Agreement No.:_______________
TRANSPORTATION AGREEMENT
PART I
GENERAL UNDERTAKINGS AND OBLIGATIONS OF THE PARTIES
THIS AGREEMENT is made and entered into as of this 20th day of
June, 1996 (the "Effective Date"), by and between ▇▇▇▇▇▇ ASSOCIATES,
INC., a Kansas corporation ("Transporter"), and ENRON LIQUIDS PIPELINE OPERATING
LIMITED PARTNERSHIP, a Delaware limited partnership ("Shipper").
WITNESSETH THAT:
WHEREAS, Shipper intends to acquire title to Product from Shell Western E&P
Inc. ("Shell") and from Mobil Producing Texas & New Mexico Inc. ("Mobil")
pursuant to written contracts with Shell and Mobil ("Carbon Dioxide Purchase
Contracts"), and to deliver the Product to Transporter at the point of
interconnection between Shipper's Central Basin Pipeline ("CBPL") Mainline and
Transporter's Odessa Lateral; and
WHEREAS, Transporter will own facilities known as the Odessa Lateral,
capable of transporting Shipper's Product from the point of interconnection
between Shipper's CBPL Mainline and Transporter's Odessa Lateral to a point of
interconnection of Transporter's Odessa Lateral and ▇▇▇▇▇▇▇▇ Petroleum Company's
("▇▇▇▇▇▇▇▇") Injection Project at the South ▇▇▇▇▇▇ Unit, ▇▇▇▇▇ County, Texas;
and
WHEREAS, Shipper intends to re-sell Product transported on the Odessa
Lateral to ▇▇▇▇▇▇▇▇ pursuant to a written contract with ▇▇▇▇▇▇▇▇ ("Carbon
Dioxide Sale Contract"); and
WHEREAS, Shipper and Transporter now desire to enter into an Agreement for
the transportation of Shipper's Product through the Odessa Lateral to the
Destination Point of the Injection Project.
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
promises, and undertakings herein contained, the parties hereto agree as
follows:
1. Injection Project. "Injection Project" shall mean an
enhanced oil recovery project in Sections 7, 8, 17
and 19 of the T&P ▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇
▇▇▇, located in Ector County, TX of the South ▇▇▇▇▇▇
Unit. All of Shipper's Product to be transported
hereunder will be for resale by Shipper only to
▇▇▇▇▇▇▇▇ (which for purposes hereof shall include
▇▇▇▇▇▇▇▇ successors and assigns in interest with
respect to the Injection Project) and for use by
▇▇▇▇▇▇▇▇ at the Injection
Project and may not be sold by Shipper or ▇▇▇▇▇▇▇▇ to any other person or
used by Shipper or ▇▇▇▇▇▇▇▇ at any other location.
2. Lateral. "Lateral" shall mean Transporter's Odessa
Lateral, being of 6 inches nominal diameter,
originating at the CBPL Mainline Milepost 98.15.
3. Origination Point. "Origination Point" shall mean
the insulating flange connection between Shipper's
Central Basin Pipeline Mainline and Transporter's
Odessa Lateral located in Ector County, Texas.
4. Destination Point. "Destination Point" shall mean
the insulating flange connection between
Transporter's Odessa Lateral and ▇▇▇▇▇▇▇▇' Injection
Project.
5. Daily Transport Quantity. "Daily Transport Quantity"
or "DTQ" shall mean the maximum daily quantity of
Product, as measured at the meter located near the
Destination Point ("Metering Point"), which Shipper
has the right to have redelivered by Transporter
hereunder. The DTQ shall be:
Contract Est. Calendar DTQ Annual Quantity
Year Year Mcf/d Bcf/Year
1 1996 10,411 3,800
2 1997 10,411 3,800
3 1998 7,123 2,600
4 1999 6,575 2,400
5 2000 6,140 2,241
6 2001 6,030 2,201
7 2002 5,586 2,039
8 2003 5,203 1,899
9 2004 4,877 1,780
10 2005 4,699 1,715
11 2006 5,510 2,011
12 2007 5,627 2,054
13 2008 4,907 1,791
14 2009 4,151 1,515
15 2010 3,942 1,439
16 2011 3,904 1,425
17 2012 3,636 1,327
18 2013 3,710 1,354
19 2014 3,164 1,155
20 2015 2,556 933
and, if applicable, certain quantities of Carbon
Dioxide including the Additional Quantity and Excess
Deliveries,
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subject to the provisions of Sections 6 and 7 of Part
I herein below.
6. Additional Quantity. Shipper shall also have the
right to have redelivered by Transporter hereunder,
an Additional Quantity of Carbon Dioxide in excess of
the then effective Daily Transport Quantity, which
shall be deemed "Additional Quantity", at maximum
rates not to exceed twenty percent (20%) of Shipper's
then current Daily Transport Quantity for the
applicable contract year. Before or within ninety
(90) days after the Primary Term of this Agreement,
Shipper may elect to extend Shipper's rights to
transport any remaining quantities of Additional
Quantities on the Odessa Lateral for ▇▇▇▇▇▇▇▇'
Injection Project at the South ▇▇▇▇▇▇ Unit only. If
Shipper makes such election, such Additional
Quantity's maximum daily rates shall not exceed four
thousand (4,000) Mcf per Day and the obligation to
transport such remaining Additional Quantities shall
continue only for a period of time not to exceed
three (3) years after expiration of the Primary Term
of this Agreement. Any Additional Quantities not
requested within 90 days after expiration of the
Primary Term of this Agreement will be deemed
released from any quantities that the Transporter may
be responsible for as described herein. In the event
Shipper elects to extend its transportation rights
herein beyond the Primary Term of this agreement to
transport remaining Additional Quantities, Shipper
agrees to increase the Transportation Rate, if
required, to allow Transporter to break even on a
cash flow basis. Transporter agrees to provide
Shipper with all applicable information to determine
the applicable rate which will allow Transporter to
operate the lateral on a break even cash flow basis.
7. Excess Deliveries. At Shipper's request, Transporter
may, at Transporter's option, transport on any given
Day a quantity of Product in excess of the then
currently effective maximum Additional Quantity.
