You are here: Agreements > Lease Agreement > PIPELINE LEASE AGREEMENT

Try our advanced search >>
CLAUSES Search Contract Clauses >>
Browse Contract Clause Library>>

Pipeline Lease Agreement

Lease Agreement

Legal Documents
You are currently viewing:

 This Lease Agreement involves


. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Governing Law: Texas     Date: 5/11/2005
Industry: Oil and Gas Operations     Sector: Energy

join now
50 of the Top 250 law firms use our Products every day




THIS PIPELINE LEASE AGREEMENT ("Agreement") is made and entered into this

22nd day of January, 2001 ("Effective Date"), by and between Chevron Pipe Line

Company, a Delaware corporation ("Lessor"), and Fin-Tex Pipe Line Company, a

Texas corporation ("Lessee").

WHEREAS, Lessor owns a pipeline, commonly referred to as the Big Spring to

Midland Products Pipeline System, located in the Counties of Howard, Martin, and

Midland in the State of Texas; and

WHEREAS, Lessee desires to lease the Big Spring to Midland Products

Pipeline System, said pipeline being more particularly identified in Exhibit "A"

attached hereto and incorporated herein ("Pipeline"); and

WHEREAS, Lessor is willing, subject to the conditions contained herein, to

lease the Pipeline to Lessee.

NOW, THEREFORE, in consideration of the mutual covenants and obligations

herein made, and other good and valuable consideration, the receipt of which is

hereby acknowledged, Lessor and Lessee agree as follows:


Unless sooner terminated as provided in Section 8, Lessor agrees to lease

said Pipeline for a term of five (5) years, beginning on January 28, 2001,

and ending on January 28, 2006 ("Term").


Lessee shall pay to Lessor as rent for the use of the Pipeline the sum of

Five Hundred Thousand Dollars ($500,000) per year ("Annual Fee"). On the

15th, day of January, 2001, Lessee shall pay the Annual Fee to Lessor at

the address set forth herein. Subsequent Annual Fees shall be due on

January 15th, of each year during the term of the Lease.


a) Lessor, for and in consideration of the rents, covenants, and premises

contained in this Lease and to be kept and observed by Lessee, does hereby

lease and demise to Lessee, and Lessee does hereby lease and accept from

Lessor the Pipeline, together with all rights, privileges, easements,

appurtenances and other interests belonging to or in any way pertaining

thereto, subject, however, to the exceptions and reservations hereinafter

set out.

b) The Pipeline shall be used for the transportation of petroleum products,

including, but not limited to refined petroleum products or liquified

petroleum gas. The parties agree that the Pipeline will not be used for

the transportation of crude oil.


c) Lessee agrees to comply with all laws, statutes, ordinances and

governmental rules, regulations or requirements now in force or which may

hereafter be in force, relating, to, or arising from the use of the

Pipeline. In addition, Lessee agrees to comply with the terms and

conditions of all right-of-way agreements, franchises, or other agreements

affecting the Pipeline. If Lessee receives notice of the violation of any

such law, statute, ordinance, or governmental rule, regulation or

requirement, it shall promptly notify Lessor thereof.

d) In complying with the above-referenced laws and agreements, Lessee agrees

to conduct such tests, file such reports, and take all actions necessary

to be in compliance with all applicable State, Federal and local laws and

regulations. Lessee also agrees to furnish to Lessor results of all tests

and, at Lessor's request, from time to time other information, such as

operating pressure and inspection reports, pertaining to the use of the


e) Lessor reserves the right to audit Lessee's records that pertain to

Lessee's operation and maintenance of the Pipeline.

f) Lessee shall, at its expense, operate and maintain the Pipeline, make all

repairs, replacements, inspections and improvements thereto as required by

federal, state, and/or local regulations as well as good industry

practices, except for cathodic protection monitoring and rectifier

current. So long as this Lease is in force, Lessee shall monitor the

Pipeline for any leaks and shall repair and remediate, at Lessee's

expense, all leaks and damages, including all environmental damages,

resulting or arising from or in any way in connection with the Pipeline.

All additions, replacements, and/or repairs shall conform to Lessor's

standards of pipeline design and construction. Lessee shall provide Lessor

prior advance notice of any planned addition or replacement to the

Pipeline. Lessor shall have the right to review all design and

construction plans related to the Pipeline. Lessor's review of said

designs and construction plans shall in no way relieve Lessee of any

liability arising, out of any additions or replacements. Lessee shall have

the right to make emergency repairs to the Pipeline without the consent of

the Lessor so long as such repairs conform to federal, state, and/or local

regulations as well as good industry practice. In the event Lessee makes

such emergency repairs, Lessee agrees to notify Lessor of such repairs as

soon as practical thereafter.

g) Any alterations required by governmental agencies (such as casing

extensions and replacements for highway alterations) will be the complete

responsibility of Lessee.

h) Lessee shall be responsible for all responsibilities and liabilities

associated with any leaks, spills or discharges of petroleum products or

other contaminants from the Pipeline which occur during the term of this

Lease. Lessee's responsibilities and liabilities include its

responsibilities to comply with all State, Federal, and local laws and

regulations regarding the reporting or remediation of any leak, spill or

discharge from the Pipeline. Lessee shall further be liable for all costs

and expenses relating to any leak, spill or discharge of petroleum

products or other contaminants from the Pipeline during the term of the

Lease, including, but not limited to remediation costs and expenses.

Lessee shall



promptly notify Lessor of any spill, leak or discharge of hydrocarbons

from the Leased pipeline during the term of this Lease.


It is understood and agreed that Lessor's Lease of the Pipeline is made



PURPOSE and that this Lease is made only insofar as the Lessor has a legal

right to lease an interest in the rights-of-way over which the Pipeline

extends under the terms and conditions of the right-of-way agreements

under which Lessor now holds. Lessor is not conveying any interests in

real property, including but not limited to, any fee or leasehold interest

in the lands above, beneath, or adjacent to the Pipeline, except the

non-exclusive right to occupy and use such lands pursuant to and in

accordance with the right of way agreements held by Lessor pertaining to

the Pipeline.

Notwithstanding the above, Lessor hereby represents and warrants that it

is the owner of the Pipeline and that, to the best of Lessor's belief and

information, Lessee, on paying, the rent and other charges herein provided

for and observing, and keeping, the covenants, conditions, and terms of

this Lease on Lessee's part to be kept or performed, shall lawfully and

quietly hold, utilize, and enjoy the Pipeline so long as this Lease

remains in force without hindrance or molestation of Lessor or any person

claiming, under Lessor.


a) Lessee shall keep the Pipeline free from any liens arising, from any

work performed, materials furnished, or obligations incurred by or at

the request of the Lessee. All persons either contracting with Lessee

or furnishing or rendering, labor and materials to Lessee shall be

notified in writing by Lessee that they must look only to Lessee for

payment for any labor and materials.

b) If any lien is filed against the Pipeline or Lessee's leasehold

interest therein, Lessee shall discharge it within ten (10) days after

Lessee learns that a lien has been filed. If Lessee fails to discharge

any Lien within such period, then, in addition to any other right or

remedy of Lessor, Lessor may, at its election, discharge the lien by

either paying the amount claimed to be due or obtaining the discharge

by deposit with a court or

continue to document