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NATURAL GAS LIQUIDS TRANSPORTATION, FRACTIONATION AND MARKETING AGREEMENT | Document Parties: MARKWEST ENERGY PARTNERS L P | EQUITABLE GATHERING, LLC | MARKWEST ENERGY APPALACHIA, LLC You are currently viewing:
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MARKWEST ENERGY PARTNERS L P | EQUITABLE GATHERING, LLC | MARKWEST ENERGY APPALACHIA, LLC

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Title: NATURAL GAS LIQUIDS TRANSPORTATION, FRACTIONATION AND MARKETING AGREEMENT
Date: 2/29/2008
Industry: Natural Gas Utilities     Sector: Utilities

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Exhibit 10.33

 

Execution Version

 

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPERATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).  APPROXIMATELY FIVE (5) PAGES HAVE BEEN OMITTED FROM ARTICLE 7 AND FROM EXHIBIT D PURSUANT TO THE CONFIDENTIAL TREATMENT REQUEST.

 

NATURAL GAS LIQUIDS TRANSPORTATION, FRACTIONATION AND MARKETING AGREEMENT

 

THIS NATURAL GAS LIQUIDS TRANSPORTATION, FRACTIONATION AND MARKETING AGREEMENT (this “ Agreement ”) is made and entered into this 16th day of November, 2007, by and between EQUITABLE GATHERING, LLC (herein referred to as “ Equitable ”), and MARKWEST ENERGY APPALACHIA, L.L.C. (herein referred to as “ MEA ”).

 

RECITALS:

 

A.            Equitable operates and is acquiring that certain existing gas processing plant and related facilities together with gas compression facilities located in the vicinity of Langley, Kentucky, known as the “ Maytown Plant ”; and

 

B.            Equitable is constructing and installing additional gas processing and gas compression facilities located in the vicinity of Langley, Kentucky, to operate in conjunction with the Maytown Plant, said additional facilities referred to herein as the “ Langley Plant ”;

 

C.            Equitable desires to deliver to MEA and MEA desires to receive from Equitable, natural gas liquids recovered at the Plant (as defined herein), and recovered from other sources, as provided herein, and the parties desire to have such natural gas liquids transported to the Siloam Facility (as defined herein), fractionated into commercial components at the Siloam Facility, and to have such fractionated components marketed and Sold.

 

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereby agree as follows:

 

ARTICLE 1
DEFINITIONS

 

The following definitions shall apply for all purposes of this Agreement unless otherwise indicated:

 

Accounting Period .  The period commencing at 10:00 a.m., Eastern Time, on the first day of a calendar month and ending at 10:00 a.m., Eastern Time, on the first day of the next succeeding month.

 

Affiliate.   When used with respect to a Person, means any other Person that directly or indirectly controls, is controlled by or is under common control with such first Person, where

 



 

control , and its derivatives, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person (whether through majority ownership of securities or partnership or other ownership interests, by contract or otherwise, including, without limitation, through the ownership of the general partner of any partnership).

 

Delivery Point **

 

Effective Date .  The date upon which MEA has transferred and conveyed the Maytown Plant to Equitable.

 

Equitable Group .  Equitable Production Company, Equitable Gathering, LLC, and each current and subsequently created Affiliate of each of them.

 

Equitable Pipeline .  The existing pipeline running from the Plant to the interconnection, near Ranger, West Virginia, with the MEA Pipeline, including any replacement of such pipeline.

 

Fractionated Products .  The component products derived from the fractionation operations at the Siloam Facility.

 

Gathering Area .  The area of gas production and gathering as described in Exhibit B .

 

MEA Pipeline .  The pipeline to transport natural gas liquids running from the point commonly referred to as “Ranger, West Virginia” to the Siloam Facility.

 

Net Sales Price **

 

Person or person . Any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity, or any group comprised of two or more of the foregoing.

 

Plant Products .  Liquid hydrocarbon components (ethane, propane, iso-butane, normal butane, iso-pentane, normal pentane, hexanes plus, any other liquid hydrocarbon product, or any mixtures thereof, and any incidental methane included in any of the foregoing), which are separated, extracted or condensed from natural gas at the Plant.

 

Plant .  The Maytown Plant and the Langley Plant, including (i) any and all gas processing and compression facilities to be installed to replace any of the foregoing or to expand or alter any of the foregoing, all located in the vicinity of Langley, Kentucky; (ii) gas refrigeration and chilling equipment, gas compression and cooling equipment, product separation and fractionation vessels, product storage vessels, and associated condensing, heating, compressing, pumping, conveying, and other equipment and instrumentation; (iii) all existing piping, valves and fittings; including any refrigeration compression required by plant operations; (iv) all control systems and equipment; (v) all measurement and communications equipment; (vi) all utility system; and including all structures associated with those facilities; and (vii) all easements, rights-of-way, and other property rights pertaining to the construction and operation of those facilities wherever those facilities, structures, easements, rights-of-way, and other property rights are located.

 

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Siloam Facility .  MEA’s Siloam fractionation facility located near South Shore, Kentucky, including (i) any treating equipment, products separation and fractionation vessels; (ii) all above ground products storage vessels and all below ground products storage caverns and facilities; (iii) all associated condensing, heating, pumping, conveying, and other equipment and instrumentation; (iv) all structures associated with those facilities; (v) all products loading facilities, including railcar loading, truck loading and barge loading facilities; (vi) all control systems and equipment; (vii) all measurement and communication equipment; (viii) all utility systems, and including all structures associated with those facilities; and (ix) all easements, rights-of-way, and other property rights pertaining to the construction and operation of those facilities wherever those facilities, structures, easements, rights-of-way, and other property rights are located.