8. Minimum Transport Requirement. During the first
twelve (12) years of the term of this Agreement or
until Shipper has transported a cumulative quantity
of Product equal to 14.27 Bcf, whichever occurs
earlier, Shipper shall have a minimum transport
requirement (the "Minimum Transport Requirement" or
"MTR") being that percentage of Shipper's DTQ upon
which Shipper's minimum monthly payment is computed:
MTR: 50%, subject to the provisions of Section 10 of
Part I, and Sections 9 and 11 of Part II herein.
In any month in which the minimum monthly amount hereunder (as determined
in Section 9(a) of Part II) is greater than the actual monthly amount (as
determined in Section 9(b) of Part
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II), Shipper's payment to Transporter of such minimum monthly amount shall
be subject to ▇▇▇▇▇▇▇▇' payment to Shipper of the "Minimum Monthly Amount"
and/or "Minimum Purchase Requirement" pursuant to Sections 5.2 and 5.3 of
the Carbon Dioxide Sale Contract. Notwithstanding the foregoing, to the
extent that any failure or refusal by ▇▇▇▇▇▇▇▇ to make full payment for any
"Minimum Monthly Amount" or "Minimum Purchase Requirement" under the Carbon
Dioxide Sale Contract is based on any claim or right of offset asserted by
▇▇▇▇▇▇▇▇ against Shipper and such claim or right of offset pertains to
matters or arrangements between Shipper and ▇▇▇▇▇▇▇▇ other than any claim
in any way related to or arising out of the Carbon Dioxide Sale Contract or
this Agreement (whether in contract, tort or otherwise), then Shipper's
obligation to make payment for the full minimum monthly amount (as
determined in Section 9(a) of Part II) shall be absolute and unconditional
notwithstanding such nonpayment by ▇▇▇▇▇▇▇▇. In the event of partial
payment by ▇▇▇▇▇▇▇▇ of the "Minimum Monthly Amount" or "Minimum Purchase
Requirement," Shipper shall pay to Transporter an equal proportionate part
of the minimum monthly amount hereunder (as determined in Section 9(a) of
Part II) as the amount actually received by Shipper from ▇▇▇▇▇▇▇▇ bears to
the full "Minimum Monthly Amount" or "Minimum Purchase Requirement" under
the Carbon Dioxide Sale Contract, and Shipper will thereafter pay to
Transporter its proportionate share of any additional "Minimum Monthly
Amounts" or "Minimum Purchase Requirement" received by Shipper from
▇▇▇▇▇▇▇▇.
9. Total Contract Quantity. The "Total Contract
Quantity" shall be the result obtained by multiplying
the DTQ (as applicable for the particular year) times
the number of days in such year, and summed for all
years from the Initial Transportation Date to the
Expiration Date, for purposes of this Agreement,
computed: Total Contract Quantity: 39.48 Bcf.
10. Term. This agreement shall be effective as of the
Effective Date specified above, but the parties'
respective duties and responsibilities for payment
and performance hereunder shall commence upon the
Initial Transportation Date as defined hereinbelow.
If Shipper does not acquire the rights to buy Carbon
Dioxide under the terms of the Carbon Dioxide
Purchase Contracts and the right to sell Carbon
Dioxide under the terms of the Carbon Dioxide Sale
Contract by January 1, 1997, this Agreement shall
automatically terminate. The term of this Agreement
shall remain in full force and effect for a primary
term of twenty (20) years from the Initial
Transportation Date (the "Primary Term"; and the last
day of the Primary Term shall be the "Expiration
Date"), and month to month thereafter, provided,
however, that either party may terminate this
Agreement on or after the Expiration Date by
providing written
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notice of termination to the other party at least thirty (30) days in
advance after the Expiration Date, provided however, this Agreement shall
automatically terminate at any time upon written notice, if for any reason
Shipper's Carbon Dioxide Purchase Contract with Shell or Mobil are
terminated or if for any reason Shipper's Carbon Dioxide Sale Contract with
▇▇▇▇▇▇▇▇ is terminated. In the event of such termination, the respective
rights and obligations of Shipper and Transporter hereunder shall also
terminate, subject however, to the settlement of all duties, obligations
and liabilities incurred prior to such termination.
11. Initial Transportation Date. The "Initial
Transportation Date" or "ID" shall mean the date on
which (i) all facilities of Shipper and Transporter
required for the implementation of this Agreement are
operational, (ii) any requisite authorizations have
been received and accepted, (iii) Shipper has the
right to purchase Product from Shell and Mobil under
the terms and conditions of the Carbon Dioxide
Purchase Contracts, and (iv) Product is first
transported hereunder or ▇▇▇▇▇▇▇▇ becomes obligated
to begin making payment of the "▇▇▇▇▇▇▇▇ Demand
Charge" (as hereinafter defined).
12. Transport Rate. The transport rate (the "Transport
Rate" or "TR") in cents per Mcf payable by Shipper to
Transporter for Product hereunder transported through
the Odessa Lateral shall be as follows:
If the Total Cost to Construct the Odessa Lateral
pursuant to Shipper's and Transporter's
Construction Agreement is:
Less Than $ Tariff/
or Equal To But, Greater Than Mcf Will Be
1,200,000 0 $0.0250
1,300,000 1,200,000 $0.0340
1,400,000 1,300,000 $0.0435
1,500,000 1,400,000 $0.0525
1,600,000 1,500,000 $0.0615
2,000,000 1,600,000 $0.0710
Shipper's obligation to pay Transporter for transportation services shall
accrue upon the ID, and shall continue until the Expiration Date of this
Agreement and, if extended, until the end of any extension hereof, unless
suspended or nullified due to a condition of force majeure or of
termination of this Agreement, as provided herein. Shipper's obligation to
pay Transporter for transportation services shall also be subject to
▇▇▇▇▇▇▇▇' payment to Shipper of the applicable "Unit Price"
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(as determined in paragraph 5.1 of the Carbon Dioxide Sale Contract) for
each Mcf of Carbon Dioxide delivered to ▇▇▇▇▇▇▇▇ (i.e., for each Mcf of
Carbon Dioxide for which ▇▇▇▇▇▇▇▇ pays the applicable Unit Price, or part
thereof, to Shipper, Shipper agrees to make payment at the applicable
Transport Rate, or an equal proportionate part thereof in the event of
partial payment by ▇▇▇▇▇▇▇▇, for transportation of an Mcf of Product
hereunder). Notwithstanding the foregoing, to the extent that any failure
or refusal by ▇▇▇▇▇▇▇▇ to make full payment for all Carbon Dioxide
delivered is based on any claim or right of offset asserted by ▇▇▇▇▇▇▇▇
against Shipper and such claim or right of offset pertains to matters or
arrangements between Shipper and ▇▇▇▇▇▇▇▇ other than any claim in any way
related to or arising out of the Carbon Dioxide Sale Contract or this
Agreement (whether in contract, tort or otherwise), then Shipper's
obligation to make payment for transportation of Product through the Odessa
Lateral shall be absolute and unconditional notwithstanding such nonpayment
by ▇▇▇▇▇▇▇▇.
