1. business and industrial
2. energy
3. natural gas

Gas Supply Agreement
Annex-E of RFP (Exhibit IV)
GAS SUPPLY AGREEMENT
BY AND BETWEEN
[Titas Gas Transmission and Distribution Company Ltd.]
AND
[NAME OF COMPANY]
- RELATING TO A [[INSERT CAPACITY]] MW (NET) POWER GENERATION FACILITY
AT
KALIAKOIR HITECH PARK, GAZIPUR, BANGLADESH
Dated as of
i
Gas Supply Agreement
ii
Gas Supply Agreement
TABLE OF CONTENTS
SECTION 1: DEFINITIONS AND INTERPRETATION ................................................................................ 2
1.1
Definitions ............................................................................................................................... 2
1.2
Interpretation ......................................................................................................................... 12
SECTION 2: TERM OF AGREEMENT ...................................................................................................... 13
2.1
Term...................................................................................................................................... 13
2.2
Extension of Term ................................................................................................................. 13
SECTION 3:
3.1
3.2
3.3
3.4
3.5
3.6
PURCHASE AND SUPPLY .................................................................................................. 14
Purchase and Supply............................................................................................................ 14
Contract Entitlement ............................................................................................................. 14
Pre-Commissioning Period Purchases ................................................................................. 14
Commissioning Period and Commercial Delivery Period ..................................................... 15
Receipt of Gas ...................................................................................................................... 15
Failure at Point of Delivery.................................................................................................... 15
SECTION 4:
4.1
4.2
4.3
4.4
4.5
4.6
4.7
OPERATING PROCEDURES .............................................................................................. 16
Estimated Deliveries ............................................................................................................. 16
Telephone Notification .......................................................................................................... 16
Preparation of Operating Procedures ................................................................................... 16
Operating Procedures Amendments..................................................................................... 18
Conflict with Agreement ........................................................................................................ 18
Notice of Construction Schedule........................................................................................... 18
Commissioning and Testing of Company’s Facilities ........................................................... 18
SECTION 5:
5.1
5.2
5.3
5.4
5.5
5.6
TRANSPORTATION FACILITIES......................................................................................... 19
Specifications and Standards ............................................................................................... 19
Construction of Transportation Facility ................................................................................. 21
Governmental Authorisations................................................................................................ 20
Ownership and Costs............................................................................................................ 20
Commissioning and Testing of Transportation Facilities ...................................................... 21
Information for Environmental Impact Study......................................................................... 21
SECTION 6: WARRANTY OF GAS SUPPLY............................................................................................ 22
6.1
Warranty of Gas Supply........................................................................................................ 22
SECTION 7:
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
7.10
MEASUREMENT .................................................................................................................. 23
Regulating and Metering Station........................................................................................... 23
Meter Readings..................................................................................................................... 23
Measurement ........................................................................................................................ 23
Accuracy of Equipment ......................................................................................................... 24
Alternate Measurement Determination ................................................................................. 24
Operating Procedures for Determination of Higher Heating Value....................................... 25
Equipment Testing ................................................................................................................ 25
Inspection.............................................................................................................................. 25
Company’s Check Meters..................................................................................................... 25
Meter Verification, Calibration and Sealing........................................................................... 25
SECTION 8:
8.1
8.2
8.3
QUALITY, QUANTITY AND DELIVERY PRESSURE .......................................................... 27
Conformance with Gas Specifications .................................................................................. 27
Rejection of Non-Conforming Natural Gas ........................................................................... 27
Acceptance of Non-Conforming Natural Gas ....................................................................... 27
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Gas Supply Agreement
SECTION 9:
9.1
9.2
9.3
GAS PRICE AND PAYMENTS ............................................................................................. 28
Payments for Gas ................................................................................................................. 28
Price Adjustment ................................................................................................................... 29
Change in Price, Index or Rate............................................................................................. 29
SECTION 10: INVOICING AND PAYMENT .............................................................................................. 30
10.1
Monthly Invoicing .................................................................................................................. 30
10.2
Delivery of Invoices ............................................................................................................... 30
10.3
Posting and Payment............................................................................................................ 30
10.4
Method of Payment ............................................................................................................... 30
10.5
Late Payments ...................................................................................................................... 30
10.6
Payment Disputes ................................................................................................................. 30
10.7
Suspension of Deliveries ...................................................................................................... 31
10.8
Estimated Invoicing ............................................................................................................... 31
10.9
Invoicing Errors ..................................................................................................................... 31
10.10
Liquidated Damages ............................................................................................................. 32
SECTION 11: RISK OF LOSS, TITLE, INDEMNIFICATION AND INSURANCE ...................................... 39
11.1
Risk of Loss and Title............................................................................................................ 39
11.2
Indemnification ...................................................................................................................... 39
11.3
Indemnification for Fines and Penalties................................................................................ 40
11.4
Defence of Claims................................................................................................................. 40
11.5
Notice of Proceedings........................................................................................................... 41
11.6
Settlement ............................................................................................................................. 41
11.7
Double Jeopardy ................................................................................................................... 41
11.8
Insurance .............................................................................................................................. 42
SECTION 12: REPRESENTATIONS, WARRANTIES AND COVENANTS .............................................. 43
12.1
By the Gas Supplier .............................................................................................................. 43
12.2
By the Company.................................................................................................................... 44
SECTION 13: CURTAILMENT, INTERRUPTION AND SHUTDOWN ...................................................... 47
13.1
Permitted Interruption by Gas Supplier................................................................................. 47
13.2
Notice of Facility Outages ..................................................................................................... 47
13.3
Coordination.......................................................................................................................... 47
SECTION 14: FORCE MAJEURE ............................................................................................................. 48
14.1
Definition of Force Majeure................................................................................................... 48
14.2
Notification Obligation ........................................................................................................... 49
14.3
Excuse From Performance ................................................................................................... 50
14.4
Duty to Mitigate ..................................................................................................................... 51
14.5
Termination as a Result of Force Majeure............................................................................ 51
SECTION 15: GOVERNMENTAL RULES AND REGULATIONS ............................................................. 52
15.1
No Challenge or Contest....................................................................................................... 52
SECTION 16: ASSIGNMENT AND SECURITY ........................................................................................ 53
16.1
Assignment ........................................................................................................................... 53
16.2
Creation of Security .............................................................................................................. 53
16.3
Assignment to the GOB ........................................................................................................ 54
SECTION 17: NOTICES ............................................................................................................................ 55
17.1
Addresses ............................................................................................................................. 55
17.2
Method of Delivery ................................................................................................................ 55
17.3
Changes................................................................................................................................ 55
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Gas Supply Agreement
SECTION 18: TERMINATION FOR DEFAULT ......................................................................................... 56
18.1
Company Events of Default .................................................................................................. 56
18.2
Gas Supplier Event of Default............................................................................................... 57
18.3
Termination Notices .............................................................................................................. 58
18.4
Termination of Agreement .................................................................................................... 58
18.5
Remedies .............................................................................................................................. 58
18.6
Notice to the Lenders of the Company’s Default .................................................................. 59
18.7
Obligations Upon Termination .............................................................................................. 61
SECTION 19: DISPUTE RESOLUTION .................................................................................................... 62
19.1
Resolution by Parties ............................................................................................................ 62
19.2
Mediation by Expert .............................................................................................................. 62
19.3
Arbitration.............................................................................................................................. 64
19.4
Commercial Acts ................................................................................................................... 66
19.5
Sovereign Immunity; Jurisdiction .......................................................................................... 67
SECTION 20: CONFIDENTIALITY ............................................................................................................ 68
20.1
Confidential Information ........................................................................................................ 68
20.2
Exceptions............................................................................................................................. 68
SECTION 21: MISCELLANEOUS ............................................................................................................. 69
21.1
No Waiver ............................................................................................................................. 69
21.2
Third Parties.......................................................................................................................... 69
21.3
Titles and Headings .............................................................................................................. 69
21.4
Governing Law ...................................................................................................................... 69
21.5
Severability............................................................................................................................ 69
21.6
Entire Agreement .................................................................................................................. 69
21.7
Special Damages .................................................................................................................. 69
21.8
Relationship of the Parties .................................................................................................... 69
21.9
No Unlawful Commissions .................................................................................................... 70
21.10
Amendment of Project Agreements ...................................................................................... 70
21.11
Language .............................................................................................................................. 70
21.12
Successors and Assigns....................................................................................................... 70
21.13
Counterparts ......................................................................................................................... 70
21.14
Comments/Vetting................................................................................................................. 70
ANNEXURE A
ANNEXURE B
ANNEXURE C
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Gas Supply Agreement
THIS GAS SUPPLY AGREEMENT (this “Agreement”) is entered into as of this ____ day of
[insert month and year], in Dhaka, Bangladesh
BY AND BETWEEN
Titas Gas Transmission and Distribution Company Ltd., with its registered office located at Dhaka,
Bangladesh (a wholly-owned subsidiary company of Petrobangla), and hereinafter referred to as the “Gas
Supplier”, which expression wherever the terms so admit or imply includes its successors, representatives
or assigns;
AND
[Name of Company], with its registered office located at [insert location], Dhaka, Bangladesh, and
hereinafter referred to as the “Company”, which expression wherever the terms so admit or imply includes
its successors, representatives and permitted assigns.
RECITALS
WHEREAS, the Company has agreed to design, engineer, manufacture, finance, construct, complete,
permit, test, commission, insure, own, operate and maintain a Dual Fuel (HFO/Gas) fired electric power
generation facility with a capacity of approximately [insert capacity] MW (net, at Reference Site
Conditions), near Kaliakoir Hitech Park, Gazipur, Bangladesh;
WHEREAS, the Company is a party to an Implementation Agreement, a Power Purchase Agreement and
a Land Lease Agreement (all as hereinafter defined);
WHEREAS, the Gas Supplier is the authorised and licensed distributor of Gas (as hereinafter defined)
within its franchise territory and within which the Facility (as hereinafter defined) is located in Bangladesh;
WHEREAS, the Company desires to purchase and the Gas Supplier is willing to supply Gas for use at
the Facility to generate Net Energy Output (as hereinafter defined) for sale to BPDB (as hereinafter
defined), under and pursuant to the terms and conditions in the Power Purchase Agreement; and
WHEREAS, the Company has agreed to construct, test and commission the Transportation Facilities (as
hereinafter defined) and thereafter to transfer the Transportation Facilities to the Gas Supplier.
NOW, THEREFORE, in consideration of the mutual benefits and covenants contained herein, the Gas
Supplier and the Company hereby agree as follows:
1
Gas Supply Agreement
SECTION 1: DEFINITIONS AND INTERPRETATION
1.1
Definitions
Whenever the following capitalised terms appear in this Agreement, including the annexures hereto,
whether in the singular or the plural, past, present or future or tense, they shall have the meanings given
to such terms below:
Provided, that any engineering unit or abbreviation used in this Agreement, and not defined herein, shall
be defined in accordance with the definitions of the American Petroleum Institute or, in the absence of
such definition, by accepted usage under the standards and practices of the oil and gas industry of the
United States of America and any reference to internationally accepted standards of good industry
practice, internationally accepted engineering standards or similar terms shall mean the standards and
practices generally used by the oil and gas industries of North America and Europe:
“Agent” bears the meaning ascribed thereto in Section 18.6(b);
“Agreement” means this Gas Supply Agreement between the Company and the Gas Supplier, together
with all Annexures attached hereto, dated as of the date first above written, as may be amended by the
Parties from time to time;
“Annual Gas Threshold Amount” means, with respect to any Contract Year, a quantity is to be inserted
that is equal to 50% of the Annual Contract Quantity MSCF of Gas;
Provided, that the Annual Gas Threshold Amount for any Contract Year shall be reduced (or in the case
of clause (e), adjusted), MSCF for MSCF:
(a)
for any Gas not delivered by the Gas Supplier and requested in a Gas Order due to a
failure of the Gas Supplier to perform as required under this Agreement;
(b)
for any Gas not delivered by the Gas Supplier during an interruption of Gas supply
permitted under Section 13.1 that was indicated by the Company to be required during
any period of interruption in the most recent estimate or Gas Order relating to the period
of non-delivery delivered by the Company pursuant to Section 4.3;
(c)
for any Gas rejected by the Company pursuant to Section 8.2;
(d)
for any Gas not delivered by the Gas Supplier as a result of a Force Majeure Event
experienced by the Gas Supplier that was indicated by the Company to be required
during such period in the most recent estimate or Gas Order relating to the period of nondelivery delivered by the Company pursuant to Section 4.3;
(e)
for any adjustments to the Daily Contract Quantity pursuant to Section 3.2(b);
(f)
for the period starting from the Required Commercial Operations Date and ending on the
Commercial Operations Date (if any), by the amount of Gas equal to the product of:
(xx)
the Maximum Hourly Quantity; and
(yy)
the sum total (in hours) of the period of delay measured in hours in achieving the
Commercial Operations Date beyond the Scheduled Commercial Operations
Date caused by non-performance or delays by the Gas Supplier hereunder or by
BPDB under the Power Purchase Agreement or the Land Lease Agreement; and
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Gas Supply Agreement
(g)
after the Commercial Operations Date, for the Gas amounts indicated to be required by
the Company in the most recent estimate or Gas Order pursuant to Section 4.3 and not
accepted by the Company during any period when the Company is affected by a Political
Force Majeure Event, a Change in Law and/or an event referred to in Section 14.1
(c)(i)(D);
“Average Gas Price” bears the meaning ascribed thereto in Section 10.10(b)(i)(7);
“Bangladesh Bank” means the bank established under Article 3 of the Bangladesh Bank Order, 1972
(P.O. No. 127 of 1972) for the purpose of carrying on the business of central banking and also includes its
successors;
“Bank Rate” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“BPDB” means the Bangladesh Power Development Board constituted under the Bangladesh Water and
Power Development Boards Order, 1972 (P.O. No. 59 of 1972) and its successors and permitted assigns;
“Btu” means British thermal unit, defined as the quantity of heat required to raise the temperature of one
(1) pound of pure water from fifty-eight and one-half degrees Fahrenheit (58.5° F) to fifty-nine and onehalf degrees Fahrenheit (59.5° F) at a constant pressure of fourteen and seventy-three hundredths
(14.73) psia;
“Business Day” means any Day that is not (a) a Day on which banks in Bangladesh are legally permitted
to be closed for business (including partial Days), and (b) an official holiday declared by the GOB;
“Capacity Payment” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“Carrying Cost” means the interest accruing on the then-outstanding principal amount of the debt
incurred to construct the Facility and the Transportation Facilities under the Financing Documents and
any guarantee fees accruing thereunder;
“Centre” bears the meaning ascribed thereto in Section 19.3(a);
“Certification Date” means the date as of which the Transportation Facilities Interconnection Committee
certifies in writing that the Facility is ready to commence the Commercial Operations Test and there is no
reason to believe that the Facility would not successfully pass such tests, and that such tests are being
delayed due only to the Gas Supplier’s failure to deliver Gas as required under this Agreement;
“Change in Law” means:
(a)
the adoption, promulgation, amendment, modification, repeal or reinterpretation after
___________, 20101 by any Government Authority of any Law of Bangladesh, or
(b)
the imposition by a Government Authority of any material condition in connection with the
issuance, renewal, extension, replacement or modification of any Government
Authorisation after ___________, 20102:
that in either case establishes requirements for the construction, operation or maintenance of the Facility
that are materially more restrictive or more onerous than the most restrictive or most onerous
requirements (x) in effect under the Laws of Bangladesh on ___ ___________3, 2010 and (y) agreed to
by the Company in any agreement in the Security Package;
1
Insert date of bid.
Insert date of bid.
3
Insert date of bid.
2
3
Gas Supply Agreement
“Check Metering System” bears the meaning ascribed thereto in Section 7.9;
“Commercial Delivery Payment” means the amount, as provided in Part 3 of Annexure A, to be paid by
the Company to the Gas Supplier during the Commercial Delivery Period for Gas actually delivered by the
Gas Supplier to, and received by the Company, at the Point of Delivery pursuant to the terms and subject
to the conditions of this Agreement;
“Commercial Delivery Period” means the period of time that begins on the Commercial Delivery Start
Date and ends on the Expiry Date;
“Commercial Delivery Start Date” means the earlier of (a) the Required Commercial Operations Date
and (b) the Commercial Operations Date;
“Commercial Operations Date” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Commercial Operations Test” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Commissioning” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“Commissioning Period” means the period of time, if any, that begins on the Commissioning Period
Start Date and ends at 12:00 midnight on the Day that precedes the Commercial Delivery Start Date;
“Commissioning Period Payment” means the amount, as provided in Part 2 of Annexure A, to be paid
by the Company to the Gas Supplier for Gas actually delivered by the Gas Supplier to, and received by
the Company before and during the Commissioning Period at, the Connection Point or the Point of
Delivery, as the case may be, pursuant to the terms and subject to the conditions of this Agreement;
“Commissioning Period Start Date” means the later of:
(a)
the date on which the Company first declares that at least one unit of the Facility is
substantially complete and the Facility or any Gas consuming part thereof is ready for
testing and initial Gas deliveries hereunder may commence, and
(b)
the Scheduled Commissioning Period Start Date;
“Company” means [Name of Company], a [public] limited company incorporated under the Laws of
Bangladesh, with its principal offices located in _____________, Bangladesh, and its successors and
permitted assigns;
“Company Communication Facilities” means all the necessary communication equipment (including
cabling) owned, installed, operated and maintained by the Company at its own cost and risk, between the
Facility and the interface terminals provided by the Gas Supplier at the Gas Metering System, required for
receiving and recording Gas data (for avoidance of doubt, such equipment shall only be capable of
receiving data without interfering with the operation of the Gas Metering System) collected and measured
by the Gas Metering System;
“Company Event of Default” bears the meaning ascribed thereto in Section 18.1;
“Company Termination Notice” bears the meaning ascribed thereto in Section 18.2;
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Gas Supply Agreement
“Company Transportation Facilities” means all of the gas pipeline, valves and equipment, compatible
with the Transportation Facilities at the Point of Delivery, to be installed by or on behalf of the Company
and to be owned by the Company, which pipeline, valves and equipment are necessary to interconnect
the Facility with the Transportation Facilities at the Point of Delivery;
“Connection Point” means the Gas Supplier’s outlet for the supply of Gas;4
“Construction Contract” means the agreement(s) entered into between the Company and the
Construction Contractor(s) for the design, engineering, procurement, construction, completion, start-up,
testing, and Commissioning of the Facility, and also includes any amendment to such agreement(s) made
from time to time;
“Construction Contractor(s)” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Contracted Facility Capacity” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Contract Year” means (a) in respect of the first Contract Year, the period commencing at the beginning
of the Commercial Operations Date and ending as of the end of the Day immediately preceding the first
anniversary of the Commercial Operations Date and (b) thereafter, the period commencing at the
beginning of each consecutive anniversary of the Commercial Operations Date and ending as of the end
of the Day preceding the next anniversary of the Commercial Operations Date;
“Contractor(s)” means the Construction Contractor(s) and the O&M Contractor(s) and any of their direct
sub-contractor(s) integrally involved in the Project;
“Convention” bears the meaning ascribed thereto in Section 19.3(a);
“Daily Contract Quantity” means [insert Gas quantity] MSCF of Gas per Day, assuming a Higher
Heating Value of 950 Btu per SCF, as such quantity may be adjusted in accordance with Section 3.2(b);
“Day” means the twenty-four (24) hour period beginning and ending at 12:00 midnight Bangladesh
Standard Time;
“Delay Lost Energy” bears the meaning ascribed thereto in Section 10.10(b)(i)(4);
“Dependable Capacity” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Dispute” means any dispute, difference or disagreement of any kind whatsoever between the Gas
Supplier and the Company in connection with or arising out of this Agreement, including, without
limitation, any dispute or difference concerning the existence, validity or enforceability of this Agreement
or any provision hereof;
“Dollars” or “US$” means the lawful currency of the United States of America;
“Due Date” bears the meaning ascribed thereto in Section 10.3;
“Election Notice” bears the meaning ascribed thereto in Section 18.6(d)(ii);
4
Gas Supplier to review and confirm if this description is correct.
