Minimum Throughput Commitment Clause Samples
A Minimum Throughput Commitment clause establishes a contractual obligation for one party to process, transport, or handle a specified minimum volume of goods or materials over a defined period. In practice, this means the party must meet or exceed the agreed throughput level, regardless of actual demand or usage, and may be required to pay penalties or fees if the minimum is not met. This clause ensures predictable revenue or utilization for the service provider and allocates the risk of underutilization to the committing party.
POPULAR SAMPLE Copied 3 times
Minimum Throughput Commitment. (a) During the Term of this Agreement and subject to the terms and conditions of this Agreement, Tesoro shall throughput the Minimum Throughput Commitment at the Terminals, and TLO shall make available to Tesoro commingled storage and throughput capacity at each respective Terminal, sufficient to allow Tesoro to throughput the Stipulated Volume of Products at such Terminal. Allocation of storage and throughput capacity for separate Products at each Terminal shall be in accordance with current practices, or as otherwise may be agreed among the Parties from time to time.
(b) Tesoro shall pay a per-barrel fee for the volumes it throughputs at the Terminals in accordance with Schedule A attached hereto. In addition, if the Parties mutually determine to utilize dedicated storage tanks at any time during the Term of this Agreement, Tesoro shall pay a fee for dedicated storage capacity at the Terminals, which fee shall be mutually determined at such time and set forth in a Schedule to this Agreement.
(c) Tesoro may throughput volumes in excess of its Minimum Throughput Commitment, up to the then-available capacity of each Terminal, net of any third-party commitments, as determined by TLO at any time. Allocation of any excess capacity shall be in accordance with current practices, or as otherwise may be agreed among the Parties from time to time. Any excess throughput volumes shall be subject to the throughput and Ancillary Service fees set forth on Schedule A and Schedule B, respectively.
(d) All fees set forth in this Agreement shall be increased on July 1 of each year of the Term, by a percentage equal to the greater of zero or the positive change in the CPI-U (All Urban Consumers), as reported by the U.S. Bureau of Labor Statistics.
(e) In the event at any time this Agreement is terminated as to one or more Terminals, as provided herein, then the Minimum Throughput Commitment shall thereafter be adjusted to be the Adjusted Minimum Volume Commitment.
Minimum Throughput Commitment. For each Calendar Quarter during the Term, Customer shall tender or cause to be tendered an average of at least 30,000 Barrels per Day of Product to the Terminal for storage and handling and redelivery to Customer in approximately ratable quantities (such average, the “Minimum Quarterly Commitment”), and Company shall accept, store and redeliver such Product in accordance with the terms of this Schedule. Except as expressly provided in the Agreement in connection with an Outage, a Company Force Majeure or a Customer Force Majeure, if during any Calendar Quarter, Customer fails to satisfy its Minimum Quarterly Commitment during such Calendar Quarter, then Customer will pay Company a deficiency payment (each, a “Quarterly Deficiency Payment”) in an amount equal to the volume of the deficiency (the “Quarterly Deficiency Volume”) multiplied by the Throughput Charges. Customer shall pay Company the amount of such Quarterly Deficiency Payment along with any Throughput Charges payable hereunder. The dollar amount of any Quarterly Deficiency Payment paid by Customer may be applied as a credit against any amounts incurred by Customer and owed to Company with respect to volumes of Product delivered to the Terminal in excess of Customer’s Minimum Quarterly Commitment (or, if this Schedule expires or is terminated, to volumes delivered to the Terminal in excess of the applicable Minimum Quarterly Commitment in effect as of the date of such expiration or termination) (such excess volume in any Calendar Quarter during the Term is referred to as the “Quarterly Surplus Volume”) during any of the succeeding four Calendar Quarters, after which time any unused credits will expire. This Section 7 shall survive the expiration or termination of this Schedule, if necessary for the application of any Quarterly Deficiency Payment against any Quarterly Surplus Volume as set forth herein. Company shall provide throughput capacity at the Terminal to Customer in excess of the Minimum Quarterly Commitment on an “as available” basis, and any use of such excess capacity will be subject to the Throughput Charges.
Minimum Throughput Commitment. During each Contract Quarter during the Term and subject to the terms and conditions of this Agreement, the Refining Entity agrees that, commencing on the Effective Date, the Refining Entity will ship on the Pipelines in the aggregate, an amount of Crude Oil equal to or greater than the Minimum Throughput Commitment.