13. Demand Fee. In addition to the other fees and
compensation to be paid by Shipper to Transporter
hereunder, Shipper shall pay Transporter a demand fee
(the "Demand Fee") in an amount as specified in the
table set forth below:
If the Total Cost to Construct the Odessa Lateral
pursuant to Shipper's and Transporter's Construction
Agreement is:
Less Than or But, Greater Demand Fee Monthly
Equal to Than Amount Installment
1,700,000 0 $2,800,000.30 $29,166.67
1,800,000 1,700,000 $3,016,000.30 $31,416.67
1,900,000 1,800,000 $3,240,000.00 $33,750.00
2,000,000 1,900,000 $3,456,000.00 $36,000.00
Shipper's obligation to pay Transporter the first installment of the Demand
Fee shall commence upon the ID, and shall continue until the Demand Fee is
paid in full. Shipper shall pay Transporter the Demand Fee in ninety-six
(96) equal monthly installments in the amount set forth in the above table
(the "Monthly Installments"). Except as hereinbelow stated in this Section
13, from and after the ID, Shipper's obligation to pay the entirety of the
Demand Fee, shall be absolute and unconditional and such obligation to pay
the Demand Fee shall survive any termination of this Agreement, including,
without limitation, termination pursuant to Section 10 of Part I, Section
20 of Part II, Section 15 of Part II and/or Section 28 of Part II.
6
Notwithstanding anything herein to the contrary, Shipper's obligation to
pay the Demand Fee (in Monthly Installments as provided for in this Section
13) will be suspended if:
(a) either (i) ▇▇▇▇▇▇▇▇ does not make any payment of the "▇▇▇▇▇▇▇▇
Demand Charge" (hereinafter defined), or (ii) the Odessa Lateral is not
available for transportation of Product, including any periods of
Transporter's events of force majeure, or Transporter refuses to
transport Product as required hereunder, and
(b) the aggregate amount of the Demand Fee theretofore paid to
Transporter then exceeds (or with such payment would exceed) the
aggregate amount of the ▇▇▇▇▇▇▇▇ Demand Charge theretofore paid to
Shipper. In such event, the Demand Fee payment will be suspended in the
amount that the Demand Fee which would otherwise be due and payable in
accrued Monthly Installments exceeds the aggregate amount of the
▇▇▇▇▇▇▇▇ Demand Charge theretofore paid to Shipper. However, if any
payment of the ▇▇▇▇▇▇▇▇ Demand Charge is not made by ▇▇▇▇▇▇▇▇ as a
result of Shipper's inability to transport Carbon Dioxide on the
Central Basin Pipeline or if any failure or refusal by ▇▇▇▇▇▇▇▇ to make
any payment of the ▇▇▇▇▇▇▇▇ Demand Charge is based on any claim or
right of offset asserted by ▇▇▇▇▇▇▇▇ against Shipper and such alleged
claim or right of offset pertains to matters or arrangements between
Shipper and ▇▇▇▇▇▇▇▇ other than any claim in any way related to or
arising out of the Carbon Dioxide Sale Contract or this Agreement
(whether in contract, tort or otherwise), then Shipper's obligation to
make each Monthly Installment of the Demand Charge shall be absolute
and unconditional notwithstanding such nonpayment by ▇▇▇▇▇▇▇▇. If any
failure or refusal by ▇▇▇▇▇▇▇▇ to make any payment of the ▇▇▇▇▇▇▇▇
Demand Charge is based on any claim or right of offset asserted by
▇▇▇▇▇▇▇▇ against Shipper and which relates to the Carbon Dioxide Sale
Contract or this Agreement, then Shipper and Transporter agree to
cooperate in good faith to determine the validity of such asserted
claim or right of offset (through negotiation, arbitration, litigation
or otherwise) and to collect amounts which are properly due from
▇▇▇▇▇▇▇▇; and Shipper shall be responsible to make payment to
Transporter of the Demand Charge in question to the extent that it is
agreed or determined (through negotiation, arbitration, litigation or
otherwise) that ▇▇▇▇▇▇▇▇ has a valid claim or right of offset against
Shipper and such alleged claim or right of offset does not arise from
any act or omission by Transporter hereunder. In the event payment of
any part
7
of the Demand Fee has been suspended hereunder as a result of any
nonpayment of the ▇▇▇▇▇▇▇▇ Demand Charge, Shipper shall make payment to
Transporter of such suspended Demand Fee to the extent that ▇▇▇▇▇▇▇▇
makes payment of the ▇▇▇▇▇▇▇▇ Demand Charge, and upon receipt by
Shipper of full payment of the ▇▇▇▇▇▇▇▇ Demand Charge, Shipper
unconditionally agrees to pay Transporter the Demand Fee. If any part
of the Demand Fee payment is suspended hereunder because the Odessa
Lateral is not available for transportation of Product, this Agreement
shall continue in full force and effect and the Demand Fee shall
thereafter be paid in full without reduction or offset if the Odessa
Lateral becomes available to resume transportation of Product within
120 days following such occurrence. If after such 120 day period the
Odessa Lateral becomes available for transportation of Product and
Shipper and Transporter mutually agree that shipment of Product will
resume hereunder, the Demand Fee shall thereafter be paid as agreed by
the parties. If after 120 days the Odessa Lateral is not available for
transportation of Product, this Agreement shall terminate. As used
herein the term "▇▇▇▇▇▇▇▇ Demand Charge" shall mean the "Demand Fee" to
be paid by ▇▇▇▇▇▇▇▇ to Shipper pursuant to Section 5.6 of the Carbon
Dioxide Sale Contract.
