Common use of Determination of Quality Clause in Contracts

Determination of Quality. (A) The quality and BTU content of the LSFO Delivered by Pipeline Delivery to HECO shall be determined on the basis of a volumetric weighted average composite of samples drawn from Chevron’s issuing tank(s) at the Refinery in such a manner as to be representative of each individual Pipeline Delivery (“Tank Final Sample”). (B) The Tank Final Sample shall be divided into a minimum of three (3) parts as follows: (1) One part shall be provided to the Refinery’s laboratory for analysis to determine BTU content per barrel and quality determination. (2) One part shall be provided to HECO’s laboratory for analysis to determine BTU content per barrel and for the purpose of verifying Chevron’s determinations. (3) At least one part shall be sealed and retained by the Independent Inspector for a period of not less than three (3) months. (C) Chevron agrees to provide HECO and the Independent Inspector each with a copy of Chevron’s Certificate of Quality representing the Tank Final Sample and shall make commercially reasonable efforts to provide such quality documentation no later than the day of the completion of the Pipeline Delivery. If the completed Certificate of Quality is not available the day of the completion of the Pipeline Delivery, Chevron will advise HECO and the Independent Inspector, by the day of the completion of the Pipeline Delivery, the final determination of API gravity, flash point, sulfur content and sediment and water representing the Tank Final Sample. (D) The official BTU content determination shall be based upon an average of Chevron’s and HECO’s laboratory analyses, provided that such analyses fall within the ASTM reproducibility standard (currently 0.4 MJ/kg which the parties shall deem to be equivalent to a fixed standard of 60,000 BTU per barrel) for Test D 240. Chevron and HECO will make commercially reasonable efforts to evaluate the BTU content of the Tank Final Sample and exchange results within three (3) Business Days. In the event the difference between HECO’s and Chevron’s laboratory determination of BTU content falls outside said reproducibility standard, the sealed part of the Tank Final Sample in the possession of the Independent Inspector shall be provided to an independent testing laboratory for an official determination, which shall be final. In cases of disagreement or excessive delays in HECO’s determination of BTU content, Chevron shall have the right to invoice the sale using a provisional BTU content of 6.2 MM BTU per barrel, with any required adjustments made after final determination is made. Chevron and HECO shall share equally the cost of independent tests and determinations. (E) The quality of Line Displacement Stock shall be determined on the basis of samples drawn in such a manner as to be representative of each individual Delivery. Samples of Line Displacement Stock shall be drawn by Chevron or, if mutually agreed, by or under the supervision of an Independent Inspector the cost of which shall be shared equally by Chevron and HECO. Such samples shall be divided into two (2) parts: one part shall be used by Chevron to determine quality and BTU content, if so requested by HECO; and the other part shall be sealed and retained separately by HECO.

Determination of Quality. (A) The quality and BTU content of the LSFO Delivered by Pipeline Delivery to HECO shall be determined on the basis of a volumetric weighted average composite of samples drawn from Chevron’s issuing tank(s) at the Refinery in such a manner as to be representative of each individual Pipeline Delivery (“Tank Final Sample”). (B) The Tank Final Sample shall be divided into a minimum of three (3) parts as follows: (1) One part shall be provided to the Refinery’s laboratory for analysis to determine BTU content per barrel and quality determination. (2) One part shall be provided to HECO’s laboratory for analysis to determine BTU content per barrel and for the purpose of verifying Chevron’s determinations. (3) At least one part shall be sealed and retained by the Independent Inspector for a period of not less than three (3) months. (C) Chevron agrees to provide HECO and the Independent Inspector each with a copy of Chevron’s Certificate of Quality representing the Tank Final Sample and shall make commercially reasonable efforts to provide such quality documentation no later than the day of the completion of the Pipeline Delivery. If the completed Certificate of Quality is not available the day of the completion of the Pipeline Delivery, Chevron will advise HECO and the Independent Inspector, by the day of the completion of the Pipeline Delivery, the final determination of API gravity, flash point, sulfur content and sediment and water representing the Tank Final Sample. (D) The official BTU content determination shall be based upon an average of Chevron’s and HECO’s laboratory analyses, provided that such analyses fall within the ASTM reproducibility standard (currently 0.4 MJ/kg which the parties shall deem to be equivalent to a fixed standard of 60,000 BTU per barrel) for Test D 240. Chevron and HECO will make commercially reasonable efforts to evaluate the BTU content of the Tank Final Sample and exchange results within three (3) Business Days. In the event the difference between HECO’s and Chevron’s laboratory determination of BTU content falls outside said reproducibility standard, the sealed part of the Tank Final Sample in the possession of the Independent Inspector shall be provided to an independent testing laboratory for an official determination, which shall be final. In cases of disagreement or excessive delays in HECO’s determination of BTU content, Chevron shall have the right to invoice the sale using a provisional BTU content of 6.2 MM BTU per barrel, [ - - - ] [ - - - ] with any required adjustments made after final determination is made. Chevron and HECO shall share equally the cost of independent tests and determinations. (E) The quality of Line Displacement Stock shall be determined on the basis of samples drawn in such a manner as to be representative of each individual Delivery. Samples of Line Displacement Stock shall be drawn by Chevron or, if mutually agreed, by or under the supervision of an Independent Inspector the cost of which shall be shared equally by Chevron and HECO. Such samples shall be divided into two (2) parts: one part shall be used by Chevron to determine quality and BTU content, if so requested by HECO; and the other part shall be sealed and retained separately by HECO[ - - - ].