Minimum Throughput Commitment. (a) During the Term and subject to the terms and conditions of this Agreement, Tesoro shall throughput the Minimum Throughput Commitment at the Terminals, and TLO shall make available to Tesoro commingled storage and throughput capacity at each respective Terminal, sufficient to allow Tesoro to throughput the Stipulated Volume of Products at such Terminal.
(b) Allocation of storage and throughput capacity for separate Products at each Terminal shall be in accordance with current practices, or as otherwise may be set forth in a Terminal Service Order, as described below.
(c) Tesoro may throughput volumes in excess of its Minimum Throughput Commitment, up to the then-available capacity of each Terminal, net of any third-party commitments, as determined by TLO at any time, which allocation of any excess capacity shall be in accordance with current practices, or as otherwise may be set forth in a Terminal Service Order, as described below.
(d) In the event at any time this Agreement is terminated as to one or more Terminals, as provided herein, then the Minimum Throughput Commitment shall thereafter be adjusted to be the Adjusted Minimum Volume Commitment.
Minimum Throughput Commitment. During the Applicable Term and subject to the terms and conditions of this Agreement, each Applicable Refinery Owner agrees as follows:
Minimum Throughput Commitment. To the extent the Company is prevented for 30 or more days in any Contract Year from (i) throughputting volumes on the El Dorado Crude Pipeline equal to at least the El Dorado Crude Pipeline Minimum Throughput Capacity or (ii) throughputting volumes on the Products Pipeline equal to at least the Products Minimum Throughput Commitment for reasons of Force Majeure or other interruption of service affecting the facilities or assets of the Partnership Parties, then the applicable Minimum Throughput Commitment shall be proportionately reduced to the extent of the difference between the applicable Minimum Throughput Capacity and the amount that the Partnership Parties can effectively throughput in such Pipelines (prorated for the portion of the Contract Quarter during which the applicable Minimum Throughput Capacity was unavailable) regardless of whether actual throughput amounts prior to the reduction were below the applicable Minimum Throughput Commitments. At such time as the Partnership Parties are capable of throughputting volumes equal to the full applicable Minimum Throughput Capacity, the Company’s obligation to throughput the full applicable Minimum Throughput Commitment shall be restored. If for any reason, including, without limitation, a Force Majeure event, the throughput of the Pipelines should fall below the applicable Minimum Throughput Capacity, then with due diligence and dispatch, the Partnership Parties shall make repairs to the Pipelines to restore the capacity of the Pipelines to that required for throughput of the applicable Minimum Throughput Capacity (“Restoration”). Except as provided below in Section 6.3, all of such Restoration shall be at the Partnership Parties’ cost and expense, unless the damage creating the need for such repairs was caused by the negligence or willful misconduct of the Company, its employees, agents or customers. The Partnership Parties shall maintain the Gathering System and the Rail Pipeline in good working order.
Minimum Throughput Commitment. Each Month during the Term, TRMC shall ship the Minimum Throughput Commitment on the Short Haul Pipelines, or, in the event it fails to do so, shall remit to TLO the Shortfall Payment pursuant to Section 6 below. TRMC shall be deemed to have shipped its Minimum Throughput Commitment if the aggregate quantity of crude petroleum and refined petroleum products that TRMC ships on the Short Haul Pipelines in any Month equals at least the Minimum Throughput Commitment, regardless of the particular Segments on which those shipments are made.
Minimum Throughput Commitment. During each Contract Quarter during the Term and subject to the terms and conditions of this Agreement, DKTS agrees that, commencing on the Effective Date, DKTS will ship on the Pipelines in the aggregate, an amount of Crude Oil equal to or greater than the Minimum Throughput Commitment.
Minimum Throughput Commitment. Each Month during the Term, TRMC shall ship the Minimum Throughput Commitment on the Short Haul Pipelines (excluding the UNEV Connection from the UNEV Commencement Date until the expiration of the Capital Recovery Period), or, in the event it fails to do so, shall remit to TLO the Monthly Shortfall Payment pursuant to Section 6(a) below. TRMC shall be deemed to have shipped its Minimum Throughput Commitment if the aggregate quantity of crude petroleum and refined petroleum products that TRMC ships on the Short Haul Pipelines (excluding the UNEV Connection from the UNEV Commencement Date until the expiration of the Capital Recovery Period) in any Month equals at least the Minimum Throughput Commitment, regardless of the particular Segments on which those shipments are made.