Oil Volume - Xxxxx Company
Share of the Excessed Unfinished Diesel) / Total charge
volume to GFU 243
Where:
Total Low Pressure
Purge Gas (FOEB/D) = Total Low Pressure Purge Gas from GFU
243 (MSCF/D) * Higher Heating Value (BTU/SCF) / 1000 /
6.0 (MMBTU/FOEB)
Excessed Unfinished Diesel = The volume of Unfinished Diesel as defined in
Exhibit A-5
Price: The weighted average delivered cost of natural gas purchased by Xxxxx
------
converted into dollars per FOEB where 6.0 MMBTU is equivalent to 1.0 FOEB.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 243.
Quantity Measurement: Product quantity measurements shall be taken at GFU 243
--------------------
meter FIC-117. Total charge volume to GFU 243 shall be taken at GFU 243 meter
FIC-102.
Quality Measurement: Grab samples shall be taken and analyzed by draeger and at
--------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 67 August 3, 1999
EXHIBIT A-38
Product: High Pressure Purge Gas from GFU 243
-------
Target Specification:
-----------------------
Property Specification Test Method
-------- ------------- -----------
H2S 80 ppmw Maximum Draeger
Higher Heating Value 650 BTU/SCF Typical UOP-539
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in GFU 243. That portion is
calculated as follows:
Xxxxx Company Portion = Total High Pressure Purge Gas * ((Total
volume of Diesel from AVU 146 - Diesel charge volume to GFU
241 + Total volume of Light Gas Oil from DCU 843) * Xxxxx
Company Crude Oil Volume / Total Crude Oil Volume - Xxxxx
Company Share of the Excessed Unfinished Diesel) / Total
charge volume to GFU 243
Where:
Total High Pressure
Purge Gas (FOEB/D) = Total High Pressure Purge Gas from GFU
243 (MSCF/D) * Higher Heating Value (BTU/SCF) / 1000
/ 6.0 (MMBTU/FOEB)
Excessed Unfinished Diesel = The volume of Unfinished Diesel as defined
in Exhibit A-5
Price: The weighted average delivered cost of natural gas purchased by Xxxxx
------
converted into dollars per FOEB where 6.0 MMBTU is equivalent to 1.0 FOEB.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 243.
Quantity Measurement: Product quantity measurements shall be taken at GFU 243
--------------------
meter FIC-110. Total charge volume to GFU 243 shall be taken at GFU 243 meter
FIC-102.
Quality Measurement: Grab samples shall be taken and analyzed by draeger and at
--------------------
least (3) times per week and analyzed by gas chromatography.
Product Purchase Agreement Page 68 August 3, 1999
EXHIBIT A-39
Product: Naphtha from GFU 243
-------
Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
FBP 390 F Maximum ASTM D-86
N+A 60.0% LV Typical ASTM D-5134 - Modified to C-15
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in GFU 243. That portion is
calculated as follows:
Xxxxx Company Portion = Total Naphtha from GFU 243 * ((Total volume
of Diesel from AVU 146 - Diesel charge volume to GFU 241 +
Total volume of Light Gas Oil from DCU 843) * Xxxxx Company
Crude Oil Volume / Total Crude Oil Volume - Xxxxx Company
Share of the Excessed Unfinished Diesel) / Total charge
volume to GFU 243
Where:
Excessed Unfinished Diesel = The volume of Unfinished Diesel as defined in
Exhibit A-5
Price: The arithmetic average of the high/low Oil Price Information Service
-----
posting for spot purchases of U. S. Gulf Coast Naphtha (Domestic 40 N+A) for
each publication day less 0.15 cents/gallon/N+A number below 40 N+A plus 0.15
cents/gallon/N+A number above 40 N+A less 1.0 cents/gallon less Fractionation
Fee.
The Fractionation Fee is calculated as the sum of a variable and fixed fee
component as follows:
Fractionation Fee = Base Variable Fee * Current Natural Gas / 2.236 +
Fixed Variable Fee * (1.02) (N-1998)
Where:
Base Variable Fee = 0.627 dollars per barrel
Current Natural Gas = The weighted average delivered cost of natural gas
purchased by Xxxxx converted into dollars per MMBTU.
Fixed Variable Fee = 0.344 dollars per barrel
N = Current 4 digit year (i.e. 2002)
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 243.
Quantity Measurement: Product quantity measurements shall be taken at GFU 243
--------------------
meter FIC-115. Total charge volume to GFU 243 shall be taken at GFU 243 meter
FIC-102.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
--------------------
by gas chromatography and distillation.