5
Gas Supply Agreement
“Energy Payment” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“Engineer” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“Environmental Guidelines” means the environmental guidelines and occupational health and safety
standards of the World Bank Group or any Internationally accepted Environmental Guideline as in effect
on [insert date],5 2010;
“Equivalent Forced Outage Hours” bears the meaning ascribed thereto in Section 10.10(b)(i)(1);
“Equivalent Maintenance Outage Hours” bears the meaning ascribed thereto in Section 10.10(b)(i)(3);
“Equivalent Scheduled Outage Hours” bears the meaning ascribed thereto in Section 10.10(b)(i)(2);
“Escalable Capacity Payment” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Escrow Account” bears the meaning ascribed thereto n Section 1 of the Implementation Agreement;
“Estimated Quantity” bears the meaning ascribed thereto in Section 4.1(b);
“Evaluation Period” bears the meaning ascribed thereto in Section 18.6(d)(i);
“Event of Default” means a Company Event of Default or a Gas Supplier Event of Default, as the case
may be;
“Expert” means an expert appointed pursuant to and under Section 19.2(a);
“Expiry Date” means the date upon which the Power Purchase Agreement expires or terminates;
“Facility” means the Dual Fuel (HFO/Gas) fired power station, capable of between [insert Capacity] MW
and [insert Capacity] MW of capacity (net, without supplemental firing, at Reference Site Conditions) to be
owned and constructed by the Company at Kaliakoir Hitech Park, Gazipur, Bangladesh, whether
completed or at any stage of its construction, including without limitation or regard to level of
development, the land, engineering and design documents and Construction Contract, all energy
producing equipment and its auxiliary equipment and all transmission facilities on the Company’s side of
the Delivery Point, water intake and discharge facilities (if any), water treatment facilities, solid waste
disposal facilities, dual fuel (HFO/Gas) receiving and handling facilities and equipment on the Company’s
side of the Point of Delivery, the Metering System, the Electrical Interconnection Facilities, together with
the residential facilities (if any) made available to certain employees of the Company, the Contractor(s)
and any subcontractors;
“Financial Closing” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“Financial Closing Date” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Financing Documents” means the loan agreements, notes, indentures, security agreements,
guarantees, and other documents relating to the construction and permanent financing (including
refinancing) of the Facility and any material part thereof executed in accordance with Section 9.3 of the
Implementation Agreement;
5
Insert date of bid.
6
Gas Supply Agreement
“FM Factor” means one (1) minus B:
Where B is equal to:
(i)
in the case where during a Force Majeure Event declared by the Company the
Facility is capable of partial operation, a fraction the numerator of which is the
Dependable Capacity determined by testing under the Power Purchase
Agreement as soon as practicable after declaration of such Force Majeure Event,
and the denominator of which is the Dependable Capacity prevailing immediately
prior to the occurrence of the Force Majeure Event, or
(ii)
in the case where during a Force Majeure Event declared by the Company the
Facility is not capable of operation, zero;
“Force Majeure Event” bears the meaning ascribed thereto in Section 14.1;
“Force Majeure Outage” bears the meaning ascribed thereto in Section 10.10(b)(i)(5);
“Forced Outage” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“Foreign Investors” means shareholders of the Company who are foreigners or non-residents of
Bangladesh holding dual nationalities;
“Gas” means Natural Gas that is tendered for delivery and sale under this Agreement by the Gas Supplier
to the Company having a Higher Heating Value of not less than 900 Btu (HHV) per Standard Cubic Foot
and in full conformance with the Gas Specifications, and any Natural Gas not in full conformance with the
Gas Specifications which the Company accepts pursuant to Section 8.3;
“Gas Metering System” means:
(a)
orifice meter runs, straightening vanes, valves, gauges, pressure and temperature
recorders, and other appurtenances necessary to accurately measure (within the limits
provided in Section 7.4) the volumetric quantities,
(b)
one or more gas chromatographs, flow computers, and other appurtenances necessary
to accurately measure the Btu (HHV) content of Gas delivered and sold to the Company
under this Agreement, and
(c)
equipment and apparatus necessary to measure the quality of Gas for parameters
comprising the Gas Specification, all to be designed, constructed and installed in the
Regulating and Metering Station;
“Gas Order” means a communication from the Company to the Gas Supplier setting forth the quantities
of Gas planned to be required by the Facility on an hourly basis during any Day under the Operating
Procedures agreed to by the Gas Supplier and the Company pursuant to Section 4; provided, that a Gas
Order shall not constitute an obligation by the Company to receive and purchase the quantity of Gas
specified therein on any given Day;
“Gas Price” bears the meaning ascribed thereto in Annexure A;
“Gas Specifications” means together, the Quality Specifications and the Pressure Specifications as
shown in Annexure B;
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Gas Supply Agreement
“Gas Supplier” means Titas Gas Transmission and Distribution Company Ltd, a public limited company
incorporated and registered under the Laws of Bangladesh, with its principal offices located in Dhaka,
Bangladesh, and its successors and permitted assigns;
“Gas Supplier Event of Default” bears the meaning ascribed thereto in Section 18.2;
“Gas Supplier Termination Notice” bears the meaning ascribed thereto in Section 18.1;
“GOB” means the Government of the People’s Republic of Bangladesh;
“Government Authorisations” means all such approvals, consents, authorisations, acknowledgments,
licenses or permits required to be issued by any Government Authority to the Company for the
establishment of the Company or to the Company or the Contractor(s) for the construction, financing,
ownership, operation, and maintenance of the Facility by the Company or the Contractor(s), including
without limitation those Government Authorisations listed in Schedule 1 of the Implementation
Agreement;
“Government Authority” means:
(i)
the GOB or any entity subject to the overall control or direction as to matters of policy of
the GOB or which is otherwise under and controlled by the GOB, including without
limitation, but only for so long as they are under the control of the GOB, BPDB, PGCB,
and the Gas Supplier;
(ii)
any local governmental authority or any subdivision of any of the foregoing;
(iii)
any Bangladesh court or tribunal with jurisdiction over the Company, the Facility, the
Contractor(s), the Lenders or the Project or any part thereof; and
(iv)
any department, authority, regulatory agency, instrumentality, agency, body or
corporation or other entity controlled by any of the foregoing;
“Higher Heating Value” or “HHV” means the number of Btu produced by the complete combustion, at
constant pressure, of the amount of gas which would occupy a volume of one (1) cubic foot at a
temperature of sixty degrees Fahrenheit (60°F), saturated with water vapor and at a constant pressure of
14.73 psia and under standard gravitational force (acceleration 980.665 centimeters per second) with air
of the same temperature and pressure as the gas, when the products of combustion are cooled to the
initial temperature of the gas and air and when the water formed by combustion is condensed to the liquid
state. The heating value so determined shall be corrected from the conditions of testing to that of the
actual condition of the Gas as delivered (including the conversion from saturated to actual water vapor
conditions) expressed in Btu per SCF;
“ICC Rules” bears the meaning ascribed thereto in Section 19.3(b);
“ICSID Rules” bears the meaning ascribed thereto in Section 19.3(a);
“Implementation Agreement” means the Implementation Agreement, executed on [insert execution
date], between the GOB and the Company in connection with the Project, and also includes any
amendment of it made by the parties thereto from time to time;
“Incremental Costs” bears the meaning ascribed thereto in Section 19.3(c);
“Initial Cure Period” bears the meaning ascribed thereto in Section 18.6(a);
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Gas Supply Agreement
“Initial Delivery Date” bears the meaning ascribed thereto in Annexure A;
“Internationally Accepted Standards” means the standards and practices generally used by the oil and
gas industries of North America and Europe, as in effect from time to time;
“Invoice Dispute Notice” bears the meaning ascribed thereto in Section 10.6(a);
“Land Lease Agreement” means the agreement executed on [insert execution date], between BPDB
and the Company for the lease of land by BPDB to the Company for the location of the Facility, as may
be amended from time to time by the parties thereto;
“Lapse of Consent” means any Government Authorisation:
(a)
ceasing to remain in full force and effect; or
(b)
not being issued or renewed upon application having been properly and timely made and
diligently pursued; or
(c)
being made subject, subsequent to its grant, upon renewal or otherwise, to any terms or
conditions that materially and adversely affect the Company’s ability to perform its
obligations under any document included within the Security Package,
in each of the above instances despite the Company’s compliance with the applicable procedural and
substantive requirements as applied in a “non-discriminatory” (as explained in Section 2.1(a)(vi) of the
Implementation Agreement) manner;
“Laws of Bangladesh” means, in relation to this Agreement, all laws in force in Bangladesh, and includes
all rules, regulations, orders, directives, notifications made or issued by any Government Authority with
authority over the Company, the Facility or the Project pursuant to or under any such law, and any decree
or judicial decision given or pronounced by any court of competent jurisdiction in Bangladesh;
“Lenders” means the financial institutions that are parties to the Financing Documents, together with their
respective successors and assigns;
“Lenders Cure Period” bears the meaning ascribed thereto in Section 18.6(e);
“Loss” means any loss, damage, liability, payment, claim, action, cost, penalty or obligation (excluding
any profit or any indirect or consequential loss, damage, liability, payment, obligation, claim, action, cost
or penalty), and all expenses (including without limitation reasonable legal fees) related thereto;
“Maintenance Outage” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Maximum Hourly Quantity” means [insert gas quantity] MSCF of Gas per hour, assuming a Higher
Heating Value of [insert heating value] Btu per SCF, as such quantity shall be adjusted under Section
3.2(b);
“Metering System” bears the meaning ascribed thereto in Section 1 of the Power Purchase Agreement;
“Month” means a calendar month according to the Gregorian calendar;
“MSCF” means one thousand (1,000) Standard Cubic Feet;
“Natural Gas” means any mixture of hydrocarbons or of hydrocarbons and other gases, in a gaseous
state, consisting primarily of methane, carbon dioxide and nitrogen, and including casinghead gas
produced with crude oil, natural gas from gas-wells and residue gas resulting from processing of
casinghead or gas-well gas;
9
Gas Supply Agreement
“Net Energy Output” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“O&M Contractor(s)” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Operating Procedures” bears the meaning ascribed thereto in Section 4.3;
“Ordinary Share Capital” bears the meaning ascribed thereto in Section 1 of the Implementation
Agreement;
“Other Force Majeure Events” bears the meaning ascribed thereto in Section 14.1(c);
“Parties” means both the Gas Supplier and the Company;
“Party” means either the Gas Supplier or the Company, as the case may be;
“PGCB” means the Power Grid Company of Bangladesh, Ltd, and its successors or assigns;
“Point of Delivery” means the outlet flange of the RMS located immediately downstream of the RMS and
at the boundary of the Site, where the Gas shall be delivered by the Gas Supplier to the Company under
this Agreement;
“Political Force Majeure Event” bears the meaning ascribed thereto in Section 14.1(a);
“Power Purchase Agreement” means the agreement, executed on [insert execution date], between the
Company and BPDB for the sale by the Company to BPDB of Dependable Capacity and Net Energy
Output from the Facility, and also includes any amendment of it made from time to time by the parties
thereto;
“Pressure Specifications” means the delivery pressure specifications for Gas delivered to the Company
by the Gas Supplier hereunder as set forth in Annexure B;
“Price Determining Authority” bears the meaning ascribed thereto in Annexure A;
“Price Notification Period” bears the meaning ascribed thereto in Annexure A;
“Principal Payments” bears the meaning ascribed thereto in Section 10.10(a)(i);
“Project” means the development, design, engineering, manufacture, financing, construction, permitting,
start-up, testing, completion, insurance, Commissioning, ownership, operation and maintenance of the
Facility, and all activities incidental thereto;
“Project Agreements” means, collectively, this Agreement, the Implementation Agreement, the Land
Lease Agreement and the Power Purchase Agreement;
“Project Effective Date” means the date on which the last of the Project Agreements is executed (except
GSA) and delivered by each of the parties thereto and none of the agreements so executed have
terminated or been terminated by a party thereto;
“Protected Assets” bears the meaning ascribed thereto in Section 19.5(a)(i);
10
Gas Supply Agreement
“Prudent Utility Practices” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“psia” means pounds per square inch absolute;
“psig” means pounds per square inch gauge;
“Published Gas Price” bears the meaning ascribed thereto in Section 9.1(b);
“Quality Specifications” means the quality specifications for Gas delivered at the Point of Delivery to the
Company by the Gas Supplier hereunder as set forth in Annexure B;
“Reference Heat Rates” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Reference Site Conditions” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Regulating and Metering Station” or “RMS” means a station, to be designed, procured, installed and
equipped by the Company conforming to the description in Annexure C, located at the location shown in
Annexure C (immediately adjacent to the Site) for measuring the volume, Btu (HHV) content and the
quality (for all parameters included in the Gas Specification) and controlling the pressure of Gas delivered
to the Company under this Agreement, which station shall include, without limitation, the Gas Metering
System, and pressure control devices and related works;
“Relevant Failure” bears the meaning ascribed thereto in Section 10.10(a)(i);
“Required Financial Closing Date” bears the meaning ascribed thereto in Section 1 of the Power
Purchase Agreement;
“Required Commercial Operation Date” meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“SCF” or “Standard Cubic Foot” means a volume of gas that occupies one cubic foot at an absolute
pressure of 14.73 pounds per square inch and a temperature of sixty (60) degrees Fahrenheit, without
adjustment of water vapour content, but correction factors for pressure, temperature, specific gravity,
deviations from Boyle’s Law and Charles’ Law, expansion and Reynold’s number, manometer, Orifice
Thermal Expansion, and Gauge Location Factors, etc., specified in the relevant American Gas
Association report, shall be applied. The value of atmospheric pressure for calculating the pressure
factor shall be 14.73 pounds per square inch and value of acceleration due to gravity shall be 32.174 feet
per second squared;
“Scheduled Commercial Operations Date” meaning ascribed thereto in Section 1 of the Power
Purchase Agreement;
“Scheduled Commissioning Period Start Date” means the date that is thirty (30) Days following the
completion of the installation of the RMS;
“Scheduled Outage” bears the meaning ascribed thereto in Section 1 of the Power Purchase
Agreement;
“Security Package” bears the meaning set forth in Section 1 of the Implementation Agreement;
“Commercial Operation Date” – means the date following the Day on which the Facility is
Commissioned at the Contracted Capacity or, if Commissioned at less than the Contracted Capacity,
liquidated damages have been paid by the Company for the Dependable Capacity less than the
Contracted Capacity as provided in Section 8.2 of the PPA
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Gas Supply Agreement
“Succession Notice” bears the meaning ascribed thereto in Section 16.2(c);
“Taka” or “Tk.” means the lawful currency of Bangladesh;
“Term” bears the meaning ascribed thereto in Section 2.1;
“Termination Notice” means a Gas Supplier Termination Notice or a Company Termination Notice, as
the case may be;
“Threshold Level” bears the meaning ascribed thereto in Section 10.10(b)(i)(6);
“Transferee” bears the meaning ascribed thereto in Section 16.2(d);
“Transportation Facilities” means that portion of the pipeline capacity and related facilities, including the
RMS, as described in Annexure C, which are required to provide service to the Facility from the
Connection Point at ..................................... including all necessary interconnection facilities, to the Point
of Delivery to be financed, designed, constructed, and commissioned by the Company and transferred to
the Gas Supplier prior to or on the Scheduled Commissioning Period Start Date at no cost to the Gas
Supplier;
“Transportation Facilities Interconnection Committee” means a committee comprised of two (2)
members from the Gas Supplier and two (2) members from the Company, and the Engineer, which the
Parties shall take all actions reasonably necessary to form within fifteen (15) Days of delivery of a notice
requesting the formation of such committee by either Party. If for any reason the Transportation Facilities
Interconnection Committee is not formed within such fifteen (15) Day period, the Engineer shall act as the
sole member of the Transportation Facilities Interconnection Committee and make any determination and
deliver any certificate which is to be made or delivered by the Transportation Facilities Interconnection
Committee hereunder;
“World Bank” means the International Bank for Reconstruction and Development having its head office in
Washington D.C., United States of America; and
“Year” means each twelve (12) Month period commencing on 12:00 midnight on December 31 and
ending on 12:00 midnight the following December 31, Bangladesh Standard Time, during the Term.
1.2
Interpretation
In this Agreement,
(a)
the headings are for convenience only and shall be ignored in construing this Agreement;
(b)
the singular includes the plural and vice versa;
(c)
references to Articles, Sections, Annexures and Schedules are, unless stated to the
contrary, references to Articles and Sections of, and Annexures and Schedules to, this
Agreement;
(d)
the words “include”, “including” and “in particular” shall be construed as being by way of
illustration or emphasis only and shall not be construed as, nor shall they be given the
effect of, limiting the generality of any preceding words;
(e)
unless otherwise expressly provided herein, whenever a consent or approval is required
by one Party from the other Party, such consent or approval shall not be unreasonably
withheld or delayed; and
(f)
in carrying out their obligations and duties under this Agreement each Party shall have an
implied obligation of good faith.
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Gas Supply Agreement
SECTION 2: TERM OF AGREEMENT
2.1
Term
The term of this Agreement, hereinafter referred to as the “Term” shall commence on the Project
Effective Date and shall continue, subject to the other provisions of this Agreement, for a period
that ends on the Expiry Date.