To the extent that payment of the Demand Fee is suspended hereunder,
Shipper shall be released and relinquished from its obligation to pay that
portion of the Demand Fee, except to the extent the ▇▇▇▇▇▇▇▇ Demand Charge
is thereafter collected or received.
14. Points of Delivery and Pressure. Shipper shall
deliver to Transporter, or cause to be delivered,
Product at the Origination Point at a pressure
sufficient to allow such Product to enter
Transporter's system; but within 1600 psig and 1800
psig. Transporter shall redeliver for Shipper's
account, or cause to be redelivered, Product at the
Destination Point at a Minimum pressure of 1500
psig. Pressures in excess of 1500 psig are not
guaranteed.
15. Obligations to Third Parties. Transporter agrees
that if Shipper should default under this Agreement
and not remedy such default pursuant to Section 20 of
Part II herein, and such default could adversely
affect ▇▇▇▇▇▇▇▇' ability to obtain Carbon Dioxide for
the Injection Project, then upon ▇▇▇▇▇▇▇▇' request,
Shipper will assign all of Shipper's rights under
this Agreement to ▇▇▇▇▇▇▇▇, provided that ▇▇▇▇▇▇▇▇
assumes Shipper's obligations from the date of such
take over forward including payment of the Demand Fee
and payment for
8
transportation services as provided for herein. In the event of such
assignment, ▇▇▇▇▇▇▇▇ will be responsible to pay Transporter all monies
accrued and owed to Transporter under this Agreement at the time of the
assignment and which may thereafter accrue or become due hereunder.
16. Shipper's Additional Covenants. As provided in this
Agreement, Transporter has agreed that certain
payments from Shipper shall be conditioned upon the
receipt by Shipper of certain payments from ▇▇▇▇▇▇▇▇
pursuant to the Carbon Dioxide Sale Contract. In
order to induce Transporter to accept such
conditional payment, Shipper hereby covenants that
unless otherwise provided under the terms of the
Carbon Dioxide Sale Contract Shipper will not
hereafter consent to or cause any change, amendment,
modification or termination of the Carbon Dioxide
Sale Contract or waive any requirement for strict
performance thereof by each party in accordance with
its terms in any way that would impact or harm
Transporter, unless Transporter has provided its
advance written consent to such action which consent
shall not be unreasonably withheld by Transporter.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
hereinabove written.
"TRANSPORTER"
▇▇▇▇▇▇ ASSOCIATES, INC.
ATTEST:
BY:____________________________ BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE:_________________________ TITLE: President
"SHIPPER"
ENRON LIQUIDS PIPELINE
OPERATING LIMITED PARTNERSHIP
By: Enron Liquids Pipeline
Company, General
Partner
ATTEST:
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇ ▇▇▇▇▇▇
TITLE: Assistant Secretary TITLE: President
9
TRANSPORTATION AGREEMENT
PART II
GENERAL TERMS AND CONDITIONS
1. Product. "Product" shall mean that mixture of
compounds meeting the specifications set forth on
Exhibit "A," consisting predominantly of Carbon
Dioxide (CO2), which shall be transported hereunder
while in the liquid, gaseous, or supercritical phase.
2. Title. Shipper warrants unencumbered title to the
Product delivered to Transporter hereunder and that
the same was produced and/or purchased in accordance
with all applicable laws and regulations. Title to
Product shall never pass to Transporter and shall
remain with Shipper at all times.
3. Scheduling. On or before the twentieth (20th) day of each month, Shipper or
its designee shall furnish Transporter or its designee with schedules
showing the daily quantity of Product Shipper desires to have transported
during the month immediately following.
4. Losses. In the event a loss of quantity of Product
occurs on the Odessa Lateral, as estimated or
calculated using the best available information, from
the time the Product is delivered to Transporter at
the Origination Point until the Product passes
through the Destination Point ("Loss"), such Loss
shall be the responsibility of the Transporter.
Losses accountable to Shipper will be determined by
the ratio of Shipper's Destination Quantities to the
destination quantities of all shippers on the Odessa
Lateral. Transporter agrees to replace such losses
within 60 days.
5. Off-Spec Product. Shipper shall be responsible for replacing any quantities
of Product vented from Transporter's lateral as a result of deliveries of
Product made by Shipper at the Origination Point which do not conform to
the Quality Specifications set forth on Exhibit "A.".
If, at any time, Product tendered for delivery by Shipper at the
Origination Point shall fail to conform to said Quality Specifications,
Transporter may, at its option, suspend all or a portion of the receipt of
such off-spec Product and be absolved of any further obligation to perform
under this Agreement with respect to the non-conforming Product. Such
suspension by Transporter shall not relieve Shipper of its minimum payment
obligation hereunder pursuant to Section 9 of Part II. Transporter shall
notify Shipper of the non-
10
conformity to specifications as soon as possible
after occurrence.
6. Commingling. Product delivered by Shipper may be commingled in
Transporter's Odessa Lateral with Product owned by others and Shipper's
Product will be subject to such changes in quality as may result from such
commingling, but will not be of a lesser quality than that described in
Exhibit "A".
7. Measurement. The unit of measurement for Product
delivered hereunder shall be pounds-mass converted to
cubic feet of gas under standard conditions of
fourteen and sixty-five hundredths (14.65) psia and
sixty degrees Fahrenheit (60(degree)F). All fundamental
constants, observations, records, and procedures
involved in determining and/or verifying the quantity
and other characteristics of Product delivered
hereunder shall be in accordance with accepted
industry practice. The molecular weight of the
metered stream of Product, calculated from the
compositional analysis, shall be the basis for
conversion of pounds-mass measurement to standard
cubic feet measurement units.
8. Meters. At the Metering Point, Transporter or its
designee shall operate and maintain a meter station
which is in accurate working order. Transporter
shall cause this measuring equipment to be tested
monthly. The atmospheric pressure at the Metering
Point shall be based upon fourteen and seventy-three
hundredths (14.73) psia at sea level corrected to the
actual elevation of each location, and may be assumed
a constant for calculation purposes. Shipper shall
have the right to witness all meter provings.
However, readings, calibrations and adjustments
thereof and changing of charts shall be done by the
employees or agents of Transporter or its designee.