 

Sold .   Any physical sale or similar transaction.

 

ARTICLE 2
EQUITABLE COMMITMENTS

 

2.1           (a) As of the Effective Date and subject to the restrictions set forth in this Article 2 and elsewhere in this Agreement, Equitable commits to deliver ** calculated on an average daily basis during an Accounting Period.  **

 

2.2           Nothing herein shall constitute any guarantee or warranty by Equitable of minimum volumes of natural gas delivered to the Plant, or the content of hydrocarbon liquids thereof, or the amount of Plant Products recovered therefrom or that there exists sufficient trucking capacity and/or pipeline capacity to effectuate delivery of the Plant Products and natural gas liquids, as set forth in Section 2.1, to the applicable Delivery Point.

 

2.3           Equitable will operate the Plant in accordance with the standard a prudent operator under similar conditions would operate, and in compliance with applicable laws, rules and regulations.

 

2.4           **

 

2.5           Equitable commits to use commercially reasonable efforts to construct the Langley Plant and to put it in service for use under the terms of this Agreement by **.

 

2.6           In addition, and as a material inducement for MEA to expand its Siloam Facility, Equitable commits to cause itself or an affiliate of Equitable to construct and place into service, within a commercially reasonable time, the replacement for the current Equitable Pipeline, ** (the “ Replacement Equitable Pipeline ”).

 

ARTICLE 3
MEA COMMITMENTS

 

3.1           Subject to the other provisions of this Agreement, as of the Effective Date, MEA shall

 

3



 

(a)                                   Receive the natural gas liquids (inclusive of Plant Products) delivered by Equitable at the applicable Delivery Point, fractionate such Plant Products and natural gas liquids at the Siloam Facility, market (in the manner set forth in Section 7.3 of this Agreement) the fractionated components derived from the Plant Products and natural gas liquids and remit payment to Equitable for such Plant Products and natural gas liquids pursuant to the provisions of Article 7 below.

 

(b)                                  As of the Effective Date:

 

(i)                                      MEA shall arrange for fractionation at the Siloam Facility and pipeline transportation from the point where the Replacement Equitable Pipeline interconnects with MEA’s liquid line (collectively, the “ Capacity ”) of up to a maximum of ** gallons, on any day, of Plant Products and natural gas liquids delivered by Equitable hereunder; provided, however, MEA shall not be responsible to provide such pipeline transportation until such time as the Replacement Equitable Pipeline is placed into service, or at such time that Equitable has the ability to deliver natural gas liquids (inclusive of Plant Products) to the ** through a partially completed Replacement Equitable Pipeline, it being understood that any such commitment on the part of MEA is subject to the terms herein (including but not limited to Article 4 and Article 5) and MEA’s ability to meet any regulatory or safety requirements with regards to operating the MEA Pipeline.  Equitable will give MEA at least 30 days advance written notice prior to commencing deliveries to **; provided, however, such deliveries to ** may not commence prior to **.

 

(ii)                                   MEA shall arrange for trucking and provide capacity for truck unloading at the Siloam Facility of up to a maximum of ** gallons, on any day, of Plant Products and natural gas liquids delivered by Equitable hereunder.

 

(c)                                   Prior to the commencement of operations of the Replacement Equitable Pipeline, MEA will arrange truck transportation, and Equitable will cooperate and coordinate deliveries with MEA, as to delivery of Plant Products and natural gas liquids to the Siloam Facility by truck transportation in quantities above the applicable volumes set forth in Section 3.1(b)(ii) above and Section 3.1(d) below, as MEA, in its sole and reasonable discretion, determines it can accommodate at the Siloam Facility.  **

 

(d)                                  Notwithstanding anything to the contrary herein, MEA will have the following available capacities at the Siloam Facility for truck unloading and for fractionation of Plant Products and natural gas liquids by the following dates:

 

(i)                                      ** gallons per day by **; and

 

(ii)                                   ** gallons per day by ** (“ First Expansion Date ”).

 

4



 

(e)                                   By ** (“ Second Expansion Date ”), MEA shall provide Capacity for a total of ** gallons per day of Plant Products and natural gas liquids delivered by Equitable hereunder through the Replacement Equitable Pipeline.

 

(f)                                     MEA may accelerate the First Expansion Date to no earlier than ** (and such earlier date shall be referred to as the “ Early First Expansion Date ”); and may accelerate the Second Expansion Date to no earlier than ** (“ Early Second Expansion Date ”).  If either of the foregoing Early Expansion Dates will become effective, due to MEA providing the capacities required before the applicable Expansion Date, MEA will give written notice to Equitable of the completion of the expansion to provide the applicable capacity and the applicable Early Expansion Date will be effective two days following such notice.

 

(g)                                  MEA commits to expand the MEA Pipeline and Siloam Facility as necessary to provide an additional ** gallons per day of Capacity over that provided pursuant to 3.1(e) above, for Plant Products and natural gas liquids delivered by Equitable hereunder, on the following terms and conditions:

 

(i)                                      Equitable shall have the right to request incremental additional Capacity







 
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