2.2
Extension of Term
Not later than the thirteenth (13th) anniversary of the Commercial Operations Date and unless this
Agreement has been terminated prior to such date, at the request of either Party, the Company
and the Gas Supplier agree to enter into good faith negotiations for a renewal of this Agreement
on terms and conditions mutually agreed to by the Parties. If the Parties fail to agree on the
terms and conditions on which this Agreement will be extended, this Agreement shall stand
terminated on the Expiry Date. Upon such termination Section 18.7 shall apply.
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Gas Supply Agreement
SECTION 3: PURCHASE AND SUPPLY
3.1
Purchase and Supply
Subject to Section 3.2 and the Operating Procedures to be developed pursuant to Section 4, and
the other provisions of this Agreement:
3.2
3.3
(i)
the Company shall purchase from the Gas Supplier, and the Gas Supplier shall
sell to the Company, all of the Facility’s requirements for Gas during the Term, to
the extent of the Maximum Hourly Quantity and the Daily Contract Quantity; and
(ii)
except as expressly set forth herein, all such Gas delivered and sold hereunder
shall conform in all respects to the Gas Specifications. The Company irrevocably
agrees that the Company shall not at any time during the Term be permitted to
use any Natural Gas other than Gas delivered by the Gas Supplier to generate
Net Energy Output at the Facility, except if and to the extent that Gas is not
available at the Point of Delivery from the Gas Supplier in the quantities (as
adjusted under Section 3.2(b)) required herein.
Contract Entitlement
(a)
From and after the Commissioning Period Start Date, the Gas Supplier shall have
available and deliver at the Point of Delivery the quantity of Gas, up to the Maximum
Hourly Quantity, requested by the Company in its Gas Orders issued under the Operating
Procedures; provided, in no event shall the amount of Gas that the Gas Supplier is
obligated to deliver to the Company hereunder during any Day exceed the Daily Contract
Quantity. Further, the Gas Supplier shall use reasonable efforts available to it under the
circumstances to deliver at the Point of Delivery the quantity of Gas in excess of the Daily
Contract Quantity requested by the Company in its Gas Orders issued under the
Operating Procedures; provided, further, that the delivery of such additional quantity of
Gas is under the Laws of Bangladesh. Notwithstanding the foregoing or anything
elsewhere herein, in no event shall the Gas Supplier be in breach of its obligations or
have any liability to the Company under this Section 3.2 or under Section 3.3 until the
occurrence of the Commissioning Period Start Date.
(b)
The volumes specified in the Maximum Hourly Quantity and Daily Contract Quantity and
the calculation of the Commissioning Period Payments in Annexure A and the
Commercial Delivery Payments are based on the assumption that Gas will have a Btu
content of 950 Btu (HHV) per Standard Cubic Foot. If the Btu content of the Gas
delivered to the Company during any Day is more or less than 950 Btu (HHV) per
Standard Cubic Foot, the Gas Supplier and the Company agree that the Daily Contract
Quantity and Maximum Hourly Quantity shall be adjusted to offset the difference in the
Btu content of the Gas delivered and 950 Btu (HHV) per SCF to deliver the equivalent of
the Daily Contract Quantity and Maximum Hourly Quantity at 950 Btu (HHV) per
Standard Cubic Foot.
Pre-Commissioning Period Purchases
On any Day prior to the Commissioning Period Start Date that the Company notifies the Gas
Supplier that the Transportation Facilities or any other portion of the Facility is ready for testing,
after receiving such notice, the Gas Supplier shall make available to the Company at the
Connection Point (in the case of any testing of the Transportation Facilities or at the Point of
Delivery (in the case of any testing of the remainder of the Facility) the quantity (as adjusted
under Section 3.2(b)) of Gas requested by the Company in its Gas Orders issued under the
Operating Procedures. The price for all Gas delivered to the Facility at the request of the
Company in accordance with its Gas Orders prior to the Commissioning Period Start Date
pursuant to this Section 3.3 shall be the price of Gas applicable to the Commissioning Period.
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Gas Supply Agreement
3.4
Commissioning Period and Commercial Delivery Period
Except as may otherwise be provided herein, from and after the Commissioning Period Start Date
and through the Commercial Delivery Period, the Gas Supplier shall supply to the Company Gas
in the quantities (as adjusted under Section 3.2(b)) and meeting the specifications provided for in
this Agreement. Subject to the foregoing sentence:
(a)
from and after the later of:
(i)
the date on which the Gas Supplier is first able to perform its Gas delivery
obligations hereunder; and
(ii)
the date on which the Company first requests and accepts Gas for the testing
and commissioning of the Facility and the Transportation Facilities pursuant to
Section 3.3,
the Company shall be obligated to commence payment of the Commissioning Period
Payments and thereafter through the Commissioning Period the Company shall pay the
Commissioning Period Payments, as specified in Part 2 of Annexure A.
(b)
from and after the later of:
(i)
the date on which the Gas Supplier is first able to perform its Gas delivery
obligations hereunder; and
(ii)
the Commercial Delivery Start Date,
the Company shall be obliged to commence payment of the Commercial Delivery
Payments and thereafter the Company shall pay throughout the Commercial Delivery
Period, the Commercial Delivery Payments, as specified in Part 3 of Annexure A.
3.5
Receipt of Gas
From and after the Commissioning Period Start Date and through the Commercial Delivery
Period, the Company shall receive and purchase Gas tendered for delivery at the Point of
Delivery in accordance with the Company’s Gas Orders, except that the Company shall not be
obligated to receive any such requested Gas to the extent that, in the Company’s sole judgment,
receipt of such quantity of Gas by the Company may:
3.6
(a)
In any way adversely affect the operating capabilities or design characteristics of the
Facility (including without limitation the Facility’s capacity, efficiency, reliability, safety, or
environmental compliance or profitability); or
(b)
be contrary to manufacturers’ recommendations with respect to the Facility or any part
thereof; or
(c)
violate Part 2 of the Environmental Guidelines.
Failure at Point of Delivery
When the Gas Supplier tenders Gas at the Connection Point or the Point of Delivery, as the case
may be, in response to a Gas Order, the failure of Gas to flow across the Connection Point or the
Point of Delivery, as the case may be, at the rate required pursuant to this Agreement shall not be
deemed to be a failure on the part of the Gas Supplier to deliver the quantity (as adjusted under
Section 3.2(b)) of Gas set forth in such Gas Order (unless such failure results from a failure or
malfunction of the Gas Supplier’s equipment or facilities), a breach by the Gas Supplier of this
Agreement or a Gas Supplier Event of Default.
15
Gas Supply Agreement
SECTION 4: OPERATING PROCEDURES
4.1
4.2
Estimated Deliveries
(a)
At least ten (10) Days prior to the first commissioning and testing of any part of the
Transportation Facilities or the remainder of the Facility (but in any event not less than
ten (10) Days prior to the Scheduled Commissioning Period Start Date) and not less than
five (5) Days prior to the beginning of each Month thereafter, the Company will provide
the Gas Supplier with a good faith estimate of the quantities of Gas in MSCFs (assuming
a Btu content of 950 Btu per SCF) that the Company desires the Gas Supplier to make
available for delivery at the Connection Point (in the case of any testing of the
Transportation Facilities) or the Point of Delivery (in the case of any testing of the
remainder of the Facility) on a Day-to-Day basis commencing on the Scheduled
Commissioning Period Start Date and, thereafter, on the first Day of the following Month,
for each Day in that Month.
(b)
On or before 4:00 p.m. Bangladesh Standard Time five (5) Days prior to the first
commissioning and testing of any part of the Transportation Facilities or the remainder of
the Facility (but in any event not less than five (5) Days prior to the Scheduled
Commissioning Period Start Date and not less than five (5) Days prior to the beginning of
each Month thereafter), the Company shall advise the Gas Supplier of the estimated Gas
requirements of the Company in MSCFs for each Day of the following Month (“Estimated
Quantity”). The Company may thereafter adjust the Estimated Quantity by Gas Order by
providing notice in accordance with the provision of Section 4.3(d); provided, that the Gas
Supplier’s obligation to deliver Gas to the Company shall not at any time exceed the
Maximum Hourly Quantity or the Daily Contract Quantity.
Telephone Notification
For purposes of nominating deliveries of Gas pursuant to this Section 4, the Company shall, until
notified otherwise by the Gas Supplier, provide instructions by telephone to the Gas Supplier’s
designees; provided, that such telephone nominations shall be promptly confirmed in writing.
4.3
Preparation of Operating Procedures
At least six (6) months prior to the then-anticipated Scheduled Commissioning Period Start Date,
the Company and the Gas Supplier shall jointly initiate the preparation of a set of mutually agreed
written operating procedures to facilitate the Parties’ performance under this Agreement (the
“Operating Procedures”). If the Parties are unable to agree upon the terms of the Operating
Procedures at least three (3) months prior to the then anticipated Scheduled Commissioning
Period Start Date, the Parties shall refer the matter for determination by an Expert in accordance
with the provisions of Section 19. The Operating Procedures shall be completed and available for
use at least one (1) month prior to the Scheduled Commissioning Period Start Date. The
Operating Procedures shall encompass the following procedures and provisions:
(a)
an overall operating plan and procedures for the implementation of this Agreement shall
be established, including the testing procedures, protocols and schedules for the
handover of the Transportation Facilities and the RMS to the Gas Supplier, and any other
special plans or procedures that apply solely to the period between the anticipated
Commissioning Period Start Date and the Commercial Operations Date;
(b)
at least one (1) month prior to Scheduled Commissioning Period Start Date and
thereafter at least one (1) month prior to the beginning of each Year, the Company shall
provide the Gas Supplier a good faith written estimate of the Company’s Gas
requirements on a Month-by-Month basis for such Year:
16
Gas Supply Agreement
Provided, that such estimates shall not be binding upon the Company and the Company
shall advise the Gas Supplier as soon as possible of any changes in such estimated
requirements;
(c)
at least ten (10) Days prior to the Scheduled Commissioning Period Start Date and
thereafter at least ten (10) Days prior to the beginning of each Month, the Company shall
provide to the Gas Supplier good faith written estimates of the Company’s Gas
requirements on a Day-by-Day basis for such Month:
Provided, that such estimates shall not be binding upon the Company and the Company
shall advise the Gas Supplier as soon as possible of any changes in such estimated
requirements;
(d)
at least four (4) hours prior to the beginning of each Day, starting from the Scheduled
Commissioning Period Start Date, the Company shall communicate to the Gas Supplier a
Gas Order that sets forth the quantities (assuming a Btu content of 950 Btu per SCF) of
Gas planned to be required by the Facility during various loading periods for such Day;
(e)
not later than ninety (90) Days prior to the then-anticipated Scheduled Commissioning
Period Start Date, the Company shall establish procedures for accurately measuring the
HHV of the Gas delivered, the delivery requirements and any limitations related thereto
(including without limitation coordination between the Company and the Gas Supplier for
the shut down of the Facility) of the Facility and the capabilities and limitations of the
Transportation Facilities and the other facilities of the Gas Supplier, in accordance with
Internationally Accepted Standards;
(f)
any significant deviations from planned Gas deliveries and receipts as indicated in the
relevant Gas Order occasioned by the electric dispatch requirements of BPDB, or any
other significant unplanned deviations during a Day, shall be communicated by the
Company to the Gas Supplier in a revision of the Gas Order for such Day on a
prospective basis if reasonably practicable;
(g)
the format, content and acceptable means of communications of Gas Orders shall be
agreed;
(h)
steps to be taken in the case of a Force Majeure Event shall be established;
(i)
planning and coordination procedures for scheduled and unscheduled maintenance on
the Parties’ facilities shall be established;
(j)
testing protocols and schedules may be established if the Parties deem that to be
advisable;
(k)
when the operations or actions of the employees or contractors of one Party may affect
the operations or safety of the facilities, employees or contractors of the other Party,
safety rules and operating procedures shall be established;
(l)
cathodic protection and electrical isolation procedures for interconnecting facilities shall
be established; and
(m)
such other matters as may be necessary or desirable to facilitate operations,
communications, safety, or other matters of mutual concern may be set forth in the
Operating Procedures.
17
Gas Supply Agreement
4.4
Operating Procedures Amendments
From time to time during the Term, either Party may propose amendments of the Operating
Procedures to better achieve the objectives of this Agreement or for the mutual benefit of the
Parties. Such proposals shall be delivered in writing by a proposing Party to the other Party. If
the Parties are unable to agree upon the terms of such proposed amendments within three (3)
months of the delivery of such proposed amendment, the Parties shall refer the matter for
determination by an Expert in accordance with the provisions of Section 19.
4.5
Conflict with Agreement
In the event of any conflict between this Agreement and the Operating Procedures developed
pursuant to Sections 4.3 or 4.4, the provisions of this Agreement shall in all respects control.
4.6
Notice of Construction Schedule
As soon as possible but in no event later than Financial Closing, the Company agrees to provide
the Gas Supplier with notice of the anticipated construction schedule for the Facility, which
schedule shall include the significant construction milestones.
4.7
Commissioning and Testing of Company’s Facilities
At least twenty (20) Days prior to the first commissioning and testing of any part of the Facility,
the Company shall give the Gas Supplier notice of such commissioning and testing, and the Gas
Supplier shall have the right to observe such commissioning and testing. The Gas Supplier shall
abide by, and cause its employees and other representatives to abide by, the reasonable
instructions of the Company when observing the commissioning and testing of the Company’s
facilities.
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Gas Supply Agreement
SECTION 5: TRANSPORTATION FACILITIES
5.1
Specifications and Standards
(a)
The Company shall design, construct, install, commission and test the Transportation
Facilities (a) in accordance with the specifications for the Transportation Facilities set
forth in Part B of Annexure C hereto, (b) in accordance with Prudent Utility Practices,
(c) in a workmanlike and professional manner and (d) in accordance with all applicable
Laws of Bangladesh. The Company shall consult with the Gas Supplier to connect the
Transportation Facilities to the Connection Point, and shall thereafter transfer the
Transportation Facilities to the Gas Supplier at no cost to the Gas Supplier on or before
the Scheduled Commissioning Period Start Date. The Gas Supplier shall provide in a
timely manner access to its site to the extent reasonably requested by the Company from
time to time, for the purpose of constructing, laying down and installing the Transportation
Facilities and connecting the Transportation Facilities with the Gas Supplier’s facilities at
the Connection Point:
Provided, that if the Company otherwise would have been able to achieve the completion
of the Transportation Facilities on or before the Scheduled Commissioning Period Start
Date, the required date for completion of the Transportation Facilities and the Scheduled
Commissioning Period Start Date shall be extended on a Day-for-Day basis to the extent
that the completion of the Transportation Facilities has been delayed due to the
occurrence of a Force Majeure Event, the Gas Supplier’s failure to provide access to the
Site pursuant to this Section 5.1(a), or in order to implement one or more of the Gas
Supplier’s comments provided pursuant to Section 5.1(c).
(b)
The Gas Supplier shall, from the date of transfer of the Transportation Facilities in
accordance with Sections 5.1(a) and 5.5(c), operate and maintain the Transportation
Facilities in accordance with the Operating Procedures.
(c)
The Gas Supplier may provide the Company with comments on the construction
arrangements for the Transportation Facilities during the construction thereof, and the
Company agrees to consult with the Gas Supplier in relation to such comments with a
view to implementing those of the Gas Supplier’s comments (i) which the Company
believes are both reasonable and appropriate and (ii) the implementation of which does
not materially increase the cost or delay the construction of the Transportation Facilities.
The Gas Supplier shall have no right to provide any comments and/or instructions directly
to the Contractor(s) responsible for the construction of the Transportation Facilities.
(d)
The Company shall permit representatives of the Gas Supplier to inspect the sites for the
Transportation Facilities before or during construction at any time upon reasonable notice
and provided such inspection will not interfere with construction activities, and thereafter
the Gas Supplier shall permit representatives of the Company to inspect the
Transportation Facilities at any time upon reasonable notice.
(e)
The Company shall install, not later than thirty (30) Days prior to the Scheduled
Commissioning Period Start Date, the Company Transportation Facilities, as provided
herein, compatible with the Transportation Facilities at the Point of Delivery. Upon
completion of the Company Transportation Facilities, the Company shall be responsible
for connecting the same with the Transportation Facilities at the Point of Delivery, so as
to be capable of commencing the supply of Gas on the Scheduled Commissioning Period
Start Date. The Company may also install, maintain and operate, at its sole cost and
expense, the Company Communication Facilities, including connecting the same with the
19
Gas Supply Agreement
Gas Metering System. The Gas Supplier shall make available to the Company such
easements and rights-of-way within the Gas Supplier’s property, each in recordable
form,
(f)
as the Company may reasonably require to install the Company Communication Facilities
on the Gas Supplier’s property;
Provided, that if the Company otherwise would have been able to achieve the completion
of the Company Transportation Facilities and interconnection with the Transportation
Facilities on or before the Scheduled Commissioning Period Start Date, the required date
for completion of the Company Transportation Facilities and interconnection with the
Transportation Facilities and the Scheduled Commissioning Period Start Date shall be
extended on a Day-for-Day basis to the extent that the completion of the Company
Transportation Facilities or interconnection with the Transportation Facilities has been
delayed due to the occurrence of a Force Majeure Event or in order to implement one or
more of the Gas Supplier's comments provided pursuant to Section 5.1(c).
5.2
5.3
Construction of Transportation Facility
(a)
The Company shall deliver to the Gas Supplier written notice of the then Scheduled
Commissioning Period Start Date not later than three (3) months after the Financial
Closing Date.
(b)
The Company shall commence the construction, installation, testing and commissioning
of the Transportation Facilities and all other works necessary to supply Gas to the Facility
up to the Point of Delivery in accordance with the terms of this Agreement.
Governmental Authorisations
The Gas Supplier shall use all reasonable efforts to assist the Company to obtain and maintain
any and all Government Authorisations for the design, construction, installation, commissioning,
testing and handover of the Transportation Facilities.
5.4
Ownership and Costs
(a)
(b)
The Company shall be responsible for the payment of all costs (including the cost of
materials, labour and construction supervision) incurred by the Company, or its
Contractor(s), as the case may be, for the design, engineering, construction, commissioning
and testing of the Transportation Facilities and their connection to the Connection Point.
Following the acceptance by the Gas Supplier of the Transportation Facilities in accordance
with Section 5.5(c), the Gas Supplier shall be responsible for the operation and
maintenance of the Transportation Facilities and all costs associated therewith. On the date
of transfer of the Transportation Facilities the Company shall assign to the Gas Supplier all
continuing warranties under the contracts relating to the construction of the Transportation
Facilities, which warranties shall cover a period of not less than twelve (12) months following
such date of transfer, but otherwise such transfer shall be on an “as is, where is” basis,
provided that the Company shall upon such transfer deliver to the Gas Supplier a warranty
as to good transfer of title to the Transportation Facilities.