Product Purchase Agreement Page 69 August 3, 1999
EXHIBIT A-40
Product: Diesel from GFU 243
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Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
Corrosion 3 hrs. @212 degrees F 1 Maximum ASTM D-130
Viscosity @ 100 degrees F 2.0 cSt Minimum ASTM D-445
Viscosity @ 100 degrees F 3.6 cSt Maximum ASTM D-445
Flash Point 130 degrees F Minimum ASTM D-56
90% 540 degrees F Minimum ASTM D-86
90% 640 degrees F Maximum ASTM D-86
FBP 690 degrees F Maximum ASTM D-86
Color 2.5 Maximum ASTM D-1500
Sulfur 0.047 wt% Maximum ASTM D-2622
Ash 0.01 wt% Maximum ASTM D-482
Carbon Residue
(Ramsbottom on 10% Bottom) 0.35 Maximum ASTM D-524
BS&W (less than)0.05 Maximum ASTM D-1796
Haze Rating @77 degrees F (Procedure 2) 2 Maximum ASTM D-4176
Thermal Stability
90 Minutes 150 degrees C Pad Rating 7 Maximum Dupont Scale
OR
Oxidation Stability 2.5 mg/100 ml Maximum ASTM D-2274
Target specifications are based on current fungible transportation diesel
fuel namely Colonial 74 Grade Low Sulfur Diesel Fuel. To the extent the
specifications change for Colonial 74 Grade Low Sulfur Diesel Fuel the target
specifications will be changed accordingly.
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the portion of this
--------
Product produced by Xxxxx Company feedstocks in GFU 243. That portion is
calculated as follows:
Xxxxx Company Portion = Total Diesel from GFU 243 * (( Total volume of
Diesel from AVU 146 - Diesel charge volume to GFU 241 + Total
volume of Light Gas Oil from DCU 843 ) * Xxxxx Company Crude
Oil Volume / Total Crude Oil Volume - Xxxxx Company Share of
the Excessed Unfinished Diesel ) / Total charge volume to GFU
243
Where:
Excessed Unfinished Diesel = The volume of Unfinished Diesel as defined in
Exhibit A-5
Price: The arithmetic average of the high/low Xxxxx'x Oilgram Price Report U.
-----
S. Gulf Coast Pipeline posting for spot purchases of LS No. 2 for each
publication day less 0.05 cents/gallon marketing fee multiplied by the quantity
of the Product delivered on that day.
The price for non-publication day deliveries shall be the arithmetic average of
the prices for the last proceeding publication day and the next following
publication day.
Delivery Point/Risk of Loss: This Product shall be delivered by pipeline to
---------------------------
Xxxxx and risk of loss shall pass at the battery limits of GFU 243.
Quantity Measurement: Product quantity measurements shall be taken at GFU 243
--------------------
meter FIC-
Product Purchase Agreement Page 70 August 3, 1999
EXHIBIT A-40
112. Total charge volume to GFU 243 shall be taken at GFU 243 meter
FIC-102.
Quality Measurement: Grab samples shall be taken (3) times per week and analyzed
--------------------
for each specification.
Product Purchase Agreement Page 71 August 3, 1999
EXHIBIT A-41
Product: Liquid Sulfur
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Target Specification:
--------------------
Property Specification Test Method
-------- ------------- -----------
H2S 100 ppmw Maximum Draeger
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase the total output of
--------
this product from SRU 545.
Price: Actual 3rd party sales price adjusted back to the custody transfer point
-----
for transportation and storage cost less $1.00 per long ton marketing fee.
Delivery Point/Risk of Loss: This product shall be delivered into railcar,
---------------------------
truck, or storage facility suitable to load marine vessels and risk of loss
shall pass at the point of delivery.
Quantity Measurement / Metering Facilities: Based on invoiced quantity.
------------------------------------------
Quality Measurement: Grab samples shall be taken as needed by 3rd party sales
-------------------
agreements.
Product Purchase Agreement Page 72 August 3, 1999
EXHIBIT A-42
Product: Hydrogen to Xxxxx Hydrogen Gathering System
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Target Specification:
--------------------
Component Specification Test Method
--------- ------------- -----------
Hydrogen 99.9% Mole Minimum UOP-539
Pressure 585 psig Minimum
Quantity: Xxxxx Company shall sell and Xxxxx shall purchase Hydrogen necessary
--------
to supplement Xxxxx internally produced hydrogen.
Price: The actual cost Xxxxx Company pays for hydrogen under contract with Air
-----
Products.
Delivery Point/Risk of Loss: This product shall be delivered by pipeline to the
---------------------------
Xxxxx Hydrogen Gathering System.
Quantity Measurement: Product quantity measurements shall be taken at HGS meter
--------------------
XX-XXXX.
Quality Measurement: Grab samples shall be taken at least (3) times per week
-------------------
and analyzed by gas chromatography.