Transporter shall keep its measuring equipment at the Metering Point
accurate and in good repair. Shipper may challenge the accuracy of
Transporter's measuring equipment, and, when challenged, the equipment
shall be tested and repaired, if necessary, by Transporter. The expense of
such special test, if requested by Shipper shall be borne by Shipper if the
measuring equipment is found by such test to be inaccurate (based upon
measured pounds-mass) by two percent (2%) or less. If, upon any test, any
measuring equipment is found to be inaccurate to the extent that it affects
the measurement accuracy (based upon measured pounds-mass) by an amount
exceeding two percent (2%), registration thereof shall be corrected for a
period extending back to the time such inaccuracy occurred, if such time is
ascertainable, and if not
11
ascertainable, then back one-half of the time elapsed since the last date
of calibration.
If, for any reason, any of Transporter's facilities are out of service or
out of repair so that the amount of Product delivered or redelivered cannot
be ascertained or computed from the readings thereof or corrected under
this Section, Product delivered during the period such meter is out of
service or out of repair shall be estimated and agreed upon by the parties
on the basis of are best data available.
9. Product Transportation - Billing. The total
compensation (but excluding the Demand Fee) to be
paid by Shipper to Transporter for transportation
services hereunder for each month shall be the
greater of:
(a) a minimum monthly amount determined by the
following formula:
DTQ (x) MTR (x) TR (x) days in month; OR
(b) an actual monthly amount determined by the
following formula:
monthly metered quantity of Product at
Metering Point (x) TR.
The minimum monthly amount as determined in (a) above shall be adjusted
each month for (i) any periods in which actual deliveries were not made
wholly or in part, due to Transporter's force majeure as defined in
Section 15 of Part II and (ii) failure by Transporter to transport
quantities of Product up to Shipper's DTQ when and as requested.
For any month in which Shipper makes payment to Transporter based upon the
minimum monthly amount as determined pursuant to part (a), above, the
difference between Shipper's net payment as calculated pursuant to part (a)
and the actual monthly amount as calculated pursuant to part (b) shall be
credited ("Deficiency Credit") against subsequent monthly ▇▇▇▇▇▇▇▇ due by
Shipper under this Agreement. The Deficiency Credit shall be applied in the
first subsequent month(s) during which the calculated actual monthly amount
exceeds the minimum monthly amount, to the extent that the actual monthly
amount exceeds the minimum monthly amount for such subsequent month or
months. Shipper may carry forward Deficiency Credit balances for a period
not to exceed 36 months after the expiration of this Agreement, at which
time all Deficiency Credits hereunder shall automatically terminate without
further obligation of Transporter.
12
At any time after the cumulative quantity of Product shipped hereunder
exceeds the Total Contract Quantity, then Shipper shall have the option,
notwithstanding the other provisions of this Agreement, to reduce the
applicable DTQ to any level chosen by Shipper, to become effective the
month immediately following Transporter's receipt of Shipper's written
notice, and shall remain in effect until the Effective Date of any
subsequent exercise by Shipper of its option pursuant to this Section, but
in no event for a period of less than twelve (12) months.
Transporter shall invoice Shipper monthly and Shipper shall pay to
Transporter the amount shown as due by such statement, by wire transfer of
immediately available U.S. funds within twenty (20) calendar days following
the date of such statement.
10. Demand Fee - Billing. The total Demand Fee to be
paid by Shipper to Transporter hereunder shall be the
monthly amount as listed in Section 13 of Part 1
herein.
Shipper shall automatically pay to Transporter the Demand Fee amount due,
by wire transfer of immediately available U.S. funds within ten (10)
calendar days of the end of each Month commencing with the month of the ID.
11. Shipper's Obligation for Payment. If either party
fails to pay any amount payable to the other party
when due, interest thereon shall accrue at the lesser
of (1) the Prime Rate then charged by Citibank, N.A.
of New York, New York, or (2) the highest legally
permissible rate, with such interest computed from
the due date to the date of actual payment. If
Shipper fails to pay and such failure to pay
continues for forty-five (45) days after payment is
due, Transporter, in addition to any other remedy it
may have hereunder, may suspend further receipt
and/or delivery of Product for Shipper until such
amount is paid. In the event of any dispute as to
the amounts payable hereunder, payment shall be made
as provided in this Section 11 of Part II; but such
payment shall not be deemed a waiver of Shipper's
right to recoup any amounts in dispute. Any such
disputed amounts refunded to Shipper by Transporter
shall bear interest at the above specified rate from
the date of Shipper's initial payment of such
disputed amounts to the date of refund to Shipper.
If, as provided in this Agreement, Shipper is not required to make any
payment to Transporter (whether of the charges for transportation services,
the Demand Fee, or the minimum monthly amount) because of the nonpayment by
▇▇▇▇▇▇▇▇ under the Carbon Dioxide Sale Contract, then Shipper shall assign
to
13
Transporter Shipper's right, title and interest to receive such amounts
which have not been paid by ▇▇▇▇▇▇▇▇ (up to the amount of the fees and
charges which have accrued but have not been paid to Transporter). Except
as otherwise provided in Section 13 of Part I, Shipper shall not be
responsible for payment to Transporter of amounts in dispute with ▇▇▇▇▇▇▇▇
unless and until receipt and collection thereof. Shipper will obtain any
and all consents to the assignment of its interest to Transporter as may be
required for Transporter to pursue payment and all appropriate legal
remedies with respect thereto. In the event that Shipper has not secured
all such required consents, Shipper will, at Transporter's request and at
no out-of-pocket cost to Shipper, act as the party plaintiff to pursue such
amounts that have accrued in favor of Transporter, such litigation to be
under the sole direction and at the sole cost of Transporter; provided,
however, that to the extent that ▇▇▇▇▇▇▇▇ asserts any claim, counterclaim
or right of offset in any such proceeding brought by or at the direction of
Transporter, and such claim, counterclaim or right of offset does not arise
from any wrongful act or omission by Transporter hereunder, then Shipper
shall be responsible for the costs of defending any such claim,
counterclaim or asserted right of offset and for any judgment obtained by
▇▇▇▇▇▇▇▇ in connection therewith. The parties will take such further
actions, execute such further documents and otherwise cooperate and assist
one another as may be reasonably necessary to give effect to and carry out
the provisions hereof. To the extent that Shipper receives any payment or
recovery from ▇▇▇▇▇▇▇▇ for any amounts which previously caused payments
otherwise due to Transporter hereunder to be withheld, Shipper will
immediately make the corresponding appropriate payment to Transporter.
