AMENDMENT NO. 3 TO COAL SUPPLY AGREEMENT
EXHIBIT 10.64
Peabody COALSALES Company
Contract #LGE 02011
Amendment Xx. 0
XXXXXXXXX XX. 0 TO COAL SUPPLY AGREEMENT
THIS AMENDMENT NO. 3 TO COAL SUPPLY AGREEMENT (“Amendment No. 3”) is entered into effective as of September 15, 2003, by and between LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky corporation, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (Buyer”), and PEABODY COALSALES COMPANY, a Delaware corporation, 000 Xxxxxx Xxxxxx, Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000-0000 (“Seller”). In consideration of the agreements herein contained, the parties hereto agree as follows.
1.0 AMENDMENTS
The Agreement heretofore entered into by the parties, dated effective January 1, 2002 and identified by the Contract Number set forth above, as amended by Amendment No. 1 dated effective June 1, 2002, and Amendment No. 2 dated effective January 1, 2003 is hereby further amended as follows, the January 2, 2002 Agreement, as amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0, and Amendment No. 3 is hereafter referred to as the “Agreement”:
2.0 QUANTITY
2.1 Section 3.1 Quantity, is deleted in its entirety and replaced with the following:
3.1 Quantity.
3.1.1 Seller shall sell and deliver and Buyer shall purchase and accept delivery of the following annual quantities of coal and/or coal synfuel:
|
YEAR |
|
BASE QUANTITY (TONS) |
|
|
|
|
|
|
|
2002 |
|
600,000 |
|
|
2003 |
|
350,000 |
- Quality A |
|
|
|
250,000 |
- Quality B |
|
|
|
400,000 |
- Coal Synfuel |
|
2004 |
|
600,000 |
- Coal Synfuel/Coal |
|
|
|
250,000 |
- Quality B |
3.1.2 In the event all or part of the Coal Synfuel quantities set forth in Section 3.1.1 above (i) cannot be unloaded or otherwise handled by Buyer without additional expense to Buyer, or (ii) causes adverse effects on the operation of Buyer’s generating stations (hereinafter referred to as an “Adverse Effect”), without limiting
any of the remedies of Buyer hereunder, Buyer shall have the right to elect to take all or part of such Coal Synfuel tonnage listed above as coal designated as Quality A.
3.1.3 In the event all or part of the Coal Synfuel quantities set forth in Section 3.1.1 above cannot be timely delivered by Seller or otherwise becomes unavailable as a result of the curtailing, reduction and/or ending of production at the Gilbraltar Coal Synfuel facility, Seller shall timely supply all or part of such Coal Synfuel tonnage listed above as coal designated as either Quality A or Quality B, at Seller’s option.
3.0 SOURCE
3.1 Section 4.1 Source, is deleted in its entirety and replaced with the following:
4.1 Source. The coal sold hereunder, including coal purchased by Seller from third parties, shall be supplied from the geological seams known as the Xxxxxxx Xxxxxxxx #0 and #11 seams. Coal designated as Quality A, as defined below, shall be supplied from the mining complex in Union County, Kentucky which is owned and operated by Seller’s affiliated company, Highland Mining Company (“Highland”). Coal designated as Quality B, as defined below, shall be supplied from: (i) the “Patriot Mining Complex” in Xxxxxxxxx County which consists of the Patriot Mine (a surface mining operation which is owned and operated by Seller’s affiliated company, Patriot Coal Company, LP (“Patriot”)) and the “Freedom Mine” (which is operated by Seller’s affiliated company, Ohio County Coal Company (“Ohio County”)); (ii) the Camp Complex in Xxxxxxxxx County, or (iii) the Gibraltar Mine in Muhlenberg County. Coal Synfuel sold hereunder shall be supplied from the Gibraltar Coal Synfuel Plant located in Muhlenberg County, Kentucky. The Camp Complex and the Gibraltar Mine are both owned and operated by Seller’s affiliated company, Peabody Coal Company (“Peabody Coal”). All of the foregoing sources of coal are hereinafter referred to as the “Coal Properties”. Highland, Patriot, Ohio County and Peabody shall be referred to collectively herein as “Producer.”
