HomeMy WebLinkAboutResolution - 3400 - Contract - Adobe Gas Pipeline Company - Natural Gas Boiler Fuel - 06_14_1990 (2)Resolution #_ 3400
June 14, 1990
Item #38
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RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock a Contract by
and between the City of Lubbock and Adobe Gas Pipeline Company for natural gas
boiler fuel, attached herewith, which shall be spread upon the minutes of the
Council and as spread upon the minutes of this Council shall constitute and be
a part of this Resolution as if fully copied herein in detail.
Passed by the City Council this 14th day of
F.11110s
APPROVED/AS TO CONTEND:
ne`Eads, Purchasing Manager
APPROVED AS TO FORM:
,Harold i ar , Assistant City
,Attorney
June , 1990.
B. C. Mc N, AYOR
GAS PURCHASE AGREEMENT
BETWEEN
POWER-TEX JOINT VENTURE
SELLER
AND
CITY OF LUBBOCK
BUYER
DATED: June 14, 1990
K 3Af°o
TABLE OF CONTENTS
ARTICLE
TITLE PAGE
I
DEFINITIONS................................2
II
PRELIMINARY ACTS OF PARTIES................3
III
VOLUMES....................................3
IV
QUALITY....................................3
V
POINT OF DELIVERY AND PRESSURE.............3
VI
MEASUREMENT................................4
VII
PRICE AND BILLING ..........................7
VIII
TAXES......................................7
IX
REGULATORY BODIES ..........................7
X
FORCE MAJEURE ..............................8
XI
REPRESENTATIONS AND INDEMNIFICATIONS ....... 8
XIITERM
.......................................9
XIII
MISCELLANEOUS ..............................9
SIGNATURE PAGE .............................9
GAS PURCHASE AGREEMENT
This Agreement made and entered into this 14th day of June, 1990,
by and between Power -Tex Joint Venture, hereinafter called Seller, and
the City of Lubbock, hereinafter called Buyer:
WHEREAS, Seller represents that it has or will have available for
sale to the City of Lubbock adequate supplies of natural gas; and,
WHEREAS, the City of Lubbock desires to enter into this Agreement
to purchase natural gas from the Seller, said gas to be used by the
Buyer for the purpose of providing fuel for the generation of
electricity at its Plant 2 Site; and,
WHEREAS; the Seller has made a firm offer as to the quantity of gas
to be made available and the price to be charged for said gas; and,
WHEREAS; the City of Lubbock deems it to be in its best interest to
accept said offer providing for firm pricing and quantities of natural
gas.
NOW THEREFORE, for and in consideration of the foregoing and in
further consideration of the mutual Agreements herein contained, the
parties hereto agree as follows:
I. DEFINITIONS
For the purposes of this contract, unless the context of the
instrument requires otherwise, the following definitions shall be
applicable:
1.01 "Gas" shall mean natural gas produced from gas wells, and gas
produced in association with oil.
1.02 "Day" shall mean the 24-hour period commencing at 7:00 a.m. local
time on one calendar day and ending at 7:00 a.m. local time on the
next succeeding calendar day.
1.03 "Month" shall mean the period beginning at 7:00 a.m. local time on
the first day of a calendar month and ending at 7:00 a.m. local
time on the first day of the succeeding calendar month.
1.04 "Accounting Period" shall mean any twelve (12) month period
beginning from date of initial delivery during the term of this
Contract.
1.05 "MCF" shall mean one thousand (1,000) cubic feet of gas and "MMCF"
shall mean one million (1,000,000) cubic feet of gas.
1.06 "BTU shall mean British thermal units measured at 14.65 psia, sixty
degrees Fahrenheit (60 deg. F), and water vapor measured as
delivered.
1.07 "MMBTU" shall mean one million (1,000,000) BTU.
1.08 "Psia" shall mean pounds per square inch, absolute.
1.09 "Psig" shall mean pounds per square inch, gauge.
II. PRELIMINARY ACTS OF PARTIES
2.01 It is further agreed between the parties hereto that the primary
purpose of this Agreement is to provide a sufficient and adequate
supply of natural gas to Buyer for use by it in the generation of
electricity at its Plant 2 Generation Plant.
III. VOLUMES
3.01 Buyer agrees to purchase during the term of this Agreement the
following quantities of natural gas:
(a) Commencing on the date of initial delivery, Buyer agrees to
receive and purchase, or pay for approximately 30,000 MCF.
Said amount of natural gas will be required generally
between the dates of June 15, through September 30,
480.. Daily usage is not expected to exceed 1,800 MCF.
IV. QUALITY
All gas delivered by Seller to Buyer under this Contract shall be
of such quality that it conforms to the specifications required by
third -party transporting pipelines, with such specifications being
subject to mutual agreement between Buyer and Seller in accordance with
Article II hereof.