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Gas Supply Agreement
5.5
5.6
Commissioning and Testing of Transportation Facilities
(a)
The Gas Supplier shall be obligated to provide Gas to the Transportation Facilities in
sufficient quantities to permit the Company to test and commission the Transportation
Facilities, in accordance with Section 3.3.
(b)
Subject to Section 8.3, the Company shall be obligated to accept Gas at the Point of
Delivery in reasonable quantity to the extent it is required to test and commission the
Transportation Facilities in accordance with Sections 3.3 and 9.1(a).
(c)
Upon the completion of the construction of the Transportation Facilities, the Company shall
notify the Gas Supplier in writing that it has constructed the Transportation Facilities in
accordance with the specifications set forth in Part B of Annexure C, which written
notification shall be accompanied by supporting documentation that such specifications
have been met. Within fifteen (15) Business Days of its receipt of such notice, the Gas
Supplier shall inspect and test the Transportation Facilities (including the connection of the
Transportation Facilities to the Connection Point) in accordance with the Operating
Procedures, and following such inspection and testing shall notify the Company if it agrees
with the Company’s assessment that the Transportation Facilities have been completed and
are ready for handover. If the Gas Supplier agrees that the Transportation Facilities have
been completed and are ready for handover, the Gas Supplier and the Company shall
agree a date (which shall be no later than the Scheduled Commissioning Period Start Date)
on which such handover is to occur, and on such date the Gas Supplier and the Company
shall take such actions and execute such documents as are necessary to effect the transfer
of ownership and risk and handover of the Transportation Facilities to the Gas Supplier. If
the Gas Supplier does not agree that the Transportation Facilities meet the specifications
set forth in Part B of Annexure C, then the Gas Supplier shall state the basis for its rejection
in reasonable detail in a written notice provided to the Company. The Parties shall
thereupon promptly and in good faith confer and make all reasonable efforts to resolve such
issue. In the event such issue is not resolved within twenty (20) Business Days of the
delivery by the Gas Supplier of its notice, the Parties shall refer the matter for determination
by an Expert in accordance with the provisions of Section 19, and the Scheduled
Commissioning Period Start Date shall be extended on a Day-for-Day basis for the duration
of such Dispute resolution proceedings. For the avoidance of doubt, the Gas Supplier’s
acceptance of the Transportation Facilities shall not relieve the Company of any of its other
obligations under this Agreement
Information for Environmental Impact Study
The Gas Supplier shall provide in a timely manner (a) all relevant information and (b) all
necessary assistance, as may be reasonably requested by the Company from time to time for the
purpose of completing the environmental impact study (in so far as it relates to the construction of
the Transportation Facilities) to meet the requirements of the Lenders to achieve Financial
Closing by the Required Financial Closing Date.
21
Gas Supply Agreement
SECTION 6: WARRANTY OF GAS SUPPLY
6.1
Warranty of Gas Supply
Except as provided in Section 14.1(c)(i)(D), the Gas Supplier hereby represents to, and warrants
and covenants with the Company that it will or will cause its suppliers to develop and maintain
sufficient gas reserves and supplies at all times following the Scheduled Commissioning Period
Start Date to enable it to deliver to the Point of Delivery Gas requested by the Company under
the terms of this Agreement in a quantity not to exceed the Daily Contract Quantity and the
Maximum Hourly Quantity for the Term of and in accordance with the terms of this Agreement.
The Gas Supplier unconditionally agrees that it shall be liable to the Company for the liquidated
damages set forth in Section 10.10 if its warranties and covenants with the Company set forth in
the immediately preceding sentence prove not to be true or if the Gas Supplier fails to comply
with such warranties and covenants.
22
Gas Supply Agreement
SECTION 7: MEASUREMENT
7.1
7.2
Regulating and Metering Station
(a)
To determine the quantities, Btu content and quality of Gas delivered under this
Agreement, the Company shall, at its expense, design, procure, install and test an
operational RMS and shall transfer ownership of the RMS to the Gas Supplier at no cost
to the Gas Supplier on or before the Commissioning Period Start Date in accordance with
the procedures set forth in Section 5. The Gas Supplier shall operate and maintain the
RMS for the Term in accordance with the provisions of this Agreement, including
Internationally Accepted Standards. Pressure control devices in the RMS shall be
operated and maintained by the Gas Supplier in accordance with Internationally
Accepted Standards to ensure the conformity with the Pressure Specifications set forth in
Annexure B.
(b)
The RMS shall be located immediately upstream of the Point of Delivery and on the Gas
Supplier’s property. The Gas Supplier shall grant necessary permission of access to the
Company pursuant to Section 5.1(e), and inspection and witnessing the calibration of the
Gas Metering System as per the Operating Procedures.
(c)
The Gas Metering System contained in the RMS shall be capable of recording on a
continuous real time basis the quality, quantity and the Btu (HHV) content of Gas
delivered to the Point of Delivery and shall include necessary interface terminals for the
Company to connect the Company Communication Facilities. The Gas Metering System
shall operate at an accuracy of measurement of plus or minus (+/-) one percent (1%).
No meter shall be connected to or disconnected (at the RMS) from the Gas pipe except
by the authorised personnel of the Gas Supplier. The Gas Metering System shall be
inspected periodically as agreed by the Parties.
Meter Readings
Meter readings for normal billing purposes (whether recorded from visual readings at the RMS,
telemetered or computed from measurement charts and records) shall be recorded at the end of
each Month and shall be made available to the Company. Gas quantities sold hereunder shall be
determined from such readings or records in accordance with the provisions of this Section 7.
Should any Dispute arise between the Parties as to quantities of Gas delivered hereunder, the
Parties shall in good faith reconcile their differences in accordance with the mechanism set forth
in this Section 7. If the Parties are unable to reconcile their differences as to metered quantities,
the Dispute shall be referred to an Expert for resolution pursuant to Section 19.
7.3
Measurement
(a)
The volumetric unit of measurement for Gas delivered and sold under this Agreement
shall be one (1) MSCF, whether determined by the flow meters, manually, or by other
means.
The Gas delivered hereunder shall be measured in accordance with
Internationally Accepted Standards, using methods recommended by the Gas
Measurement Committee of the Gas Department of the American Gas Association,
applied in a practical manner.
(b)
Measurement of Btu shall be in accordance with Internationally Accepted Standards,
using methods recommended by the Gas Measurement Committee of the Gas
Department of the American Gas Association, applied in a practical manner.
23
Gas Supply Agreement
7.4
Accuracy of Equipment
The accuracy of the measuring and testing equipment described in Section 7.1 shall be verified
when requested by either Party, but not more often than quarterly and not less often than
annually. All such tests shall be made at the Gas Supplier’s expense. If, upon any test, the Gas
Supplier’s measuring equipment is found to be inaccurate:
7.5
(a)
by less than two percent (2%), the previous reading thereof shall be considered correct
but such meter shall be adjusted at once to read accurately, and no Dispute or other
claim (other than adjustment of such meter) shall be raised solely in regard of a meter
inaccuracy of less than two percent (2%); or
(b)
by more than two percent (2%) the registration of such meter shall be corrected at the
rate of such inaccuracy for any period which is definitely known or agreed upon, failing
which for a period extending back one-half (½) of the time elapsed from the date of the
last calibration and then a corresponding adjustment shall be made with respect to any
payment made hereunder during such period. Following any test, if the Gas Supplier’s
measuring equipment is found inaccurate it shall be immediately corrected by the Gas
Supplier or the Gas Supplier’s representative to a condition of accuracy.
Alternate Measurement Determination
If, for any reason, the Gas Metering System:
(i)
is out of adjustment;
(ii)
is out of service; or
(iii)
is out of repair and the total calculated hourly flow rate (in MSCF, adjusted to 950
Btu per SCF) as shown on the Gas Metering System is found to be in error by an
amount of the magnitude described in Section 7.4(b) above; or
(iv)
cannot at such time be read and the quantity or Btu content of the Gas deliveries
cannot be determined by the Gas Metering System;
then the total quantity of Gas (adjusted to 950 Btu per SCF) delivered shall be
redetermined (or determined as the case may be) in accordance with the first of the
following methods which is then feasible:
(a)
by using the registration of Gas deliveries of the Check Metering System, if any, if
installed and accurately registering (subject to testing as described herein);
(b)
where parallel multiple meter runs exist, by calculation using the registration of such
parallel meter runs; provided, that they are measuring Gas from upstream and
downstream headers in common with the faulty metering equipment, are not controlled
by separate regulators, and are accurately registering;
(c)
by correcting the error by re-reading of the official charts, or by straight forward
application of a correction factor to the quantities recorded for the period (if the net
percentage of error is ascertainable by calibration, tests or mathematical calculation); or
(d)
by estimating the quantity of Gas used to generate the Net Energy Output (based on the
Reference Heat Rates) delivered to BPDB during the relevant period where the quantity
of Gas could not be determined by the Gas Metering System or by using any of the
methods set out in Sections 7.5(a), 7.5(b) and 7.5(c) above.
24
Gas Supply Agreement
7.6
Operating Procedures for Determination of Higher Heating Value
Operating Procedures for determination of Higher Heating Value of the Gas delivered to the Point
of Delivery shall be established consistent with Section 4.3(e).
7.7
Equipment Testing
For testing the accuracy of measuring and testing equipment as provided under Section 7.4 either
Party may give reasonable notice, but in no event less than five (5) Business Days’ notice, to the
other Party of tests so that each Party may, at its own expense, have its representative present at
such tests.
7.8
Inspection
The Gas Supplier shall at the request of the Company, at any time during business hours, allow
the Company to inspect equipment used for the measurement of Gas delivered by the Gas
Supplier pursuant to this Agreement and installed or operated by the Gas Supplier. The reading,
calibration and adjustment of such equipment and the changing of charts shall be done only by a
responsible representative of the Gas Supplier provided the Gas Supplier gives no less than
three (3) Days notice to the Company to make available its authorised representative to witness
such activities.
7.9
Company’s Check Meters
The Company may install, maintain and operate, at its sole cost and expense, check metering
equipment (“Check Metering System”) for the measurement of Gas, which shall comply with the
accuracy requirement as specified in Section 7.1(c); provided, that such equipment shall be
installed in a manner that will not interfere with the operation of the RMS, including the Gas
Metering System, and that such Check Metering System shall be on the Company’s property;
provided, further, that the Check Metering System shall not be used for billing purposes
hereunder except as expressly provided in Section 7.5(a).
7.10
Meter Verification, Calibration and Sealing
(a)
The accuracy of the Gas Metering System and, if installed by the Company, the Check
Metering System shall be verified and calibrated as provided in Section 7.4, in
accordance with Internationally Accepted Standards, using the methods recommended
by the American Gas Association, as published from time to time. The Gas Supplier shall
provide to the Company and the Company shall provide to the Gas Supplier three (3)
Days notice of any test conducted pursuant to this Section 7.10 on the Gas Metering
System and the Check Metering System, respectively, and the Party so notified shall
have the right to have a representative present during such test. All such tests on the
Gas Metering System shall be made at the Gas Supplier’s cost and expense and all such
tests on the Check Metering System shall be at the Company’s expense:
Provided, that if the Company requests that such tests be carried out on the Gas
Metering System, the Company shall bear the cost and expense of any such test carried
out by the Gas Supplier, if an inaccuracy in the Gas Metering System is found of less
than two percent (2%). Any part of the Gas Metering System or Check Metering System
found to be inaccurate following any tests thereof shall be immediately corrected at its
cost and expense, by the Gas Supplier (in the case of the Gas Metering System) and the
Company (in the case of the Check Metering System), to a condition of accuracy required
under Section 7.4.
25
Gas Supply Agreement
(b)
The Gas Metering System and Check Metering System (if any) shall be sealed jointly by
the Company and the Gas Supplier. The Gas Supplier shall give the Company in respect
of the Gas Metering System and the Company shall give the Gas Supplier in respect of
the Check Metering System, at least twenty-four (24) hours advance notice of the
breaking of seals on the Gas Metering System or Check Metering System, as the case
may be. Such notice will specify the time at which a meter seal will be broken and shall
give the Party being notified an opportunity to be present when such seals are broken
and resealed.
26
Gas Supply Agreement
SECTION 8: QUALITY, QUANTITY AND DELIVERY PRESSURE
8.1
Conformance with Gas Specifications
Subject to the provisions of this Section 8, the Gas Supplier shall tender, deliver and sell Gas to
the Company under the terms of this Agreement in full conformance with the Gas Specifications,
including, without limitation, the Quality Specifications and the maximum and minimum delivery
pressures set forth in the Pressure Specifications.
8.2
Rejection of Non-Conforming Natural Gas
Except as provided in Section 8.3, the Company, at its sole option, may reject and refuse delivery
of any Natural Gas which is not in full conformance with the Gas Specifications and shall give
immediate notice by facsimile (or, if facsimile communication is unavailable, by recorded
telephone conversation indicating the date and time of such conversation) to the individuals
identified in the Operating Procedures (confirmed by written notice as soon as possible, but in
any event not later than the next Business Day), to the Gas Supplier of such refusal and the
reason or reasons for such refusal in reasonable detail. The Gas Supplier shall take immediate
remedial action to cause the non-conforming Natural Gas to conform to the Gas Specifications
and to meet the delivery requirements of this Agreement. Until such time that the Gas Supplier
demonstrates to the Company’s satisfaction that such non-conforming Natural Gas fully conforms
to the Gas Specifications and to the delivery requirements of this Agreement, such nonconforming Natural Gas shall not be deemed to be tendered or delivered pursuant to the terms of
this Agreement.
8.3
Acceptance of Non-Conforming Natural Gas
At the Gas Supplier’s request or at the sole option of the Company, the Company may endeavor,
but never shall be obligated, to accept Natural Gas which does not fully conform to the Gas
Specifications and the delivery requirements of this Agreement and which can be made available
to it by the Gas Supplier. Such endeavors shall be limited to those situations where, in the
Company’s sole judgment, the receipt of such non-conforming Natural Gas will not:
(a)
in any way adversely affect the operating capabilities or design characteristics of the
Facility (including without limitation the Facility’s capacity, efficiency, reliability, safety,
environmental compliance or profitability),
(b)
be contrary to manufacturers’ recommendations with respect to the Facility or any part
thereof, or
(c)
violate Part 2 of the Environmental Guidelines.
In the event that the Company is aware of the nature of any quantity of Natural Gas which does
not fully conform to the Gas Specifications prior to its taking delivery of such Natural Gas and
willingly elects to accept delivery of such quantity, the Gas Supplier shall have no subsequent
liability to the Company in respect of any such non-conforming Natural Gas. The Company’s
agreement to accept Natural Gas not fully conforming to the Gas Specifications shall not be taken
in any way to modify or alter the Gas Specifications or bind the Company at any future time to
accept any Natural Gas that does not fully conform to the Gas Specifications.
27
Gas Supply Agreement
SECTION 9: GAS PRICE AND PAYMENTS
9.1
Payments for Gas
(a)
Subject to subsection 9.1(b) below and the other terms and conditions of this Agreement,
the Company shall pay to the Gas Supplier:
(i)
the Commissioning Period Payment as set forth in Part 2 of Annexure A, for Gas
actually delivered to, and received by, the Company at the Connection Point or
the Point of Delivery, as the case may be, pursuant to the Company’s Gas
Orders during any Month which occurs prior to or during the Commissioning
Period; and
(ii)
the Commercial Delivery Payments as set forth in Part 3 of Annexure A, for Gas
actually delivered to, and received by, the Company at the Point of Delivery
pursuant to the Company’s Gas Orders during any Month which occurs during
the Commercial Delivery Period.
Subject to Section 9.2 and Annexure A, the amount payable by the Company hereunder
for:
(A)
Gas delivered by the Gas Supplier to and received by the Company at
the Connection Point or the Point of Delivery, as the case may be,
pursuant to this Agreement prior to or during the Commissioning Period
shall be the Commissioning Period Payments; and
(B)
Gas delivered by the Gas Supplier to and received by the Company at
the Point of Delivery pursuant to this Agreement during the Commercial
Delivery Period shall be the Commercial Delivery Payments,
which in each case shall be paid by the Company as set forth in Section 10.
(b)
The amount to be paid by the Company for all Gas delivered to the Point of Delivery and
received by the Company under this Agreement shall be the then-prevailing price of Gas
as notified in writing by the GOB (the “Published Gas Price”) from time to time, which
shall be notified to the Company as follows:
(i)
Within the first five (5) Days of each Price Notification Period, the Gas Supplier
shall submit to the Company the then-prevailing Published Gas Price applicable
to Gas to be sold under this Agreement; and
(ii)
If at any time and from time to time there is any change in the price of Gas as
published by the GOB, the Gas Supplier shall immediately notify the Company of
the change in the Published Gas Price. A copy of the publication of the
Published Gas Price shall be included in such notification.
The Gas Supplier shall provide the Company with a copy of all price notifications
promptly after receipt. If the GOB for any reason ceases to notify Gas prices applicable
to the purchase and sale of Gas hereunder, subject to the provisions of Section 9.3, the
arrangements set forth in Section 9.3 shall be used to determine the price of Gas under
this Agreement.
28
Gas Supply Agreement
9.2
Price Adjustment
The Gas Supplier and the Company agree that Gas is being sold under this Agreement on the
assumption that Gas delivered will have a Higher Heating Value of 950 Btu per Standard Cubic
Foot (but shall not at any time have a Higher Heating Value of less than 900 Btu per Standard
Cubic Foot. From and after the Commissioning Period Start Date, if the Gas delivered to the
Company by the Gas Supplier during any billing period has an average per Btu content (HHV)
below or in excess of 950 Btu (Higher Heating Value per Standard Cubic Foot), the Parties agree
that the price of Gas per MSCF shall be adjusted pro rata to offset the reduced or excess Btu
content (above or below 950 Btu (Higher Heating Value) per Standard Cubic Foot) of the Gas
delivered by the Gas Supplier to the Company during such billing period.
9.3
Change in Price, Index or Rate
(a)
In the event that the GOB no longer establishes the price of Natural Gas (including Gas
sold hereunder) or a price, index or rate used to determine, compute or index the same
element in this Agreement and in Section 13 of the Power Purchase Agreement is no
longer available, an alternate price indexation formula or price index or rate, as the case
may be, acceptable to BPDB, the Company and the Gas Supplier shall be used for
adjustment of the price of Gas sold hereunder from and after the date that the price of
Natural Gas is no longer established by the GOB or such price, index or rate is no longer
available. If BPDB, the Company and the Gas Supplier cannot agree to an alternate
price indexation formula, price index or rate, as the case may be, within fifteen (15) Days
after the GOB ceases to establish the price of Natural Gas or such price indexation
formula, price index or rate, as the case may be, becomes unavailable, an Expert
acceptable to BPDB, the Company and the Gas Supplier shall nominate an alternate
price indexation formula, price index or rate, as the case may be, that shall be binding on
the Parties (and on BPDB). The Expert shall be requested to make a final determination
within fifteen (15) Days of the referral of the matter to the Expert.