4.0 QUALITY
4.1 Section 6.1.1 Quality A, is deleted in its entirety and replaced with the following:
Quality A. The coal delivered hereunder which is designated as Quality A and the coal synfuel delivered hereunder shall conform to the following specifications on an “as received” basis:
QUALITY A
|
Specifications |
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Guaranteed Monthly |
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Rejection Limits |
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BTU/LB. |
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min. 11,400 |
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< 10 800 |
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LBS/MMBTU: |
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MOISTURE |
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max. 10.53 |
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> 12.00 |
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ASH |
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max. 8.33 |
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> 9.00 |
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SULFUR |
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max. 2.89 |
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> 3.10 |
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SULFUR |
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min. 2.30 |
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< 2.00 |
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CHLORINE |
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max. 0.009 |
|
> .015 |
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FLUORINE |
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max. |
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|
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NITROGEN |
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max. 1.32 |
|
> 1.70 |
|
|
|
|
|
|
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ASH/SULFER RATIO |
|
min 3.22:1 |
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> 3:1 |
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SIZE (3” x 0”): |
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|
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Top size (inches)* |
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max. 3x0 |
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> 4x0 |
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Fines
(% by wgt) |
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max. 60 |
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> 65 |
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|
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BY WEIGHT: |
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|
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VOLATILE |
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max. 30 |
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>29 |
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FIXED CARBON |
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max. 43 |
|
>40 |
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GRINDABILITY (HGI) |
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min. 50 |
|
<48 |
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BASE ACID RATIO (B/A) |
|
0.40 |
|
0.50 |
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SLAGGING FACTOR** |
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max. 1.32 |
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> 1.80 |
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FOULING FACTOR*** |
|
max. 0.32 |
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> 0.40 |
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ASH FUSION TEMPERATURE (°F) (ASTM D1857) |
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|
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REDUCING ATMOSPHERE |
|
|
|
|
|
Initial Deformation |
|
min. 1990 |
|
min. 1990 |
|
Softening (H=W) |
|
min. 2065 |
|
min. 2050 |
|
Softening (H=1/2W) |
|
min. 2105 |
|
min. 2075 |
|
Fluid |
|
min. 2225 |
|
min. 2200 |
|
|
|
|
|
|
|
OXIDIZING ATMOSPHERE |
|
|
|
|
|
Initial Deformation |
|
min. 2330 |
|
min. 2300 |
|
Softening (H=W) |
|
min. 2355 |
|
min. 2325 |
|
Softening (H=1/2W) |
|
min. 2400 |
|
min. 2370 |
|
Fluid |
|
min. 2480 |
|
min. 2400 |
(1) An actual Monthly Weighted Average will be calculated for each specification for coal delivered to the Buyer’s generating stations.
* All the coal will be of such size that it will pass through a screen having circular perforations three (3) inches in diameter, but shall not contain more than fifty (50) per cent (50%) by weight of coal that will pass through a screen having circular perforations one-quarter (1/4) of an inch in diameter.
** Slagging Factor (Rs)=(B/A) x (Percent Sulfur by WeightDry)
*** Fouling Factor (Rf)=(B/A) x (Percent Na2O by WeightDy)
The Base Acid Ratio (B/A) is herein defined as:
|
BASE ACID RATIO (B/A) = |
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Fe2O3 + CaO + MgO + Na2O + K2O |
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|
|
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(Si02 + Al2O3 + T1O2) |
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Note: As used herein |
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> |
|
means greater than: |
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|
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< |
|
means less than. |
5.0 PRICE
5.1 Section 8.1 Base Price is deleted and replaced with the following:
The base price (“Base Price”) of the coal and coal synfuel to be sold hereunder will be firm and will be determined by the criteria set forth in Section 5 in accordance with the following schedule:
|
Year |
|
Coal Synfuel Base Price (F.O. B. Barge) |
||
|
|
|
|
||
|
2003 |
|
|
$1.0557 per MMBtu |
$24.07 per ton |
|
2004 |
|
|
$1.0886 per MMBtu |
$24.82 per ton (1) |
(1) Any shortfall of tonnage from calendar year 2003 will be the first tons shipped and unloaded in calendar year 2004. Such carryover tonnage will be priced at the 2003 price until all of the carryover tonnage has been delivered and unloaded.
|
Year |
|
Coal Base Price Quality A (F.O.B. Barge) |
||
|
|
|
|
||
|
2002 |
|
|
$1.1224 per MMBtu |
$25.59 per ton |
|
2003 |
|
|
$1.1224 per MMBtu |
$25.59 per ton* |
|
2003 |
|
|
$1.1351 per MMBtu |
$25.88 per ton** |
|
2004 |
|
|
$1.1680 per MMBtu |
$26.63 per ton |
* The Base Price for the first 150,000 tons of Quality A delivered in 2003
** The Base Price for the remainder of the tons of Quality A delivered in 2003
|
Year |
|
Coal Base Price Quality B (F.O.B. Barge) |
||
|
|
|
|
||
|
2003 |
|
|
$0.90 per MMBtu |
$19.53 per ton |
|
2004 |
|
|
$0.91 per MMBtu |
$19.75 per ton |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3 on the day and year below written, but effective as of the day and year first set forth above.
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LOUISVILLE
GAS AND ELECTRIC |
PEABODY COALSALES COMPANY |
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SVP - Energy Marketing |
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