V. POINT OF DELIVERY AND PRESSURE
5.01 The Point of Delivery for all gas purchased and sold pursuant
hereto shall be at a point into the Lubbock Energas distribution
system.
5.02 Seller shall construct, equip, maintain and operate all facilities
necessary to deliver Seller's gas to Buyer at the Point of
Delivery or bear responsibility for same.
Gas delivered by Seller to Buyer under this contract shall have a
heat content no greater than One thousand one hundred and twenty (1120)
British Thermal Units per MCF and said gas shall have a heat content not
less than Nine hundred and eighty (980) British Thermal Units per MCF.
5.03 All gas delivered by Seller to Buyer at the aforementioned Point of
Delivery shall be at pressures as required by Energas for receipt
into its system.
5.04 Seller shall be in control and possession of the gas sold and
purchased hereunder and responsible for any damage or injury
caused thereby until the same shall have been delivered to Buyer
at the Point of Delivery.
5.05 Buyer shall be in control and possession of the gas sold and
purchased hereunder and responsible for any damage or injury
caused thereby after the same shall have been delivered at the
Point of Delivery.
VI. MEASUREMENT
6.01 The Unit of Volume for measurement of gas delivered hereunder shall
be one (1) cubic foot of gas at a base temperature of sixty
degrees Fahrenheit (60 deg. F) and at an absolute pressure of
fourteen and sixty-five hundredths pounds per square inch (14.65
psi), and otherwise as provided by the Standard Gas Measurement
Law of the State of Texas (Article 6066b of Vernon's Texas Civil
Statutes). Except as provided by that law, all fundamental
constants, observations, records, and procedures involved in
determining and/or verifying the quantity and other
characteristics of gas delivered hereunder shall, unless otherwise
specified herein, be in accordance with the standards prescribed
in Report No. 3 of the American Gas Association, as now and from
time to time amended or supplemented. All measurements of gas
shall be determined by calculation into terms of such unit. All
quantities given herein, unless expressly stated, are in terms of
such unit.
6.02 Seller or its designee shall at its own expense install, maintain
and operate, or cause to be installed, maintained and operated,
the necessary measuring station at the Point of Delivery. Said
measuring station shall be so equipped with orifice meters,
recording gauges, or other types of meters of standard make and
design commonly acceptable in the industry, as to accomplish the
accurate measurement of gas delivered hereunder. The changing of
charts and calibrating and adjusting of meters shall be done by
Seller or its designee.
6.03 Buyer may at its option install check meters downstream of Seller's
measuring station for checking Seller's metering equipment; and
the same shall be so installed as not to interfere with the
operation of Seller's or its designee's facilities.
6.04 The temperature of the gas shall be determined by the continuous
use of a recording thermometer installed by Seller or its designee
so that it will properly record the temperature of the gas flowing
through the meter. The temperature recorded each day during the
time that gas was actually flowing through the meter shall be used
in computing measurement for that day.
6.05 The specific gravity of the gas shall be determined by Seller or
Seller's designee by continuous or from composite sample, or more
often, at Seller's election, by means elected by Seller which are
approved by the American Gas Association as set forth in its Gas
Measurement Manual. Specific gravities so determined will be used
in calculating gas deliveries for the day on which the test is
made, and for all following days until the next specific gravity
test is made.
6.06 The heat content of the gas shall be determined by Seller or its
designee by taking samples of gas at Seller's meter. Determination
of BTU content will be performed by an impartial third party
testing company. The result shall be applied to gas deliveries for
the month when the sample is taken. Such samples shall be taken
continuously or by composite sample, at Sellers election. The BTU
content per cubic foot shall be determined in accordance with
Article 1.06 hereof.
6.07 Each party shall have the right to be present at the time of any
installing, reading, cleaning, changing, repairing, inspecting,
testing, calibrating, or adjusting done in connection with the
other's measuring equipment used for measuring deliveries
hereunder. The records from such measuring equipment shall remain
the property of their owner, but upon request, each will submit to
the other its records and charts, together with calculations
therefrom, subject to return within fifteen (15) days after
receipt thereof, after which the charts shall be kept on file for
a period of two (2) years.
At least once each quarter, Seller or its designee shall calibrate
the meter(s) and instruments or cause the same to be calibrated. Seller
shall give Buyer sufficient notice in advance of such tests so that
Buyer may, at its election, be present in person or designate its
representative to observe adjustments, if any, which are made. For the
purpose of measurement and meter calibration, the atmospheric pressure
shall be assumed to be thirteen and two -tenths pounds per square inch
(13.2 psi), irrespective of variations in natural atmospheric pressure
from time to time.