(b)
Pending the substitution of an alternative price indexation formula, price index or rate, no
adjustment shall be made with respect to the price of Gas sold hereunder or to the
relevant price, index or rate, as the case may be. Upon substitution of an alternate price
indexation formula, price index or rate, as the case may be, the Parties shall, provided
that BPDB has agreed to make corresponding adjustments pursuant to Section 13.1 of
the Power Purchase Agreement prior thereto, make the adjustment with respect to the
price of Gas or the alternate price index or rate, as the case may be, retrospectively to
the date when the relevant adjustment would otherwise have been made, and any
reconciliation payments shall bear interest equal to the Bank Rate plus two percent (2%).
29
Gas Supply Agreement
SECTION 10: INVOICING AND PAYMENT
10.1
Monthly Invoicing
The Gas Supplier’s invoice for the supply of Gas hereunder, including any adjustments under
Section 9.3, shall be furnished to the Company on a Monthly basis under Section 10.3.
10.2
Delivery of Invoices
All invoices duly sent by the Gas Supplier in accordance with the notices provision hereof shall be
considered prima facie evidence of delivery of invoices to the Company by the Gas Supplier.
10.3
Posting and Payment
All invoices pertaining to Gas consumption may be sent at any time on or after the seventh (7th)
Day of the following applicable Month of Gas delivery and shall be payable less any amount
thereof which is in Dispute, not later than the date (the “Due Date”) that is the second (2nd)
Business Day after the thirtieth (30th) Day following the date of the delivery of the invoice by the
Gas Supplier. No Dispute shall be raised under this Agreement and no deduction from an invoice
shall be allowed where the Company claims a meter inaccuracy of less than two percent (2%).
10.4
Method of Payment
Payment shall be made to the Gas Supplier in Dhaka on or before the Due Date either by cheque
or wire transfer, bank draft or pay order in favor of Titas Gas Transmission and Distribution
Company Ltd. Payment will not be considered to have been received unless or until available in
cleared funds.
10.5
Late Payments
If payment of the amount shown in the invoice rendered by the Gas Supplier (less any portion
thereof which is Disputed by the Company) is not made by the Due Date, a late payment
surcharge at the Bank Rate plus four percent (4%) per annum shall be paid by the Company on
any outstanding amount calculated from the Day following the Due Date until but excluding the
date full payment is made.
10.6
Payment Disputes
(a)
At any time prior to one hundred and eighty (180) Days after either Party receives an
invoice, the receiving Party may serve notice (an “Invoice Dispute Notice”) to the
delivering Party that the amount or any portion of such amount shown in such invoice is
in Dispute. Each Invoice Dispute Notice shall specify the invoice concerned, the amount
of the Dispute and the basis therefor. If any amount or any portion of such amount or any
item shown in an invoice is disputed by the receiving Party, such Party shall pay the
undisputed amount; provided, that where such Dispute relates to a decisions of the
Transportation Facilities Interconnection Committee, the paying Party shall pay the full
amount invoiced until resolution of such Dispute in accordance with Section 19.
30
Gas Supply Agreement
10.7
(b)
In the event of a Dispute, either Party may seek resolution of the Dispute under Section
19. Upon the determination by the Expert appointed under Section 19 that all or any
portion of a Disputed amount is owed or should be refunded by a Party, as the case may
be, such Party shall, not later than three (3) Business Days following the date of
determination by the Expert, pay such amount to the other Party plus interest at the Bank
Rate plus four percent (4%) from the date the amount in Dispute was due under the
invoice until (but excluding) the date of payment. Any amounts remaining unpaid after
such third (3rd) Business Day shall be subject to interest pursuant to Section 10.5 from
the Day following the third (3rd) Business Day through (but not including) the date of
payment. If a Party does not accept the determination of the Expert, it shall notify the
other Party of its intent to arbitrate the Dispute in accordance with the provisions of
Section 19 and the provisions of this Section 10.6 shall apply.
(c)
Upon the resolution of the Dispute, any amount determined to be owing which has not
been paid or has been determined to have been improperly paid and is to be repaid, as
the case may be, shall be paid by the owing Party to the other Party within three (3)
Business Days of the resolution of the Dispute, together with interest equal to the Bank
Rate plus four percent (4%) from the date payment was originally due or from the date
paid for any amount to be repaid until the earlier of (but excluding) the date paid or such
third (3rd) Business Day. Any amount determined to be owed that remains unpaid after
such third (3rd) Business Day shall be subject to interest pursuant to Section 10.5 from
the Day following the third (3rd) Business Day through (but not including) the date of
payment.
Suspension of Deliveries
Notwithstanding the late payment surcharge as provided in Section 10.5 or any other provisions
in this Agreement, the Gas Supplier shall be entitled to suspend deliveries of Gas at any time that
any outstanding invoice or invoices remain unpaid (other than an amount in Dispute for which
payment may be withheld pursuant to Section 10.3) in full (including any accrued interest
thereon) beyond three (3) Business Days following the delivery of notice thereof by the Gas
Supplier to the Company; provided, that, if within such three (3) Business Day period, the
Company delivers to the Gas Supplier security in the form of an unconditional and irrevocable
letter of credit from a scheduled bank in Bangladesh in an amount equal to the amount shown in
such invoice multiplied by one and one-half (1.5) and a term of effectiveness of not less than sixty
(60) Days following its date of delivery to the Gas Supplier, the Gas Supplier shall not suspend
deliveries of Gas or encash the letter of credit during the period ending on the forty-fifth (45th) Day
following the due date of such invoice. If such payment is not made by such forty-fifth (45th) Day,
the Gas Supplier may suspend deliveries and encash the letter of credit for an amount equal to
the aggregate amount of all due and unpaid invoices delivered to the Company through the date
of encashment. The operation of the provision in the immediately preceding sentence shall
continue during the relevant period notwithstanding the delivery by the Gas Supplier of a
subsequent invoice.
10.8
Estimated Invoicing
In case the quantity of the Gas has to be determined (or redetermined) pursuant to Section 7.5,
the Gas Supplier shall submit invoices based on the first of the methods feasible (in consultation
with the Company) as outlined under Sections 7.5 (a) to (d). Such invoice shall be payable by the
Company pursuant to the terms of this Agreement.
10.9
Invoicing Errors
If the Gas Supplier or the Company within six (6) months after receipt or delivery of any invoice
delivered hereunder discovers any error, omission or discrepancy in any such invoice due to any
reason whatsoever, the Gas Supplier or the Company shall bring such error, omission or
discrepancy to the notice of the other and the Parties shall agree to adjust the relevant invoice
accordingly.
31
Gas Supply Agreement
10.10
Liquidated Damages
(a)
Liquidated Damages Payable by the Gas Supplier.
(i)
If, at any time during the period between the Scheduled Commissioning Period
Start Date and the Commercial Operations Date, the Gas Supplier (or its
contractors) fails to make Gas available at the Point of Delivery in accordance
with the terms and conditions of this Agreement (other than as a result of the
failure by the Company to complete the construction of the Transportation
Facilities and to transfer the Transportation Facilities to the Gas Supplier on or
prior to the Scheduled Commissioning Period Start Date in accordance with the
provisions of Section 5) (each a “Relevant Failure”) and such failure results in
delay in the Commercial Operations Date or the Commissioning of the Facility,
then the Gas Supplier shall, except for limited periods of Force Majeure Events
for which the Gas Supplier shall be excused from payment of liquidated damages
under this Section 10.10(a)(i) pursuant to Section 14.3(b)(ii), pay to the
Company, as liquidated damages from and after the Scheduled Commercial
Operations Date prevailing on the Certification Date:
(1)
(2)
an amount payable each Month, in arrears, (and pro rated for
any portion of a Month) equal to:
a)
the Carrying Cost; plus
b)
one hundred percent (100%) of the Escalable Capacity
Payment that would have been due and payable, had
the Commercial Operations Date occurred on the
Scheduled Commercial Operations Date prevailing on
the Certification Date, to the Company by BPDB
pursuant to the Power Purchase Agreement and
computed based on the assumption that the Dependable
Capacity equals the Contracted Facility Capacity for the
period liquidated damages is payable under this
Agreement and as adjusted for exchange rate changes
and inflation to the date of payment on the same basis
as is set out in Section 13 of the Power Purchase
Agreement applied mutatis mutandis; plus
within twenty-five (25) Days of demand by the Company, which
demand shall not be delivered to the Gas Supplier more than
twenty-seven (27) Days prior to the date or dates upon which the
corresponding principal repayments that are then due and
payable from the Company to the Lenders under the terms of the
Financing Documents, an amount equal to the principal
repayments required to be paid by the Company to the Lenders
under the Financing Documents which are deemed to have
accrued during the period beginning on and including the
Scheduled Commercial Operations Date prevailing on the
Certification Date and continuing for a period equal in length to
the duration of the Relevant Failure.
32
Gas Supply Agreement
For the purpose of this Section 10.10, principal payments under the Financing
Documents shall be deemed to accrue on a daily basis in accordance with the following
formula:
A=R/P
Where:
A
=
the amount of principal deemed to
accrue on the relevant Day;
R
=
the total amount of principal to be repaid
by the Company on the next scheduled
principal repayment date after the
relevant Day under the Financing
Documents; and
P
=
the number of Days in the period
beginning on the previous scheduled
principal repayment date under the
Financing Documents and ending on
such next scheduled principal repayment
date (or, in the case of the first principal
repayment, beginning on the Scheduled
Commercial Operations Date prevailing
on the Certification Date and ending on
the first scheduled principal repayment
date under the Financing Documents).
Any amounts in respect of such principal repayments so paid by
the Gas Supplier to the Company are hereinafter referred to as
“Principal Payments”; plus
(3)
any liquidated damages actually paid to BPDB by the Company
under the Power Purchase Agreement:
Provided, that the Gas Supplier’s liabilities for reimbursing any payment to the
Company under this Section 10.10(a)(i)(3) in respect of any Relevant Failure
shall not exceed the Taka equivalent (on the date of payment, using the
prevailing exchange rate as determined by the Bangladesh Bank in the published
Exchange Rates Bulletin or any latest official letter or circular to the “Authorised
Dealers” (as that expression is defined or used by Bangladesh Bank) or
publication of the Bangladesh Bank) of US$ 50 per MW per Day multiplied with
the number of Days (or part thereof) of delay in the Commercial Operations Date
experienced by the Company as a result of such Relevant Failure.
If either Party believes that a Relevant Failure is reasonably likely to occur, such
Party may require the formation of the Transportation Facilities Interconnection
Committee.
33
Gas Supply Agreement
All amounts payable hereunder by the Gas Supplier shall be further adjusted for
changes in the value of Taka against the Dollar from the exchange rate used to
prepare the relevant statement of damages pursuant to Section 10.10(c) to the
exchange rate prevailing on to the first Business Day after the date that the
relevant amount is received by the Company from the Gas Supplier on the same
basis as is set out in Section 13.1(d)(i)(aa) of the Power Purchase Agreement
applied mutatis mutandis and any payment due from Gas Supplier to the
Company as a result of such adjustment shall be paid at the time provided in
Section 13.1(d)(i)(aa) of the Power Purchase Agreement mutatis mutandis. Such
payments in Section 10.10(a)(i)(1) shall continue for a period equal in length to
the duration of the Relevant Failure. The amounts payable under Section
10.10(a)(i) are, for the avoidance of doubt, independent of each other and
payment under any such sub-section shall not reduce or otherwise affect the
amount(s) payable under the other such sub-sections.
(ii)
The Gas Supplier and the Company will agree on a schedule for repayment to
the Gas Supplier of any Principal Payments paid under this Section 10.10(a)
beginning on the Commercial Operations Date, plus interest, on the outstanding
balance of any such Principal Payments at the weighted average interest rate
prevailing on the loans (adjusted for the change in the value of the Taka against
the Dollar) under the Financing Documents on which the principal repayment
was made until the Principal Payments have been repaid in full. Such schedule
shall provide for monthly payments (to be made immediately following the
Company’s scheduled debt service payments, if any) and shall be based on
repayment in full within five (5) years following the Commercial Operations Date;
provided, that payments under this Section 10.10(a) shall be fully subordinated to
amounts due and payable to the Lenders under the Financing Documents, so
that if and to the extent that funds for such payments are not available to the
Company from cash flow from the Project less amounts paid or due for operating
costs, required Escrow Account deposits taxes, and debt service, such payment
will be deferred with interest at the above-stated rate, and the failure of the
Company to make any part or all of any such payment shall not constitute a late
payment or a Company Event of Default under this Agreement.
(iii)
If the Gas Supplier fails to deliver Gas in accordance with the terms and
conditions of this Agreement after the Commercial Operations Date then, in such
event, the Gas Supplier shall, except for limited periods of Force Majeure Events
for which the Gas Supplier shall be excused from payment of liquidated damages
under this Section 10.10(a)(ii) pursuant to Section 14.3(b)(ii), pay to the
Company as liquidated damages:
(A)
any payments that would have been contractually payable to the
Company from BPDB under the Power Purchase Agreement but for the
failure to deliver Gas (excluding Energy Payments and all payments
under the Power Purchase Agreement that are based upon the amount
of Net Energy Output, but including, without limitation, Capacity
Payments (as adjusted for exchange rate and inflation under Section 13
of the Power Purchase Agreement to the date of payment) and other
payments, as substantiated by the Company to the reasonable
satisfaction of the Gas Supplier); and
(B)
any liquidated damages that the Company incurs under the Power
Purchase Agreement for Forced Outages, or failure to achieve dispatch
levels (as substantiated through BPDB invoices and supporting
information reasonably required by the Gas Supplier), where such
payment losses and liquidated damages are due to the Gas Supplier’s
failure to perform as required under this Agreement.
34
Gas Supply Agreement
(iv)
If one or more events occur for which the Gas Supplier may be liable to the
Company for liquidated damages under Section 10.10(a)(i), the Parties shall
consult as to the possibility of requesting a retest of the Dependable Capacity of
the Facility pursuant to Section 7.2 of the Power Purchase Agreement in order to
reduce the amount of the liquidated damages that the Gas Supplier would
otherwise owe the Company. If the Parties agree, the Company shall use
reasonable efforts to request and carry out such retest:
Provided, that:
(A)
the Parties acknowledge that the terms of the Power Purchase
Agreement may not permit the Company to obtain a retest immediately
or may not permit the Company to obtain a retest at such time; and
(B)
the Company shall not:
(1)
be required by the provisions of this Section 10.10(a)(iii) to suffer
a suspension of Capacity Payments or a reduction or other
adjustment of the Capacity Payments under the Power Purchase
Agreement; and
(2)
the Company shall not be liable to the Gas Supplier, nor shall the
amount of liquidated damages owed to the Company be
decreased,
if the Company fails to reduce the amount of the damages that the Gas
Supplier is obligated to pay the Company under Section 10.10(a).
If and when the Gas Supplier notifies the Company that Gas is again available to
the extent of the Daily Contract Quantity and Maximum Hourly Quantity, the
Company shall use reasonable efforts to request another retest of the
Dependable Capacity of the Facility, subject to provisos (A) and (B) of the
foregoing sentence.
(b)
Liquidated Damages Payable by the Company.
(i)
During a Contract Year, if the aggregate total (in hours) of:
(A)
the Equivalent Forced Outage Hours for the Facility in that Contract Year
(“A”); plus
(B)
the Equivalent Scheduled Outage Hours for the Facility in that Contract
Year (“B”); plus
(C)
the Equivalent Maintenance Outages Hours for the Facility in that
Contract Year (“C”); plus
(D)
the Delay Lost Energy in that Contract Year (“D”); plus
(E)
the Force Majeure Outages in that Contract Year (“E”),
shall exceed the Threshold Level (“TL”) (defined below) in the relevant Contract
Year, then the Company shall pay to the Gas Supplier, as liquidated damages
therefor, an amount equal to:
35
Gas Supply Agreement
LD
=
GPAVE x MHQ x 0.05 x ((A + B + C + D + E) - TL)
=
the total liquidated damages payable (in Taka) under this Section
10.10(b)(i);
Where:
LD
GPAVE =
the Average Gas Price, expressed in Taka per MSCF;
MHQ
the Maximum Hourly Quantity, expressed in MSCF per hour;
=
As used in this Section 10.10(b)(i):
(1)
“Equivalent Forced Outage Hours”, expressed in hours, in any
Contract Year shall be equal to the sum of each hour of Forced
Outage during such Contract Year multiplied by a fraction, the
numerator of which is the reduction in generating capability of
the Facility (from the Dependable Capacity) during the relevant
hour of such Forced Outage and the denominator of which is the
Dependable Capacity in effect during such hour;
(2)
“Equivalent Scheduled Outage Hours” expressed in hours, in
any Contract Year shall be equal to the sum, for each hour of
Scheduled Outage during the Contract Year multiplied by a
fraction, the numerator of which is the reduction in generating
capability of the Facility (from the Dependable Capacity) during
the relevant hour of such Scheduled Outage and the
denominator of which is the Dependable Capacity in effect
during such hour;
(3)
“Equivalent Maintenance Outage Hours”, expressed in hours,
in any Contract Year shall be equal to the sum, for each hour of
Maintenance Outage during the Contract Year, multiplied by a
fraction, the numerator of which is the reduction in generating
capability of the Facility (from the Dependable Capacity) during
the relevant hour of such Maintenance Outage and the
denominator of which is the Dependable Capacity in effect
during such hour;
(4)
“Delay Lost Energy” in any Contract Year (which shall only
apply to the period from the Commercial Delivery Start Date to
the Commercial Operations Date, if any) shall be equal to the
delay period, measured in hours, in achieving the Commercial
operations Date from and after the Commercial Delivery Start
Date, excluding periods of delay caused by non-performance or
delays hereunder by the Gas Supplier or under the Power
Purchase Agreement or the Land Lease Agreement by BPDB or
Force Majeure Events affecting the Company or the Gas
Supplier or BPDB (under and as defined in the Power Purchase
Agreement);
36
Gas Supply Agreement
(5)
“Force Majeure Outage” in any Contract Year, shall be equal to
the sum of the hours of Force Majeure Events (other than
Political Force Majeure Events or Changes in Law) declared by
the Company after the Commercial Operations Date during such
Contract Year, each such hour multiplied by the FM Factor;
(6)
The “Threshold Level” in any Contract Year shall be equal to
eight hundred and seventy six (876) hours except every third
(3rd) Contract Year, where the Threshold Level shall be equal to
one thousand three hundred and seventy six (1376) hours,
provided further that the Company may elect at any time in its
sole discretion that such one thousand three hundred and
seventy six (1376) hour threshold shall apply to the Contract
Year that immediately precedes or follows any such third (3rd)
Contract Year (in which case the Threshold Level for such third
(3rd) Contract Year shall be eight hundred and seventy six (876)
hours); provided, that, for the first Contract Year, the Threshold
Level shall be equal to eight hundred and seventy six (876)
hours multiplied by 1.33; and
(7)
The “Average Gas Price” shall be the amount in Taka per
MSCF equal to the quotient of which (a) the numerator is the
total amount of payments in Taka due under this Agreement for
purchase of Gas for delivery at the Point of Delivery during the
relevant Contract Year and (b) the denominator is the total
quantity of such Gas delivered by the Gas Supplier and
purchased by the Company in such Contract Year in MSCF
(adjusted to 950 Btu per SCF):
Provided, that if no Gas is purchased during the relevant
Contract Year, the Average Gas Price shall be the sum of the
prices of Gas prevailing on the first (1st) Day of each Month in
such Contract Year divided by twelve (12):
Provided, further, that for purposes of this Section 10.10(b), the
Average Gas Price for any Contract Year following the first (1st)
Contract Year shall not be greater than the Average Gas Price
for the first Contract Year, as determined under this Clause
10.10(b)(i)(7), multiplied by (1.06)i, where “i” equals the cardinal
number of the relevant Contract Year minus one (1).