12. Successors and Assigns. This Agreement shall extend
to and be binding upon the respective successors and
assigns of the parties hereto.
The rights and obligations of a party hereunder shall not be assigned
without the prior written consent of the other party, except that either
party may, without the consent of the other party, assign all of its
interest, rights and obligations hereunder to a parent, an affiliate or
subsidiary or to an entity with which it is merged or consolidated. Consent
to an assignment of the rights and obligations hereunder shall not be
unreasonably withheld.
Nothing contained in this provision shall in any way prevent either party
from pledging or mortgaging its rights hereunder for security of its
indebtedness.
14
Any entity which shall succeed by purchase, merger, consolidation, or
otherwise as Shipper or Transporter herein shall be subject to the duties
and obligations of its predecessor in interest under this Agreement. Any
actual or attempted assignment, transfer or conveyance of this Agreement or
of said duties and obligations shall expressly require that the assignee,
transferee or grantee shall assume and agree to discharge the duties and
obligations of its assignor under this Agreement, and any such actual or
attempted assignment, transfer or conveyance hereof shall be ineffective as
between the parties hereto unless such express requirement shall therein be
contained, and unless each assignee, transferee or grantee shall agree to
impose an identical requirement upon any subsequent assignee, transferee or
grantee. No such assignment, transfer or conveyance of this Agreement or of
any interest of either party herein shall be binding upon the other party
against its wishes until such party has been notified, in writing, of such
assignment, transfer or conveyance and furnished with a true copy of the
same. No such actual or attempted assignment, transfer or conveyance shall
in any way operate to enlarge, alter or modify any obligations of the other
party or parties hereto.
13. Notices. Any notice or communication required or desired to be given to
either party under this Agreement shall be in writing and shall be deemed
to have been effectively given when faxed or mailed by United States
certified mail postage prepaid, to:
TRANSPORTER
NOTICES AND ▇▇▇▇▇▇ Associates, Inc.
CONTRACTS MATTERS: Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Plaza Time Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
PAYMENT AND ▇▇▇▇▇▇ Associates, Inc.
ACCOUNTING MATTERS: Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Plaza Time Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
15
SHIPPER
NOTICES AND Enron Liquids Pipeline
CONTRACT MATTERS: Operating Limited Partnership
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇ (Houston)
915-686-0220 (Midland)
ACCOUNTING MATTERS: Enron Liquids Pipeline
Operating Limited Partnership
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ELPOLP Accounting Dept.
14. Taxes. Shipper shall pay all taxes, levies and
assessments, except income taxes imposed on
Transporter, including without limitation, excise,
severance, sales, and occupation taxes and other
taxes of like nature levied on or in respect to the
Product and the transportation and handling thereof.
Transporter shall pay all ad valorem and property
taxes assessed on its pipeline system. If any new or
additional tax is levied by any governmental
authority after the Effective Date of this Agreement,
Transporter and Shipper agree to negotiate in good
faith the sharing of such tax.
15. Force Majeure. If either party is rendered unable,
wholly or in part, by force majeure to carry out its
obligations hereunder (except obligation herein to
pay the Demand Fee as set forth in Section 13 of Part
I, and except obligations to pay money which have
already been incurred), then upon such party's giving
notice and reasonably full particulars of such force
majeure in writing, or by telex, or by facsimile or
other equivalent means, to the other party within a
reasonable time after the occurrence of the cause
relied on, the obligations of the party giving such
notice, so far as they are affected by such force
majeure, shall be suspended during the continuance of
any inability so caused, but for no longer period,
and such cause shall so far as possible be remedied
with all reasonable dispatch.
The term "force majeure" as used in this Transportation Agreement shall
mean any cause not reasonably within the control of the party claiming
suspension and which, by the exercise of due diligence such party is unable
to prevent or overcome. In addition, such term shall include but not be
limited to: acts of God; acts, omissions or delays in action of federal,
state or local government or any agency thereof; compliance with
enforceable recommendations, rules, regulations or order of any
governmental authority or any office, department, agency or instrumentality
thereof; strikes,
16
lockouts, or other industrial disturbances; acts of the public enemy; wars;
blockades; insurrections; riots; epidemics; landslides; lightning;
earthquakes; fires; storms; floods; high water; washouts; civil
disturbances; explosions, breakage or accident to machinery or pipelines;
freezing of pipelines; and any other causes, whether of the kind herein
enumerated or otherwise, affecting the equipment or property of either
party and not reasonably within the control of the party claiming
suspension. Such term shall likewise include (i) in those instances where
either party hereto is required to obtain servitude's, rights-of-way
grants, permits or licenses to enable such party to perform hereunder, the
inability of such party to acquire or the delays on the part of such party
in acquiring, at reasonable cost and after the exercise of reasonable
diligence, such servitude's, rights-of-way grants, permits or licenses, and
(ii) in those instances where either party hereto is required to furnish
materials and supplies for the purpose of constructing or maintaining
facilities or is required to secure permits or authority from any
governmental agency to enable such party to perform hereunder, the
inability of such party to acquire, or the delays on the part of such party
in acquiring, at reasonable cost and after the exercise of reasonable
diligence, such materials and supplies, permits and authority.
It is understood and agreed that the settlement of strikes or lockouts or
other labor dispute shall be entirely within the discretion of the party
having the difficulty, and that the requirement that any force majeure
shall be remedied with all reasonable dispatch shall not require the
settlement of such dispute by acceding to the demands of an opposing party
when such course is inadvisable in the discretion of the party having the
difficulty.
16. Limitation of Liability. Neither Transporter nor
Shipper shall be liable for any special,
consequential, indirect or punitive damages of any
kind or character arising out of or related to a
breach of this Agreement.
17. Waiver. No waiver by Transporter or Shipper of any
default of the other party under this Agreement shall
operate as a waiver of any subsequent default,
whether of a like or a different character.
18. Headings. The heading of, and index to, the various
Sections of this Agreement are not part of this
Agreement, but are only labels to assist in locating
and reading those Sections and shall be ignored in
construing the terms and provisions thereof.