6.08 1f upon any test the metering equipment in the aggregate is found
to be inaccurate by two percent (2%) or more, registration thereof
and any payment based upon such registrations shall be corrected
at the rate of such inaccuracy for any period of inaccuracy which
is definitely known or agreed upon, or if not known or agreed
upon, then for a period extending back one-half (1/2) of the time
elapsed since the last day of the calibration, not exceeding,
however, forty-five (45) days. Following any test, any metering
equipment found to be inaccurate to any degree shall be adjusted
immediately to measure accurately. If for any reason any meter is
out of service or out of repair so that the quantity of gas
delivered through such meter cannot be ascertained or computed
from the readings thereof, the quantity of gas so delivered during
such period shall be estimated and agreed upon by the parties
hereto upon the basis of the best available data, using the first
of the following methods which is feasible:
(a) By using the registration of any check measuring equipment of
Buyer, if installed and registering accurately;
(b) By correcting the error if the percentage of error is
ascertainable by calibration, test, or mathematical
calculation; or,
(c) By estimating the quantity of deliveries by deliveries during
preceding periods under similar conditions when the meter
was registering accurately.
6.09 The measurement hereunder shall be corrected for deviation from
Boyle's Law at the pressure and temperature under which gas is
delivered hereunder.
VII PRICE AND BILLING
7.01 Commencing on the date of initial deliveries of gas hereunder and
continuing for the specified term, the first day of the month
succeeding such initial delivery date, Buyer shall pay Seller a
price of $1.77 (June delivery), $1.85 (July delivery), $1.90
(August delivery), $1.90 (September delivery) per MMBTU as per
seller's proposal dated June 1, 1990.
7.02 After delivery of gas has commenced, or payments are due under the
terms of this Contract, Seller shall, on or before the fifteenth
(I5th) day of each month, render to Buyer a statement showing the
quantity of gas delivered the previous month and Buyer will on the
25th day of such month, pay Seller the amount due for all such
gas.
7.03 Each party hereto shall have the right at all reasonable times to
examine the books and records of the other party to the extent
necessary to verify the accuracy of any statement, charge,
computation, or demand made under or pursuant to this Contract.
Any statement shall be final as to both parties unless questioned
within two (2) years after payment thereof has been made.
VIII. TAXES
Seller hereby agrees that it will be responsible for and pay all
existing excise, severance, production, sales, occupation, and other
taxes of like nature levied in respect to the gas and handling thereof
in existence and levied on the date of the Ist delivery of gas to Buyer
under this contract. Buyer agrees that save and except as to those taxes
Seller has heretofore agreed to pay to reimburse Seller for any and all
new taxes levied upon the gas and handling thereof not in existence upon
the date of Ist delivery of gas to Buyer under this Agreement and to
further reimburse Seller for any and all increases in excise, severance,
production, sales, occupation and other taxes of like nature over the
amount Seller has heretofore agreed to absorb and pay. Both parties
agree that Federal Income Taxes paid by Seller shall not be considered
taxes of a like nature under this contract.
IX REGULATORY BODIES
This Contract is subject to all present and future valid laws and
lawful orders of all regulatory bodies now or hereafter having
jurisdiction of the parties or either of them; and should either of the
parties, by force of any such
law or regulation imposed at any time during the term of this Contract,
e rendered unable, wholly or in part, to carry out its obligations
under this Contract, other than to make payments due hereunder, the
Contract shall continue nevertheless and shall then be deemed modified
to conform with the requirements of such law or regulation.
X. FORCE MAJEURE
In event of either party hereto being rendered unable, wholly or in
part, by force majeure to carry out its obligations under this Contract,
other than to make payments for gas delivered and received hereunder, it
is agreed that on such party's giving notice and full particulars of
such force majeure in writing or by telegraph to the other party as soon
as possible after the occurrence of the cause relied on, then 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 as
far as possible be remedied with all reasonable dispatch.
The term "force majeure" as employed herein shall mean acts of God,
strikes, lockouts, or other industrial disturbances, acts of the public
enemy, wars, blockades, insurrection, riots, epidemics, landslides,
lightning, earthquakes, fires, storm, floods, washouts, arrest and
restraints of governments and people, civil disturbances, explosions,
breakage, accidents and/or maintenance to machinery, lines of pipe,
freezing of wells or lines of pipe, partial or entire failure of wells.
It is understood and agreed that the settlement of strikes or lockouts
shall be entirely within the discretion of the party having the
difficulty, and that the above requirement that any force majeure shall
be remedied with all reasonable dispatch shall not require the
settlement of strikes or lockouts by acceding to the demands of opposing
party when such course is inadvisable in the discretion of the party
having the difficulty.