(ii)
Notwithstanding the provisions of Section 10.10(b)(i), if in any Contract Year the
purchases of Gas by the Company are equal to or greater than the Annual Gas
Threshold Amount, the provisions of Section 10.10(b)(i) shall not apply and no
liquidated damages shall be payable by the Company to the Gas Supplier under
or pursuant to Section 10.10(b)(i), and in no Contract Year shall the liquidated
damages payable by the Company under this Section 10.10(b) be greater than
an amount, in Taka, equal to the Annual Gas Threshold Amount minus the total
quantity of Gas delivered by the Gas Supplier and purchased by the Company in
such Contract Year in MSCF (adjusted to 950 Btu per SCF) and that difference
multiplied by the Average Gas Price for the relevant Contract Year.
37
Gas Supply Agreement
(iii)
(c)
(d)
The Company shall provide, and to the extent necessary shall use reasonable
efforts to ensure that BPDB provides, not later than ten (10) Business Days
following the end of each Contract Year, the information and data in sufficient
detail to permit the computation of liquidated damages under this Section
10.10(b). All notices provided by the Company to BPDB under Sections 9.3 of
the Power Purchase Agreement by the Company shall also be provided at the
same time to the Gas Supplier.
Any liquidated damages which are due and payable by a Party pursuant to Section
10.10(a) (except for Principal Payments and exchange rate adjustment provided therein
which shall be paid in accordance with the relevant provisions in Sections 10.10(a)) and
(b) shall be paid in the following manner:
(i)
On or after the tenth (10th) Day of the Month following a Month or on or after the
tenth (10th) Day following the end of any Contract Year during which a claim for
liquidated damages arises pursuant to this Sections 10.10(a) or (b), as the case
may be, the Party to whom liquidated damages are owed may deliver to the other
Party a statement of damages.
(ii)
Such statement shall provide all relevant data used by the Party to determine the
liquidated damages payable by the other Party under this Section 10.10, and the
total amount of the owing Party’s liability hereunder.
(iii)
The owing Party shall pay the amount owing (less any portion thereof which is in
Dispute) within twenty-five (25) Days after delivery of such statement of damages
payable by the owing Party under this Agreement.
(iv)
Any amounts not paid within the due date of such relevant amounts due under
this Section 10.10 shall bear interest, until paid, at a rate per annum equal to the
Bank Rate plus four percent (4%) and shall be computed for the actual number of
Days elapsed on the basis of a three hundred and sixty-five (365)-Day Year.
(v)
In the event that the Party against whom liquidated damages are claimed
disputes any part of a statement of damages, then such Party shall deliver
written notice to the claiming Party of such disputed statement of damages and
particulars of the Dispute, and the owing Party shall pay any undisputed part of
such statement of damages on the date due.
(vi)
The Parties shall use all reasonable efforts to resolve any Dispute related to an
invoice by joint investigation of any alleged discrepancies within thirty (30) Days
after the notification by the owning Party of such Dispute.
(vii)
Any Dispute that is not resolved within such time period (including any matter
related to the measurement of Gas (whether quantity or Btu content or the
Quality Specifications) shall be submitted to an Expert in accordance with the
provisions of Section 19.
Any disputed payment that is agreed or determined through the Dispute resolution
procedures provided in Section 19 to be owing to a Party shall be paid together with
interest thereon at the Bank Rate plus two percent (2%) from the due date of the original
statement for liquidated damages until the earlier of the date paid by the owing Party and
the third (3rd) Business Day following the determination through Dispute resolution
procedures and at the Bank Rate plus four percent (4%) thereafter until (but not
including) the date actually paid.
38
Gas Supply Agreement
SECTION 11: RISK OF LOSS, TITLE, INDEMNIFICATION AND INSURANCE
11.1
Risk of Loss and Title
The Gas Supplier shall be responsible for all of the Gas Supplier’s facilities upstream of the Point
of Delivery including, once transferred by the Company to the Gas Supplier in accordance with
Section 5 and Section 7.1, the Transportation Facilities. The Company shall be responsible for all
of the Company’s facilities downstream of the Point of Delivery including, until the Transportation
Facilities have been transferred to the Gas Supplier in accordance with Section 5.1(a), the
Transportation Facilities. Unless the Parties agree in writing otherwise, risk of loss and title to all
Gas delivered to the Company pursuant to the terms and conditions of this Agreement shall pass
from the Gas Supplier to the Company at the Point of Delivery.
11.2
Indemnification
Without limiting any other remedies that may be available to the Gas Supplier or the Company
hereunder or pursuant to applicable law, the following indemnification provisions shall apply
(a)
The Gas Supplier shall be deemed to be in exclusive control and possession of all Gas
delivered hereunder and shall be responsible for any damage or injury caused thereby
until the same shall have been delivered to the Company at the Point of Delivery, in
accordance with the provisions of this Agreement. The Gas Supplier shall indemnify,
defend and hold the Company, for itself and as trustee for its officers, directors,
shareholders, employees and its Contractor(s), harmless from any and all Losses
resulting from property damage or injury to and death of persons, arising from (i) any
negligent act or omission by the Gas Supplier with respect to Gas delivered by the Gas
Supplier up to and including the Point of Delivery wherever such damage or injury occurs
upstream or downstream of the Point of Delivery, or (ii) any breach by the Gas Supplier
of any of the representations, warranties and covenants made by the Gas Supplier
hereunder. In addition, the Gas Supplier shall indemnify and hold the Company harmless
from and against any and all claims arising out of wrongful payment of, or failure to pay,
an owner for any interest in Gas delivered to the Company hereunder, and against all
Losses arising from or out of any adverse claims to or against title to such Gas, to any
interest therein, or in the value thereof.
(b)
After receipt of Gas at the Point of Delivery, the Company shall be deemed to be in
exclusive control and possession of such Gas and shall be responsible for any damage
or injury caused thereby. The Company shall indemnify, defend and hold the Gas
Supplier, for itself and as trustee for its officers, directors, shareholders and employees,
harmless from any and all Losses resulting from property damage and injury to and death
of persons, arising from (i) any negligent act or omission by the Company with respect to
Gas delivered hereunder after the Point of Delivery wherever such damage or injury
occurs upstream or downstream of the Point of Delivery, or (ii) any breach by the
Company of any representations, warranties and covenants made by the Company
hereunder.
(c)
In the event injury or damage results from the joint or concurrent negligent or intentional
acts of the Parties, each Party shall be liable under this indemnification in proportion to its
relative degree of fault.
(d)
The provisions of this Section 11.2 shall survive for a period of five (5) years following the
termination of this Agreement.
39
Gas Supply Agreement
(e)
11.3
Limitations:
(i)
Each Party shall be solely liable, and shall not be entitled to assert any claim for
indemnification under this Agreement, for any Loss that would otherwise be the
subject of indemnification under this Agreement until all such Losses of such
Party arising during the then-current Year exceed, in the aggregate, one hundred
thousand Dollars ($100,000). For purposes of this Section 11.2(e), a Loss (or
claim for indemnification) shall be deemed to arise in the Year during which the
event giving rise to the Loss (or claim for indemnification) occurred or, in the case
where the event is continuing in more than one Year, in the Year during which
the event ends.
(ii)
Neither Party shall be entitled to indemnification under Section 11.2 if and to the
extent that a Party has received payment in full in respect of a Loss or
proceeding under the indemnities contained in the Power Purchase Agreement,
the Implementation Agreement, or any other document comprising the Security
Package, or any insurance policy, in respect of the relevant act or omission
Indemnification for Fines and Penalties
Any fines or other penalties incurred by one Party for non-compliance with Laws of Bangladesh
shall not be reimbursed by the other Party but shall be the sole responsibility of the noncomplying Party.
11.4
Defence of Claims
(a)
The indemnifying Party shall be entitled, at its option and expense and with counsel of its
selection, to assume and control the defence of such claim, action, suit or proceeding,
subject to the prior approval of the indemnified Party; provided, it gives prompt notice of
its intention to do so to the indemnified Party and reimburses the indemnified Party for
the reasonable costs and expenses incurred by the indemnified Party in connection with
the defence of such claim, action, suit or proceeding prior to the assumption by the
indemnifying Party of such defence.
(b)
Unless and until the indemnifying Party acknowledges in writing its obligation to
indemnify the indemnified Party and assumes control of the defence of a claim, suit,
action or proceeding under Section 11.4(a), the indemnified Party shall have the right, but
not the obligation, to contest, defend and litigate, with counsel of its own selection, any
claim, action, suit or proceeding by any third party alleged or asserted against such Party
in respect of, resulting from, related to or arising out of any matter for which it is entitled
to be indemnified hereunder, and the reasonable costs and expense thereof shall be
subject to the indemnification obligations of the indemnifying Party hereunder.
(c)
Upon assumption by the indemnifying Party of the control of the defence of a claim, suit,
action or proceeding, the indemnifying Party shall reimburse the indemnified Party for the
reasonable costs and expenses of the indemnified Party in the defence of the claim, suit,
action or proceeding prior to the indemnifying Party’s acknowledgment of the
indemnification and assumption of the defence.
(d)
Neither Party shall be entitled to settle or compromise any such claim, action, suit or
proceeding without the prior written consent of the other Party:
Provided, that after agreeing in writing to indemnify the indemnified Party, the
indemnifying Party may settle or compromise any claim without the approval of the
indemnified Party.
40
Gas Supply Agreement
(e)
Following the acknowledgment of the indemnification and the assumption of the defence
by the indemnifying Party, the indemnified Party shall have the right to employ its own
counsel and such counsel may participate in such action, but the fees and expenses of
such counsel shall be at the expense of such indemnified Party, when and as incurred,
unless:
(i)
the employment of counsel by such indemnified Party has been authorised in
writing by the indemnifying Party;
(ii)
the indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying Party and the indemnified Party in
the conduct of the defence of such action;
(iii)
the indemnifying Party shall not in fact have employed independent counsel
reasonably satisfactory to the indemnified Party to assume the defence of such
action and shall have been so notified by the indemnified Party; or
(iv)
the indemnified Party shall have reasonably concluded and specifically notified
the indemnifying Party either that there may be specific defences available to it
which are different from or additional to those available to the indemnifying Party
or that such claim, action, suit or proceeding involves or could have a material
adverse effect upon it beyond the scope of this Agreement.
If the above clause (ii), (iii) or (iv) shall be applicable, then counsel for the indemnified
Party shall have the right to direct the defence of such claim, action, suit or proceeding on
behalf of the indemnified Party and the reasonable fees and disbursements of such
counsel shall constitute legal or other expenses hereunder.
11.5
Notice of Proceedings
Each Party shall promptly notify the other Party of any Loss or proceeding in respect of which it is
or may be entitled to indemnification under this Section 11. Such notice shall be given as soon as
reasonably practicable after the relevant Party becomes aware of the Loss or proceeding.
11.6
Settlement
Neither Party shall be entitled to settle or compromise any such claim, action, suit or proceeding
without the prior written consent of the other Party (not to be unreasonably withheld or delayed):
Provided, that after agreeing in writing to indemnify the indemnified Party, the indemnifying Party
may settle or compromise any claim without the approval of the indemnified Party. Except where
such consent is unreasonably withheld or delayed, if a Party settles or comprises any claim,
action, suit or proceeding in respect of which it would otherwise be entitled to be indemnified by
the other Party without the prior written consent of the other Party, the other Party shall be
excused from any obligation to indemnify the Party making such settlement or compromise in
respect of such settlement or compromise.
11.7
Double Jeopardy
An order issued in a proceeding initiated by the GOB and based upon a claim of breach of the
Implementation Agreement shall be with prejudice to any proceedings against the Company that
the Gas Supplier could otherwise bring for breach by the Company of substantially the same
obligations under this Agreement. Nothing in this Section 11.7 shall prevent the Gas Supplier
and the GOB from separately initiating proceedings to terminate this Agreement and the
Implementation Agreement, respectively, pursuant to Section 18 and Sections 13.1 and 13.3 of
the Implementation Agreement.
41
Gas Supply Agreement
11.8
Insurance
(a)
The Company, at its sole cost and expense, shall obtain and maintain the policies of
insurance set forth below with deductible amounts comparable to insurance carried by
prudent operators and owners of similar facilities subject to availability on commercially
reasonable terms, for the amounts set forth below and for the duration of the construction
of the Transportation Facilities:
(i)
Marine and Air Cargo Insurance:
Coverage:
all materials, equipment machinery, spares and other
items for incorporation into the Transportation Facilities
against all risks of physical loss or damage while in
transit by sea or air from country of origin anywhere in
the world to Bangladesh, or vice versa, from the time of
the insured items leaving warehouse or factory for
shipment to the site of the Transportation Facilities.
Cover to institute Cargo Clauses (Air), institute War
Clauses (Air), (Sendings By Post), institute Strikes
Clause (Cargo, Air Cargo) or equivalent.
Sum insured:
An amount equal to cost and freight of any shipment.
Insured:
The Company, the contractors and suppliers to the
Company and to the contractors.
(ii)
Contractor’s All Risk
Coverage:
all work executed and in the course of execution,
materials and temporary works, while on the site of the
Transportation Facilities (including the Gas Supplier’s
existing interconnection facilities with the gas field),
against all risks of physical loss or damage other than
war and kindred risks, nuclear risks, unexplained
shortage, cost of replacing or repairing items which are
defective in workmanship, material or design; penalties;
consequential losses; cash; vehicles; vessels; aircraft.
Cover shall provide the equivalent terms, conditions
and perils/causes of loss provided under an All Risks
insurance policy.
Sum insured:
Coverage shall be no less than the maximum probable
loss of property items covered
Period of Cover:
Actual construction, testing and commissioning until
expiry of the warranty period.
Insured:
The Company, the contractors and all suppliers and
consultants, the GOB, the Gas Supplier and the
Lenders.
General:
During the warranty period, cover shall be limited to the
loss or damage for which the Construction
Contractor(s) is liable under the warranties of the
Construction Contract. Cover shall include transit
within Bangladesh of locally procured materials. Cover
shall cease, and be transferred to operating period
insurance, on the Day following the Commercial
Operations Date.
(b)
The Company, at its sole cost and expense, shall obtain and maintain during the Term,
the policies of insurance set forth in the Power Purchase Agreement in the amounts of
coverage and during the periods provided therein.
(c)
The Gas Supplier, its directors, officers and employees shall be additional insureds under
the policies described in Sections 11.8(a) and (b) to the extent they have an insurable
interest under any of such policies.
42
Gas Supply Agreement
SECTION 12: REPRESENTATIONS, WARRANTIES AND COVENANTS
12.1
By the Gas Supplier
(a)
(b)
The Gas Supplier hereby represents and warrants that:
(i)
it will have the title and right to sell all of the Gas to be delivered under this
Agreement, and the said Gas will be free from any and all adverse claims,
including, without limitation, royalties and other interests or owners’ claims
related to the Transportation Facilities;
(ii)
the entering into, and performance of, this Agreement by the Gas Supplier has
been duly authorised by the Gas Supplier and is in conformity with the existing
Laws of Bangladesh;
(iii)
it is duly created under the Laws of Bangladesh, and has, so far as it is material
to the Company, complied fully with all applicable Laws of Bangladesh;
(iv)
there are no proceedings pending, or, to the best of its knowledge, threatened,
for the dissolution of the Gas Supplier or that would materially adversely affect
the performance by the Gas Supplier of its obligations under this Agreement; and
(v)
this Agreement has been duly authorised, executed and delivered by the Gas
Supplier and constitutes the legal, valid and binding obligation of the Gas
Supplier.
The Gas Supplier hereby covenants as follows:
(i)
(ii)
it shall:
(A)
at all times maintain its corporate existence and operations in
compliance with the Laws of Bangladesh;
(B)
at all times, so far as it is material to the Company hereunder, comply
with all Laws of Bangladesh applicable to the Gas Supplier;
(C)
procure and maintain in full force and effect as and when necessary all
approvals, consents, authorisations, grants or certificates of registration,
notifications, licenses, concessions, acknowledgments, agreements,
rights-of-way, permits, decisions and similar items or otherwise required
for its performance under this Agreement; and
(D)
give all required notices and allow all required inspections under all
approvals, consents, authorisations, grants or certificates of registration,
notifications, licenses, concessions, acknowledgments, agreements,
rights-of-way, permits, decisions and similar items obtained, or applied
for, by the Gas Supplier in connection with the Transportation Facilities;
it shall render reasonable assistance to the Company to enable the Company to
obtain and maintain all approvals, consents, authorisations, grants or certificates
of registration, notifications, licenses, concessions, acknowledgments,
agreements, rights-of-way, permits, decisions and similar items that are required
by the Company to perform its obligations under this Agreement;
43
Gas Supply Agreement
(iii)
(c)
12.2
it shall operate, maintain (either by itself or through experienced and qualified
third-party contractors) and own the Transportation Facilities, and any and all
additionally required facilities:
(A)
in accordance with the Operating Procedures;
(B)
under the Laws of Bangladesh and (if not inconsistent therewith) the
Environmental Guidelines;
(C)
in accordance with all approvals, consents, authorisations, grants or
certificates of registration, notifications, licenses, concessions,
acknowledgments, agreements, rights-of-way, permits, decisions and
similar items;
(D)
in a good workmanlike manner (only with materials and equipment that
are unused, petroleum industry grade and suitable for their intended
use);
(E)
in such a manner as to provide that the useful life of the Transportation
Facilities, with proper operation and maintenance, will last at least until
the Expiry Date; and
(F)
in accordance with Internationally Accepted Standards.