17
19. Laws and Regulations. This Agreement is subject to the receipt of any
required or appropriate authorization to deliver and transport Product and
is further subject to all present and future valid orders, statutes, rules,
laws, and regulations of any government, court, or regulatory body having
jurisdiction.
20. Termination Upon Default. If either Transporter or
Shipper should default in the performance of any
material obligation imposed hereunder, the other
party may terminate this entire Agreement by giving
written notice to the defaulting party of such
election. The defaulting party shall have one
hundred twenty (120) days after receipt of such
notice in which to remedy such default or to
indemnify the other party to the other party's
reasonable satisfaction in which event this Agreement
shall continue in force and effect. In the event
Shipper defaults in the performance or any material
obligation and if such remedy or indemnity is not
timely made, this Agreement shall, at the end of said
one hundred twenty (120) day period, become null and
void except for (i) Shipper's payment obligation for
transportation services theretofore received by
Shipper, including all accrued monthly minimum
payments (sse Section 9(a) of Part II), (ii)
Shipper's right to assign this Agreement to ▇▇▇▇▇▇▇▇
as specified in Section 15 of Part I, and (iii)
Shipper's continuing obligation to pay the Demand
Fee, to the extent required in Section 13 of Part I.
In the event Transporter defaults in the performance of any material
obligation and if such remedy or indemnity is not timely made, this
Agreement shall, at the end of said one hundred twenty (120) day period,
become null and void except for (i) Shipper's payment obligation for
transportation services theretofore received by Shipper, including all
accrued monthly minimum payments (see Section 9(a) of Part II) and
Shipper's obligation to pay the Demand Fee, to the extent required in
Section 13 of Part I, except to the extent any such payment obligations may
be offset by the amount of damages caused to Shipper by Transporter's
default, or the amounts of claims brought against Shipper as a result of
Transporter's default, including, but not limited to, claims brought by
▇▇▇▇▇▇▇▇ pursuant to the Carbon Dioxide Sale Contract, (ii) Shipper's
receipt of transportation previously paid for, or a refund of such prepaid
amounts, and (iii) Shipper's right to assign this Agreement to ▇▇▇▇▇▇▇▇ as
specified in Section 15 of Part I.
Any such termination shall be without waiver of any remedy to which the
party not in default may be entitled for violation of this Agreement.
18
21. Applicable Law. ALL QUESTIONS CONCERNING THE
VALIDITY OR MEANING OF THIS AGREEMENT OR RELATING TO
THE RIGHTS AND OBLIGATIONS OF THE PARTIES WITH
RESPECT TO PERFORMANCE UNDER THIS AGREEMENT SHALL BE
CONSTRUED AND RESOLVED UNDER THE LAWS OF THE STATE OF
TEXAS EXCEPT TO THE EXTENT SPECIFICALLY REGULATED BY
FEDERAL LAWS, EXCLUDING ONLY ANY RULE OR PRINCIPLE
CONCERNING CONFLICT OF LAWS WHICH MIGHT REFER TO THE
LAWS OF ANOTHER JURISDICTION.
If and to the extent that any court of competent jurisdiction determines it
is impossible to construe any provision of this Agreement consistently with
any law or public policy and consequently holds that provision to be
invalid, such holding shall in no way affect the validity of the other
provisions of this Agreement, which shall remain in full force and effect.
22. Liability and Indemnity. SHIPPER SHALL BE
RESPONSIBLE FOR THE PRODUCT, INCLUDING RISK OF LOSS,
AND ANY CLAIMS, LIABILITIES OR DAMAGE TO PRODUCT
UNTIL THE TIME IT IS DELIVERED TO TRANSPORTER AT THE
ORIGINATION POINT. TRANSPORTER SHALL BE RESPONSIBLE
FOR THE PRODUCT, INCLUDING RISK OF LOSS, AND ANY
CLAIMS, LIABILITIES OR DAMAGE CAUSED TO PRODUCT FROM
THE TIME IT IS DELIVERED TO TRANSPORTER AT THE
ORIGINATION POINT UNTIL THE SAME PASSES THROUGH THE
DESTINATION POINT. THE PARTY RESPONSIBLE FOR THE
CARBON DIOXIDE SHALL INDEMNIFY, DEFEND, AND HOLD
HARMLESS THE OTHER PARTY WITH RESPECT TO ANY CLAIMS
(INCLUDING REASONABLE ATTORNEY FEES AND COURT COSTS),
LIABILITIES OR DAMAGE TO CARBON DIOXIDE WHILE THE
CARBON DIOXIDE IS IN SAID PARTY'S RESPONSIBILITY.
EACH OF THE PARTIES HERETO AGREES THAT IT WILL ASSUME ALL RISK AND
LIABILITY FOR ANY INJURY, INCLUDING DEATH, OR DAMAGES TO PROPERTY (EXCEPT
CARBON DIOXIDE) RESULTING FROM THE CONDUCT OF ITS AGENTS OR EMPLOYEES IN
CONNECTION WITH THE SALE AND PURCHASE OF CARBON DIOXIDE HEREUNDER, AND WILL
SAVE AND HOLD HARMLESS, DEFEND AND INDEMNIFY THE OTHER PARTY FOR ANY AND
ALL LOSSES, SUITS, CLAIMS OR ACTIONS, COSTS, DAMAGES, DEMANDS OR EXPENSES
RESULTING AT ANY TIME FROM ANY AND ALL CAUSES DUE TO ANY ACT OR OMISSION,
INCLUDING ANY NEGLIGENT ACT OR OMISSION, OF EITHER ITSELF OR ITS AGENTS OR
EMPLOYEES. IT IS THE PURPOSE OF THIS PROVISION TO INDICATE THAT EACH PARTY
SHALL BE RESPONSIBLE FOR ITS OWN ACTS AND THE RESULTS THEREOF.