XI. REPRESENTATIONS AND INDEMNIFICATIONS
Seller hereby represents that it has authority to commit to this
Contract the gas to be sold and delivered hereunder. Seller agrees to
indemnify Buyer and save it harmless from all suits, actions, debts,
accounts, damages, costs, losses and expenses arising from or out of
adverse claims of any and all persons, firms, or corporations to said
gas or to royalties, overriding royalties, taxes, license fees, or
charges thereon, which are applicable before title to the gas passes to
Buyer.
XII. TERM
12.01 The primary term hereof shall be for the term specified commencing
on the date of initial deliveries hereunder.
XIII. MISCELLANEOUS
13.01 No waiver by either Seller or Buyer of any default of
the other under this Contract shall operate as a
waiver of future default, whether of like or different
character or nature.
13.02 This Contract shall be binding upon and inure to the
benefit of the successors and assigns, or the heirs,
administrators, or executors of the parties hereto.
Any party hereto may assign his or its right, title,
and interest in, to and under this Contract,
including, without limitation, any and all renewals,
extensions, amendments, and/or supplements hereto to
any individual, bank, trustee, company or corporation
as security for any note, notes, bonds, or other
obligations or securities of such assignor; provided,
however, that no such assignment shall be made without
the prior written consent of the other party, which
consent shall not be unreasonably withheld. Any such
assignment shall in no way operate to enlarge, alter,
or change any obligation of the other party or parties
hereto.
13.03 Seller expressly does not by the terms of this
Contract sell, transfer, or assign unto Buyer any
title or interest whatsoever, in Seller's pipe,
meters, lines or other equipment of any nature owned
or used by Seller in the operation of its system.
13.04 All notices, presentments and other correspondence
provided for herein, or arising herefrom shall be in
writing, and shall be deemed to have been delivered
when deposited in the United States Mail, postage
prepaid, and addressed to the appropriate party as
indicated:
Seller: Power -Tex Joint Venture
c/o Adobe Gas Co.
300 W. Texas
Suite 1100
Midland, TX 79701
Buyer: The City of Lubbock
P.O. Box 2000
Lubbock, TX 79457
or to such other single name and address as either party may, by
written notice, designate to the other.
13.05 The parties hereto agree and confirm that in the
consideration and interpretation of this Contract same
shall be construed under the laws of the State of
Texas, and this Contract was prepared by all parties
hereto and not by any party to the exclusion of the
other or others.
13.06 No modification of the terms and provisions of this
Agreement shall be or become effective except pursuant
to and upon the due and mutual execution of an
appropriate supplemental written Contract by the
parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and date first herein above written in multiple
originals, each of which shall constitute and be an original Contract.
SELL CITY OF LUBBOCK-BUYER
BY: E BY:
If Mayor
ATTEST:
C
City Secretary
OVED AS TO FORM: ,
5 , City Attorney
ADOBE
GAS PIPELINE
COMPANY
June 1, 1990
Mr. Gene Eads, C.P.M.
Purchasing Manager
City of Lubbock
Municipal Building
1625 13th Street, Room L-04
Lubbock, Texas 79401
Re: Natural Gas Supply
LP&L Plant #2
Gentlemen:
3 Y66
Subsidiaries:
Adobe Gas Marketing Co.
Adobe Gas Gathering & Processing Co.
Adobe Gas Co.
The Seller in compliance with your invitation for proposal for
NATURAL GAS BOILER FUEL having carefully examined the
specifications and all related agreement documents and being
familiar with all of the conditions surrounding the supply of
natural gas to Buyer's Plant 2 generation facility; hereby
proposes to supply natural gas boiler fuel as per the following:
Month of
June, 1990
July, 1990
August, 1990
September, 1990
Price
$1.77 per MMBtu
$1.85 per MMBtu
$1.90 per MMBtu
$1.90 per MMBtu
In lieu of the above and if Buyer so desires, Seller proposes to
supply Plant 2 requirements at the same price and under the same
conditions as the Holly Avenue Plant "Excess Gas" as determined
month -to -month.
Seller understands that Buyer reserves the right to reject any
and all proposals and to waive any formality in the process.
The Seller agrees that this proposal shall be good and may not be
withdrawn for a period of thirty (30) calendar days after the
scheduled closing time for receiving bids.
300 West Texas, Suite 1100 • Midland, Texas 79701-4548 • (915) 683-4701
A Wholly Owned Subsidiary Of Adobe Resources Corporation
X 3 yea
Mr. Gene Eads, C.P.M.
June 1, 1990
Page 2
The undersigned Seller hereby declares
examined the specifications and agreement
the items covered by this proposal, and
supply natural gas as specified herein.
that he has carefully
documents pertaining to
he further agrees to
Power -Tex Joint Venture
"Seller"
By: 'Alf
F ;eman, Authorized Agent