At the execution and delivery of the Financing Documents, if requested by the Company,
the Gas Supplier shall, at the cost and expense of the Company, deliver a certificate,
executed by a duly authorised representative of the Gas Supplier affirming the validity of
the representations in Section 12.1(a) and the Gas Supplier shall cause its counsel to
issue an opinion affirming the validity of the representations in Section 12.1(a) and the
Gas Supplier’s compliance with the covenants in Sections 3, 4, 5 and 6 and Section
12.1(b) and setting forth such further matters as the Company may reasonably request.
By the Company
(a)
The Company hereby represents and warrants that:
(i)
upon the execution and delivery of the Power Purchase Agreement and subject
to the fulfillment of any conditions precedent to the effectiveness of the Power
Purchase Agreement, the Power Purchase Agreement shall be the legal, valid
and binding obligation of the Company;
(ii)
the entering into, and performance of, this Agreement by the Company have
been duly authorised by the Company and are in conformity with the existing
Laws of Bangladesh;
(iii)
it is duly incorporated, existing and in good standing under the Laws of
Bangladesh, and has, so far as it is material to the Gas Supplier, complied fully
with all applicable Laws of Bangladesh;
(iv)
there are no proceedings pending or, to the best of its knowledge, threatened, for
the liquidation of the Company or that would materially adversely affect the
performance by the Company of its obligations under this Agreement, the Power
Purchase Agreement or the Construction Contract and the other documents and
agreements constituting a part of the Security Package;
44
Gas Supply Agreement
(b)
(v)
this Agreement has been duly authorised, executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company;
(vi)
to the best of its knowledge, the execution and delivery of, and, performance of
its obligations under, this Agreement by the Company, subject to the granting
and maintenance of the requisite approvals, consents, authorisations, grants or
certificates
of
registration,
notifications,
licenses,
concessions,
acknowledgments, agreements, rights-of-way, permits, decisions and similar
items, does not violate the existing Laws of Bangladesh; and
(vii)
the Implementation Agreement contains, as of the date hereof, a commitment
from the GOB to support and use all reasonable efforts to expedite the
consideration of the Company’s applications for, and timely issuance of, all
approvals, consents, authorisations, grants or certificates of registration,
notifications, licenses, concessions, acknowledgments, agreements, permits,
decisions and similar items required to be obtained for the Company for the
construction, financing, ownership, insurance, operation and maintenance of the
Facility.
The Company hereby covenants as follows:
(i)
(ii)
it shall:
(A)
at all times maintain its corporate existence and operations in
compliance with the Laws of Bangladesh;
(B)
at all times, so far as it is material to the Gas Supplier hereunder, comply
with all Laws of Bangladesh applicable to the Company;
(C)
procure and maintain in full force and effect as and when necessary all
approvals, consents, authorisations, grants or certificates of registration,
notifications, licenses, concessions, acknowledgments, agreements,
rights-of-way, permits, decisions and similar items required for its
performance under this Agreement; and
(D)
give all required notices and allow all required inspections under all
approvals, consents, authorisations, grants or certificates of registration,
notifications, licenses, concessions, acknowledgments, agreements,
rights-of-way, permits, decisions and similar items obtained, or applied
for, by the Company in connection with the Facility;
it shall render reasonable assistance to the Gas Supplier to enable the Gas
Supplier to obtain and maintain all approvals, consents, authorisations, grants or
certificates
of
registration,
notifications,
licenses,
concessions,
acknowledgments, agreements, rights-of-way, permits, decisions and similar
items that are required by the Gas Supplier to perform its obligations under this
Agreement;
45
Gas Supply Agreement
(iii)
(c)
it shall develop, design, insure, construct and complete the Facility including the
Transportation Facilities and the Company Transportation Facilities, and operate
and maintain the Facility including the Company Transportation Facilities either
by itself or through experienced and qualified third-party contractors:
(A)
in accordance with the Operating Procedures;
(B)
under the Laws of Bangladesh and (if not inconsistent therewith) the
Environmental Guidelines;
(C)
in accordance with all applicable Government Authorisations and rightsof-way and similar items;
(D)
in a good workmanlike manner (only with materials and equipment that
are unused and suitable for their intended use);
(E)
in such a manner as to provide that the useful life of the Facility including
the Company Transportation Facilities, with proper operation and
maintenance, will last at least until the Expiry Date; and
(F)
under the Power Purchase Agreement and Internationally Accepted
Standards;
(iv)
if at any time during the financing, development, design, insuring, construction
and completion of the Facility, the Company determines that any material delay
may occur in its meeting of the dates set forth in the milestone schedule to be
provided by the Company, the Company shall notify the Gas Supplier of such
expected delay and any required change in such schedule; and
(v)
it shall ensure that it has dedicated cash reserves and/or committed financing
available from financial institutions to design, insure, construct and complete the
Transportation Facilities and the Facility (including the Company Transportation
Facilities) in accordance with the projected capital requirements as of the date of
execution and delivery of the Financing Documents.
At the execution and delivery of the Financing Documents, if requested by the Gas
Supplier, the Company shall, at no cost to the Gas Supplier deliver a certificate executed
by a duly authorised representative of the Company, affirming the validity of the
representations in Section 12.2(a) and deliver certified copies of the Power Purchase
Agreement and the Company’s Certificate of Incorporation and Memorandum and
Articles of Association.
46
Gas Supply Agreement
SECTION 13: CURTAILMENT, INTERRUPTION AND SHUTDOWN
13.1
Permitted Interruption by Gas Supplier
After giving notice as far in advance as reasonably possible but in any event not less than twentyfour (24) hours in advance, the Gas Supplier shall have the right, without any liability, damages or
other compensation to the Company hereunder, to reduce or interrupt the Gas supply to the
Facility for carrying out necessary extensions, maintenance, repair and/or alteration work on the
Gas Supplier’s pipelines, equipment and devices. The periods for such interruptions shall not
exceed thirty (30) hours during any one period of interruption and ninety-six (96) hours in the
aggregate in any Contract Year. Such notice shall give the expected duration of such outage.
Notwithstanding the foregoing, provided that the Company gives the Gas Supplier notice of its
Scheduled Outage and Maintenance Outage periods as provided in Section 13.2, the Gas
Supplier agrees to use its best efforts to schedule any such outages or interruptions in the supply
of Gas during the Scheduled Outage or Maintenance Outage periods notified by the Company
pursuant to Section 13.2; provided, that, the Gas Supplier shall not be required to use best efforts
to schedule outages or interruptions during such Scheduled Outage or Maintenance Outage
where such outages or interruptions have to be carried out to comply with Natural Gas Safety
Rules, 1991 issued vide SRO 71-Law/91, as amended by SRO 196-Low/2003 of the Ministry of
Energy and Mineral Resources of Bangladesh; provided, further, that, for unscheduled
maintenance, the Gas Supplier and the Company shall immediately notify to and consult with
each other in the event any unscheduled maintenance or repair is required to be done on the
Transportation Facilities or the Facility, to ensure the minimum possible disruption on the
operation of the Facility or the Transportation Facilities, unless caused by an emergency
occurrence having resulted in a forced outage in which case no advance notice will be required.
13.2
Notice of Facility Outages
The Company shall give the Gas Supplier a copy of the notices of the annual Scheduled Outage
period and Maintenance Outages of the Facility provided to BPDB under Section 9.4 of the Power
Purchase Agreement. The Company shall inform the Gas Supplier of any change in the
Scheduled Outage or Maintenance Outage requested by BPDB pursuant to Section 9.4 of the
Power Purchase Agreement.
13.3
Coordination
Subject to the Gas Supplier complying with its obligation under Section 13.1, non-delivery or a
reduction in the delivery of Gas by the Gas Supplier pursuant to Section 13.1 shall not constitute
a breach or default of the performance obligations of the Gas Supplier under this Agreement, and
notwithstanding anything to the contrary contained in this Agreement, shall not give rise to any
claim by the Company for any compensation or damages hereunder. The Company and the Gas
Supplier also agree that, to enable the Gas Supplier to complete any maintenance or repair of the
Gas Suppliers’ facilities which has been scheduled during such a shutdown period, the Gas
Supplier may reduce or interrupt the supply of Gas pursuant to Section 13.1 above.
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Gas Supply Agreement
SECTION 14: FORCE MAJEURE
14.1
Definition of Force Majeure
In this Agreement, “Force Majeure Event” shall mean any event or circumstance or combination
of events or circumstances (including the effects of such events or circumstances or combination
of events or circumstances) referred to in this Section 14 that materially and adversely affects the
performance by a Party of its obligations under this Agreement, but only if and to the extent that
such events and circumstances are not within the reasonable control, of the affected Party;
provided, that an event or circu
mstance or combination of events or circumstances (including the effects of such events and
circumstances or combination of events or circumstances) shall not be construed as a Force
Majeure Event unless such material and adverse effect could not have been prevented,
overcome, or remedied in whole or in part by the affected Party through the exercise of
reasonable diligence and care, it being understood and agreed that reasonable diligence and
care includes acts or activities to protect the Parties’ facilities from a casualty event, which are
reasonable in light of the likelihood of such event, the probable effect of such event if it should
occur, and the likely efficacy of the protection measures.
In this Agreement, Force Majeure Event includes each of the following events and circumstances
to the extent that they, or their consequences, satisfy the above requirements:
(a)
political events that occur inside or directly involve Bangladesh (each a “Political Force
Majeure Event”), including, but not limited to:
(i)
any act of war (whether declared or undeclared), invasion, armed conflict or act
of foreign enemy, blockade
(ii)
, embargo, revolution, riot, insurrection, civil commotion, political act or act of
terrorism;
(iii)
any Lapse of Consent that shall have itself existed for twenty-six (26) Days or
more or for thirty (30) Days in the aggregate in any Year or for forty (40) Days in
the aggregate in any two (2) Year period;
(iv)
radioactive contamination or ionising radiation originating from a source inside
Bangladesh or resulting from another Political Force Majeure Event;
(v)
strikes, works to rule or go-slows that extend beyond the facilities of a Party
(including, the Facility, or the EIF (after it has been transferred to PGCB by the
Company) or the Transportation Facilities)) and that are (A) widespread or
nationwide or (B) of a political nature, such as, by way of example and not
limitation, labor actions associated with or directed against the Company (or the
Contractor(s)) as part of a broader pattern of labor actions against companies or
facilities with foreign ownership or management; or
(vi)
inability of the Gas Supplier (or its suppliers) to economically recover Gas from
the [insert Site] gas field in Bangladesh during the Term in the quantity and
quality required to be supplied hereunder.
(b)
Changes in Law;
(c)
Other events beyond the reasonable control of the affected Party (“Other Force Majeure
Events”), including, but not limited to:
48
Gas Supply Agreement
(i)
(ii)
(d)
14.2
uncontrollable events, including, but not limited to:
(A)
lightning, earthquake, tsunami, flood, storm, cyclone, typhoon, or
tornado;
(B)
fire, explosion or chemical contamination (other than resulting from an
event described in Section 14.1(a), in which case it shall be a Political
Force Majeure Event);
(C)
epidemic or plague; or
(D)
a Lapse of Consent unless such Lapse of Consent is a Political Force
Majeure Event.
political events that occur outside Bangladesh and do not directly involve
Bangladesh, including, but not limited to:
(A)
any act of war (whether declared or undeclared), invasion, armed conflict
or act of foreign enemy, blockade, embargo, revolution, riot, insurrection,
civil commotion, or act of terrorism;
(B)
radioactive contamination or ionising radiation originating from a source
outside Bangladesh and not falling within Section 14.1(a)(iii); or
(C)
strikes, works to rule, or go-slows that are widespread or nation-wide;
Force Majeure Events shall expressly not include the following events or conditions,
except (in the case of (i) or (ii) only) to the extent that they result directly from any event
or circumstance or combination of events or circumstances in relation to a Contractor(s)
or any supplier and the performance of its obligations under an agreement which would
constitute a Force Majeure Event if such Contractor(s) or any such supplier was a Party
and such agreement were this Agreement (other than resulting from an event described
in Sections 14.1(a) or (b), in which case, if such event or circumstance affects the
Construction Contractor(s) or the O&M Contractor(s), it shall be a Political Force Majeure
Event or a Change in Law, as the case may be for the Company):
(i)
late delivery of plant, machinery, equipment, materials, spare parts or
consumables;
(ii)
a delay in the performance of any Contractor(s) or supplier to either of the
Parties;
(iii)
normal wear and tear or random flaws in materials and equipment or breakdowns
in equipment.
Notification Obligation
(a)
If by reason of a Force Majeure Event, a Party is wholly or partially unable to carry out its
obligations under this Agreement, the affected Party shall:
(i)
give the other Party notice of the Force Majeure Event(s) as soon as practicable,
but in any event, not later than three (3) Days after the occurrence of the Force
Majeure Event(s) or six (6) hours after the resumption of any means of providing
notice between the Company and the Gas Supplier, whichever is later; and
49
Gas Supply Agreement
(ii)
(b)
give the other Party a second notice, describing the Force Majeure Event(s) in
reasonable detail and, to the extent that can be reasonably determined at the
time of the second notice, providing a preliminary evaluation of the obligations
affected, a preliminary estimate of the period of time that the affected Party will
be unable to perform the obligations, and other relevant matters as soon as
practicable, but in any event, not later than seven (7) Days after the initial notice
of the occurrence of the Force Majeure Event(s) is given by the affected Party.
When appropriate or when reasonably requested to do so by the other Party, the
affected Party shall provide further notices to the other Party more fully
describing the Force Majeure Event(s) and its or their causes and providing or
updating information relating to the efforts of the affected Party to avoid and/or to
mitigate the effect(s) thereof; and estimates, to the extent practicable, of the time
that the affected Party reasonably expects it will be unable to carry out any of its
affected obligations due to the Force Majeure Event(s).
The affected Party shall also provide notice to the other Party of:
(i)
with respect to an ongoing Force Majeure Event, the cessation of the Force
Majeure Event; and
(ii)
its ability to recommence performance of its obligations under this Agreement;
as soon as possible, but in any event, not later than seven (7) Days after the occurrence
of each of (i) and (ii) above.
(c)
Failure by the affected Party to give notice of a Force Majeure Event to the other Party
within the three (3) Day period or six (6) hour period required by Section 14.2(a) shall not
prevent the affected Party from giving such notice at a later time:
Provided, that: (i) in such case, the affected Party shall not be excused pursuant to
Section 14.3 for any failure or delay in complying with its obligations under or pursuant to
this Agreement until the notice required by Section 14.2(a)(i) has been given; and (ii) if
such notice is given within the three (3) Day period or six (6) hour period as required by
Section 14.2(a)(i), the affected Party shall be excused for such failure or delay pursuant
to Section 14.3 from the date of commencement of the relevant Force Majeure Event.
14.3
Excuse From Performance
(a)
Subject to Section 14.2 and Section 14.3(b) below, and so long as the affected Party has
at all times since the occurrence of a Force Majeure Event complied with the obligations
of Section 14.4 and continues to so comply, then notwithstanding the terms of any other
provision of this Agreement:
(i)
the affected Party shall not be liable for any failure or delay in performing its
obligations (other than an obligation to make a payment, including the payments
provided for in Section 11.2) under or pursuant to this Agreement during the
existence of a Force Majeure Event(s)m including without limitation, in the case
of the Gas Supplier, the Gas Supplier’s obligation to deliver Gas up to the Daily
Contract Quantity; and
(ii)
any performance or other deadline that the affected Party is obligated to meet
under this Agreement, including the Scheduled Commissioning Period Start
Date, shall (except as provided in Section 14.3(b) below) be extended on a Day
for day basis:
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Gas Supply Agreement
(b)
(c)
14.4
(iii)
Provided, that no relief including without limitation the extension of any
performance or other deadlines, shall be granted to the affected Party pursuant
to this Section 14.3 to the extent that such failure or delay would have
nevertheless been experienced by the affected Party, as a result of a breach by
the affected Party of this Agreement, had such Force Majeure Event not
occurred.
(i)
the Company shall not be excused from its liability to pay liquidated damages
pursuant to Section 10.10(b) as a result of an Other Force Majeure Event
occurring after the Commercial Operations Date;
(ii)
the Gas Supplier will only be excused from its liability to pay liquidated damages
pursuant to Section 10.10(a) as a result of (A) any Political Force Majeure Event
affecting the Gas Supplier for a maximum of fifteen (15) Days in aggregate in
each Contract Year and (B) any Other Force Majeure Event affecting the Gas
Supplier for a maximum of thirty (30) Days in aggregate in each Contract Year.
Other than for breaches of this Agreement by the other Party, and without prejudice to
the affected Party’s right to indemnification or right to claim liquidated damages from
either the Gas Supplier or the Company, as the case may be, pursuant to Section 10.10,
the other Party shall not bear any liability for any loss or expense suffered by the affected
Party as a result of a Force Majeure Event.
Duty to Mitigate
The affected Party shall use all reasonable efforts to mitigate the effect of a Force Majeure Event,
including, but not limited to, the payment of all reasonable sums of money by or on behalf of the
affected Party, which sums are reasonable in light of the likely efficacy of the mitigation
measures.
14.5
Termination as a Result of Force Majeure
In the event that a Force Majeure Event excuses the failure or delay of performance by a Party of
a material obligation under this Agreement for a period in excess of fifteen (15) months prior to
the Commercial Operations Date or nine (9) continuous months following the Commercial
Operations Date, with respect to the Company, or, for a period in excess of twelve (12) months
with respect to the Gas Supplier, then the other Party shall have the right to terminate this
Agreement without liability or obligation by delivering written notice thereof to the Party which has
been excused by such Force Majeure Event; provided, that the Gas Supplier may not terminate
this Agreement unless the Implementation Agreement is also terminated along with this
Agreement in accordance with the terms of the Implementation Agreement.
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Gas Supply Agreement
SECTION 15: GOVERNMENTAL RULES AND REGULATIONS
15.1
No Challenge or Contest
Neither Party has undertaken, will knowingly undertake or will knowingly cause to be undertaken
any activity in connection with this Agreement which would conflict with the Laws of Bangladesh;
provided, that nothing herein shall be construed to restrict or limit either Party’s right to object to
or contest the same. Each Party shall hereafter defend and support this Agreement before any
governmental board, agency or body or in any court if the substance, validity, or enforceability of
all or any part of this Agreement is hereafter challenged by any third party.