NOTWITHSTANDING ANY PROVISION OF THIS PARAGRAPH 22, WHERE PERSONAL INJURY,
DEATH, OR LOSS OR OF DAMAGE TO PROPERTY RESULTS FROM THE JOINT OR
CONCURRENT, NEGLIGENCE OR WILLFUL MISCONDUCT OF BOTH SHIPPER AND
TRANSPORTER HERETO, THE PARTIES' DUTY OF INDEMNIFICATION SHALL BE IN
PROPORTION TO EACH PARTY'S ALLOCABLE SHARE OF JOINT OR CONCURRENT
NEGLIGENCE
19
OR WRONGFUL MISCONDUCT EVEN IF ONE OF THE PARTIES ARE MORE THAN FIFTY
PERCENT (50%) AT FAULT.
23. Limitation of Liability. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, IN NO EVENT SHALL SHIPPER OR
TRANSPORTER BE LIABLE TO THE OTHER PARTY HERETO FOR
ANY LOST OR PROSPECTIVE PROFITS OR ANY OTHER SPECIAL,
PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR
INDIRECT LOSSES OR DAMAGES (IN TORT, CONTRACT OR
OTHERWISE) UNDER OR IN RESPECT HERETO HOWSOEVER
CAUSED, WHETHER OR NOT ARISING FROM THE SHIPPER'S OR
TRANSPORTER'S SOLE, JOINT OR CONCURRENT NEGLIGENCE.
24. Exhibits. Each exhibit referred to in this Agreement
hereby is incorporated in this Agreement by
reference. All obligations of any party under any
such exhibit shall be considered as obligations under
this Agreement.
25. Amendments. Any modification of terms or amendment
of provisions, either to this Agreement or to its
exhibits, shall become effective only by supplemental
written agreement duly executed by the parties hereto.
26. Entire Agreement. This Agreement, including its
exhibits, contains the entire agreement between the
parties and supersedes all prior or contemporaneous
discussions, negotiations, representations or
agreements relating to the subject matter covered
herein.
27. Compliance with Laws and Regulations. Unless
exempted by Federal law, rule, regulation or order,
the following clauses contained in the Code of
Federal Regulations are incorporated herein by
reference, the full text of which will be made
available upon request: 48 C.F. Sec. 52.222-35
(Disabled and Vietnam Veterans); 48 C.F. Sec.
52.222-36 (Handicapped Workers); 48 C.F. Sec.
52.222-26 (Equal Opportunity); 48 C.F. Sec. 52.219-9
(Utilization of Small and Small Disadvantaged
Business Concerns); 48 C.F. Sec. 52.219-13
(Utilization of Women Owned Business Concerns). Each
party hereto agrees and covenants that none of its
employees or employees of its subcontractors who
provide service pursuant to this Agreement are or
shall be unauthorized aliens as defined in the
Immigration Reform Control Act of 1986.
28. Subsequent Restrictions on Transportation. If at any
time during the term hereof, any governmental
authority having jurisdiction or control over the
parties, their facilities or operations, this
Agreement or any provision thereof, shall take any
action whereby the transportation of Product as
contemplated hereunder or the rates charged therefor
shall be proscribed or subject to conditions or
restrains that in the
20
sole reasonable judgment of the party affected are unduly burdensome to
that party, such party may terminate this Agreement, and neither party
shall have further liability to the other except for (i) Shipper's payment
for transportation services theretofore received by Shipper including all
accrued monthly minimum payments (Section 9(a) of Part II), and (ii)
Shipper's continuing obligation to pay the Demand Fee, to the extent
required in Section 13 of Part I. Any such election to so terminate this
Agreement shall not be made without first contacting the other party in an
attempt to arrive at another accommodation which would leave this Agreement
intact. Such termination shall be effective when ninety (90) days' advance
written notice thereof is received by the other party.
29. Confidentiality. Shipper and Transporter agree that
this Transportation Agreement shall be a confidential
document, the contents of which shall not be
disclosed without the prior written consent of the
other party (which will not be unreasonably withheld)
to third parties except for affiliates and
subsidiaries of Shipper and Transporter, and except
for Shell, Mobil, and ▇▇▇▇▇▇▇▇. Shipper and
Transporter shall have the duty to exercise the same
standard of care with respect to the nondisclosure of
this Agreement as they would exercise with respect to
their proprietary business information.
30. Claims. Transporter shall assert any and every
"Claim" of any kind or nature whatsoever under this
Agreement ("Claim" to include, without limitation,
any Claim relating to, associated with, arising out
of or in any way incidental to the Transportation
of Product or the execution, inducement to enter
into, performance, non-performance, or breach of this
Agreement) exclusively against Shipper and not
against any one or more of its partners nor the
general partner, Enron Liquids Pipeline Company, nor
their officers, directors, employees, or agents nor
entities affiliated with it by common ownership or
control, nor any of them individually or
collectively; and Transporter shall enforce or
attempt to enforce any such Claim (whether liquidated
or unliquidated, or by suit, lien, judgment,
execution or otherwise) exclusively against the
assets of Shipper and not against the assets of any
partner, general partner, affiliated entity, nor any
of their officers, directors, employees or agents,
except the general partner's interest in Shipper.
21
EXHIBIT "A"
Product delivered at the Origination Point shall meet the following
specifications, which herein are collectively called "Quality Specifications":
(a) Water. Product shall contain no free water, and shall not contain more
than thirty (30) pounds of water per MMcf in the vapor phase.
(b) Hydrogen Sulphide. Product shall not contain
more than twenty (20) parts per million, by
weight, of hydrogen sulphide.
(c) Carbon Dioxide. Product shall contain at least
ninety-five mole percent (95%) of molecules
containing one (1) atom of carbon and two (2)
atoms of oxygen.
(d) Total Sulfur. Product shall not contain more
than thirty-five (35) parts per million, by
weight, of total sulfur.
(e) Temperature. Product shall not exceed a
temperature of one hundred twenty degrees
Fahrenheit. (120(degree)F).
(f) Nitrogen. Product shall not contain more than
four mole percent (4%) of nitrogen.
(g) Hydrocarbons. Product shall not contain more than five mole percent
(5%) of hydrocarbons and the dew point of Product (with respect to such
hydrocarbons) shall not exceed minus twenty degrees Fahrenheit
(-20(degree)F).
(h) Oxygen. Product shall not contain more than ten
(10) parts per million, by weight, of oxygen.
(i) Other. Product shall not contain more than 0.3 (three tenths) gallons
of glycol per MMcf and at no time shall such glycol be present in a
liquid state at the pressure and temperature conditions of the
pipeline.