52
Gas Supply Agreement
SECTION 16: ASSIGNMENT AND SECURITY
16.1
Assignment
No assignment or transfer by a Party of this Agreement or such Party’s rights or obligations
hereunder shall be effective without the prior written consent of the other Party, except by the
Company as provided in Sections 16.2 or 16.3 of this Agreement.
16.2
Creation of Security
(a)
Notwithstanding the provisions of Section 16.1, for the purpose of financing the
construction of the Facility, the Company may, pursuant to the Financing Documents,
assign to, or grant a security interest in favor of, the Lenders in its rights and interests
under or pursuant to:
(i)
this Agreement;
(ii)
any agreement or document included within the Security Package;
(iii)
the Facility;
(iv)
the Site;
(v)
the movable, immovable and intellectual property of the Company; and
(vi)
the revenues or any of the rights or assets of the Company.
The Company shall not create any security over its rights and interests under this
Agreement without the prior written consent of the Gas Supplier except as already
provided above.
(b)
Except as expressly provided in this Agreement, the Lenders shall have no rights in
respect of or obligations to the Gas Supplier under this Agreement until such time as the
Lenders or their designees succeed to the Company’s interest under this Agreement,
whether by exercise of their rights or remedies under the Financing Documents or
otherwise, in which case the Lenders or their designees shall assume liability for all of the
Company’s obligations under this Agreement, including payment of any amounts due and
owing to the Gas Supplier for payment defaults by the Company under this Agreement
(other than, so long as the liability insurance required by Section 11.8 has been and is in
effect, liabilities incurred by the Company under Section 11.2(b)), arising during the
period prior to the Lenders’ or such designees’ succession to the Company’s interest in
and under this Agreement:
Provided, that any liability of the Lenders or their designees shall be strictly limited to the
Lenders’ interest in the facility. Except as otherwise set forth in the immediately
preceding sentence, none of the Lenders or their designees shall be liable for the
performance or observance of any of the obligations or duties of the Company under this
Agreement, nor shall the assignment by the Company of this Agreement to the Lenders
give rise to any duties or obligations whatsoever on the part of any of the Lenders owing
to the Gas Supplier.
(c)
Upon delivery by the Lenders or the Agent to the Gas Supplier of notice of the
occurrence and continuance of an event of default under the Financing Documents and
the succession of the Lenders to the Company’s interests in and under this Agreement (a
“Succession Notice”), the Lenders shall have the right, among others, to (i) take
possession of the Facility and, prior to the Commercial Operations Date, complete
construction of the Facility and operate the same, after the Commercial Operations Date
and (ii) cure any continuing Company Event of Default under this Agreement as provided
in Section 18.6. Notwithstanding the foregoing, upon the delivery of a Succession Notice,
the Lenders shall have no obligation to cure any Company Event of Default occurring
prior to the delivery of the Succession Notice that is not capable of being cured including,
but not limited to, a default under Section 18.1(d), and no right will exist for the Gas
53
Gas Supply Agreement
Supplier to terminate this Agreement based upon such Company Event of Default
occurring prior to the delivery of the Succession Notice. Without the requirement of
obtaining any further consent from the Gas Supplier, upon the exercise by the Lenders or
their designees of any of the remedies set forth in the Financing Documents, the Lenders
may assign their rights and interests and the rights of the Company under this Agreement
to a Transferee (as hereinafter defined) so long as such Transferee shall assume in
writing for the benefit of the Gas Supplier all of the obligations of the Company under this
Agreement. Upon such assignment and assumption, the Lenders shall be relieved of any
obligations assumed by them under this Agreement arising after such assignment and
assumption.
(d)
As used herein, a “Transferee” shall be a person who:
(i)
either is an experienced power plant operator or shall have agreed to engage the
services of a person who is an experienced power plant operator;
(ii)
shall have paid all amounts, if any, then due and payable to the Gas Supplier
under this Agreement;
(iii)
shall have expressly assumed in writing for the benefit of the Gas Supplier the
obligations of the Company under this Agreement; and
(iv)
constitutes a company organised under the Laws of Bangladesh.
(e)
At the request of the Company, delivered to the Gas Supplier not less than thirty (30)
Days in advance, the Gas Supplier shall execute and deliver, at the cost and expense of
the Company, at the execution and delivery of the Financing Documents such
acknowledgments to the Lenders or their designees with respect to any security created
pursuant to this Section 16 and the rights of such parties under this Agreement as the
Lenders may reasonably request in accordance with customary practices in transactions
of this nature.
(f)
Notwithstanding the foregoing, the Gas Supplier shall have the right to assign this
Agreement to any entity or entities assuming all of the Gas Supplier’s rights and
obligations in connection with the transmission or distribution of Gas to the Point of
Delivery:
Provided, that the GOB without interruption guarantees the performance of such other
succeeding entity or entities on the same terms and conditions as the Guarantee or such
other commercial security is provided for the obligations of the succeeding entity or
entities that in the reasonable business judgment of the Company provides an adequate
alternative to the Guarantee and all of the Gas Supplier’s obligations under this
Agreement (including, without limitation, the representations, warranties and covenants
under Section 12.1) are assigned pursuant to law to or contractually assumed, through a
notation, by one or more entities, each of which has the legal capacity and appropriate
commercial function to perform such obligations.
16.3
Assignment to the GOB
Notwithstanding the provisions of Section 16.1, the Company may assign this Agreement and the
Company’s rights and obligations under this Agreement to the GOB in the event of a transfer of
the Facility to the GOB under Section 14 of the Implementation Agreement. Upon such
assignment, the Company shall be released from all obligations and liabilities arising under this
Agreement from and after the date of such assignment to the GOB.
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Gas Supply Agreement
SECTION 17: NOTICES
17.1
Addresses
Except as otherwise expressly provided in this Agreement or in the Operating Procedures, all
notices or other communications which are required or permitted hereunder shall be in writing
and shall be delivered personally or sent by a reputable international courier for express delivery,
registered or certified mail, facsimile, telex or telegram, addressed as follows:
If to the Company:
[___________________]
Address:
[_________________]
Attention:
[_________________]
Facsimile:
[_________________]
If to the Gas Supplier:
Titas Gas
Address:
Attention:
Facsimile:
With a copy to:
17.2
Transmission and Distribution
[_________________]
[_________________]
[_________________]
Company
Ltd
[_________________]
Method of Delivery
All notices shall be deemed delivered:
(a)
when presented personally;
(b)
when transmitted by facsimile to the receiving Party’s facsimile number specified above;
(c)
five (5) Business Day after being delivered to a reputable international courier for express
delivery, addressed to the receiving Party, at the address indicated above (or such other
address as such Party may have specified by written notice delivered to the delivering
Party at its address or facsimile number specified above in accordance herewith); or
(d)
five (5) Business Days after being deposited in a regularly maintained receptacle for the
postal service in Bangladesh, postage prepaid, registered or certified, return receipt
requested, addressed to the receiving Party, at the address indicated above (or such
other address as the receiving Party may have specified by written notice delivered to the
delivering Party at its address or facsimile number specified above in accordance
herewith).
Any notice given by facsimile shall be confirmed in writing delivered personally or sent by
registered or certified mail, but the failure to so confirm shall not void or invalidate the original
notice if it is in fact received by the Party to which it is addressed.
17.3
Changes
Either Party may by not less than ten (10) days’ prior written notice change the addresses,
addresses or facsimile numbers or both to which such notices and communications to it are to be
delivered or mailed.
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Gas Supply Agreement
SECTION 18: TERMINATION FOR DEFAULT
18.1
Company Events of Default
With the prior written consent of the GOB, a copy of which consent shall be provided to the
Company with any notice under this Section 18.1, the Gas Supplier may give a notice of
termination of this Agreement hereinafter referred to as the “Gas Supplier Termination Notice”,
upon the occurrence of any of the following events, each being, a “Company Event of Default”
unless resulting from (i) a Force Majeure Event, (ii) a breach or default by the Gas Supplier under
this Agreement, a breach or default by the GOB under the Implementation Agreement or the
Guarantee, or a breach or default by BPDB under the Power Purchase Agreement or the Land
Lease Agreement, as the case may be:
(a)
except for the transfer of this Agreement to the GOB pursuant to the terms of the
Implementation Agreement or assignments to and by the Lenders as contemplated by
Section 16.2, the assignment or transfer by the Company of this Agreement or of the
Company’s rights or obligations under this Agreement in violation of Section 16;
(b)
except for the purpose of amalgamation or reconstruction (provided that such
amalgamation or reconstruction does not affect the ability of the amalgamated or
reconstructed entity, as the case may be, to perform its obligations under this
Agreement), the occurrence of any of the following events:
(i)
the passing of a resolution by the shareholders of the Company for the winding
up of the Company;
(ii)
the voluntary filing by the Company of a petition of bankruptcy, moratorium or
similar relief;
(iii)
the appointment of a liquidator in a proceeding for the winding up of the
Company after notice to the Company and due hearing, which appointment has
not been set aside or stayed within ninety (90) Days of such appointment; or
(iv)
the making by a court with jurisdiction over the Company of an order winding up
the Company that is not stayed or reversed by a court of competent authority
within ninety (90) Days;
(c)
the occurrence of a Company Event of Default (as defined in the Implementation
Agreement) which has not been waived or remedied within the applicable cure period
provided to the Company or the Lenders therein;
(d)
any statement, representation or warranty made by the Company in this Agreement
proving to have been incorrect, in any material respect, when made or when deemed to
have been made and the circumstances that cause such failure or incorrect statement,
representation or warranty to be incorrect having a material adverse effect on the
Company’s ability to perform its obligations under this Agreement;
(e)
any material breach by the Company of this Agreement which is not remedied within
thirty (30) Days after notice from the Gas Supplier notice stating that a material breach of
this Agreement has occurred that could result in the termination of this Agreement,
identifying the breach in question in reasonable detail, and demanding remedy thereof; or
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Gas Supply Agreement
(f)
18.2
any default or defaults by the Company in the making of any undisputed payment or
payments required to be made by it hereunder within a period of thirty (30) Days plus five
(5) Business Days following the due date thereof.
Gas Supplier Event of Default
The Company may give notice of termination of this Agreement, hereinafter referred to as the
“Company Termination Notice”, upon the occurrence of any of the following events each being,
a “Gas Supplier Event of Default” unless resulting from a Force Majeure Event (except in the
case of Section 18.2(e)) or a breach or default by the Company under this Agreement or under
the Implementation Agreement:
(a)
any assignment or transfer of this Agreement or of the Gas Supplier’s rights or
obligations hereunder in violation of Section 16;
(b)
the dissolution, pursuant to law of the Gas Supplier, except for an amalgamation,
reorganisation, reconstruction or further corporatisation or privatisation of the Gas
Supplier or its assets where (i) the GOB, without interruption guarantees the performance
of the succeeding entity or entities on the same terms and conditions as the Guarantee;
or (ii) such other commercial security is provided for the obligation of the succeeding
entity that in the reasonable business judgment of Company provides an adequate
alternative to the Guarantee; AND all of the Gas Supplier’s obligations under this
Agreement have been assigned pursuant to law or contractually assumed, through a
novation or otherwise, by one or more entities, each of which has the legal capacity and
appropriate commercial function to perform its obligations:
(c)
(i)
the occurrence of a GOB Event of Default (as defined in the Implementation
Agreement) or of a BPDB Event of Default (as defined in the Power Purchase
Agreement) or of a BPDB Event of Default (as defined in the Land Lease
Agreement) which has not been waived or remedied within the applicable cure
period provided therein; or
(ii)
any change in any Laws of Bangladesh making:
(A)
unenforceable, invalid, or void any material undertaking of the Gas
Supplier under this Agreement; or
(B)
it unlawful for the Company, its Lenders or the investors to make or
receive any payment, to perform any obligation or to enjoy or enforce
any material right under this Agreement; or
(C)
any such payment, the performance of any such material obligation or
the enjoyment or enforcement of any such material right unenforceable,
invalid or void as a result of any such change in law;
(d)
any statement, representation or warranty made by the Gas Supplier herein proving to
have been incorrect, in any respect, when made or when deemed to have been made
and the circumstances that cause such failure or incorrect statement, representation or
warranty to be incorrect having a material adverse effect on the Gas Supplier’s ability to
perform its obligations under this Agreement;
(e)
failure of the Gas Supplier to acquire (or procure the acquisition of) the land for the
construction, laydown and installation of the Transportation Facilities (other than the land
for the construction, laydown and installation of the RMS) in accordance with Section
5.2(a) on or prior to the date six (6) months following the Scheduled Site Acquisition
Date;
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Gas Supply Agreement
18.3
(f)
the warranties and covenants with the Company set forth in Section 6.1 prove to be
incorrect or are not honored or performed by the Gas Supplier;
(g)
any other material breach by the Gas Supplier of this Agreement which is not remedied
by the Gas Supplier within thirty (30) Days after notice from the Company stating that a
material breach of this Agreement has occurred that could result in the termination of this
Agreement, identifying the breach in question in reasonable detail, and demanding
remedy thereof; or
(h)
following the delivery of Gas Orders by the Company in accordance with the terms of this
Agreement, the failure of the Gas Supplier to deliver an aggregate amount of Gas to the
Point of Delivery greater than fifty percent (50%) of the aggregate amount of Gas shown
in the Gas Orders of the Company in any twelve (12) month period.
Termination Notices
(a)
Any Termination Notice given pursuant to Sections 18.1 or 18.2 shall specify in
reasonable detail the Company Event of Default or the Gas Supplier Event of Default, as
the case may be, giving rise to such Termination Notice.
(b)
Following the delivery of a Terminate Notice, the Parties shall consult for a period of:
(i)
forty-five (45) Days in case of failure by either Party to make payments when
due; and
(ii)
ninety (90) Days with respect to any other Event of Default,
(or such longer period as they may agree) as to what steps shall be taken with a view to
resolving or mitigating the consequences of the relevant Event of Default:
(c)
18.4
During the period following the delivery of the Termination Notice, the Party in default
may continue to undertake efforts to cure the default, and if the default is cured at any
time prior to termination of this Agreement in accordance with Section 18.4, then the nondefaulting Party shall have no right to terminate this Agreement in respect of such cured
default.
Termination of Agreement
Subject to Section 18.6, at the expiry of the forty-five (45) Day period or the ninety (90) Day
period (as the case may be), if either such period is applicable, unless (a) the Parties shall have
otherwise agreed or (b) the Company Event of Default or the Gas Supplier Event of Default, as
the case may be, giving rise to the Gas Supplier Termination Notice or the Company Termination
Notice, as the case may be, shall have been cured, the Party having given the Termination Notice
may terminate this Agreement by giving written notice thereof to the other Party and to the
designated representative of the Lenders. Subject to the rights of the Lenders to cure any
Company Event of Default as provided in this Agreement, this Agreement shall immediately
terminate upon delivery of such written notice.
18.5
Remedies
(a)
Except where expressly provided otherwise in this Agreement: (i) the exercise of the right
of a Party to terminate this Agreement, as provided herein, does not preclude such Party
from exercising other remedies that are provided herein or are available at law; and (ii)
remedies are cumulative, and the exercise of, or failure to exercise, one or more remedy
by a Party shall not limit or preclude the exercise of, or constitute a waiver of, other
remedies by that Party that are available to it at law or in equity.
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Gas Supply Agreement
18.6
(b)
If this Agreement is terminated by the Gas Supplier as a result of a Company Event of
Default under this Agreement prior to the occurrence of the Commercial Operations Date,
the Company shall upon such termination reimburse the Gas Supplier for all costs and
expenses (including reasonable overheads) incurred by the Gas Supplier in connection
with (i) the acquisition of easements and right of ways for the Transportation Facilities
and (ii) the design, engineering, construction and installation or upgrading of
interconnection facilities . This obligation shall expressly survive any termination of this
Agreement.
(c)
Notwithstanding the provisions of Section 18.5(a), the Parties agree that the Gas Supplier
or the Company, as the case may be, may be damaged in an amount that may be difficult
or impossible to determine in the event that this Agreement is terminated due to a
Company Event of Default or a Gas Supplier Event of Default, as the case may be,
hereunder. The Parties, therefore, have agreed that if this Agreement and the
Implementation Agreement are terminated by the Gas Supplier and the GOB or the
Company, as the case may be, due to a Company Event of Default or a Gas Supplier
Event of Default, as the case may be, and a Company Event of Default and a GOB Event
of Default under the Implementation Agreement and the Facility is transferred to the GOB
under Section 14 of the Implementation Agreement and the consideration provided
thereunder is paid to the Company and the amount provided under Section 18.5(b), if
any, is paid to the Gas Supplier, that such transfer and the payment of such
consideration and amount is reasonable and constitutes liquidated damages to the Gas
Supplier or the Company, as the case may be, in either such event, and it is further
agreed that such transfer and payment of such consideration and such amount is in lieu
of actual damages for such occurrence and the transfer of the Facility and the collection
of such compensation and the termination of this Agreement pursuant to Section 18.4 is
the sole remedy of the Gas Supplier or the Company, as the case may be, for such
Company Event of Default or Gas Supplier Event of Default and termination of this
Agreement.
Notice to the Lenders of the Company’s Default
(a)
Notwithstanding anything contained in this Agreement, from and after the occurrence of
the Financing Closing Date, the Gas Supplier shall not seek to terminate this Agreement
without first giving to the Lenders a copy of any notices required to be given to the
Company under Sections 18.1 and 18.3, such notice to be coupled with a request to the
Lenders to cure any such default within the period specified in Section 18.3 (the “Initial
Cure Period”), which period shall commence upon delivery of each such notice to the
Lenders.
(b)
The Lenders will designate in writing to the Gas Supplier an agent, (the “Agent”) and any
notice required hereunder shall be delivered to such Agent, such notice to be effective
upon delivery to the Agent as if delivered to each of the Lenders.
Each such notice shall be in writing and shall be deemed to have been delivered:
(i)
when presented personally to the Lenders or the Agent;
(ii)
when transmitted by the Gas Supplier and received by the Lenders or the Agent
by facsimile to the number specified in accordance with the procedure set forth
below; or
(iii)
five (5) Days after being deposited in a regularly maintained receptacle for the
postal service in Bangladesh, postage prepaid, registered or certified, return
receipt requested, addressed to the Lenders at the address indicated at Financial
Closing (or such other address or to the Agent at such address as the Lenders
may have specified by written notice delivered in accordance herewith).
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Gas Supply Agreement
Any notice given by facsimile under this Section 18.6(b) shall be confirmed in writing,
delivered personally or sent by prepaid post, but failure to so confirm shall not void or
invalidate the original notice if it is in fact received by the Lenders or the Agent.
Notwithstanding the foregoing, if the address of the Lenders or the Agent is outside
Bangladesh, any notice delivered to the Lenders or the Agent pursuant to this Section
18.6(b) shall be:
(i)
presented personally or sent by international courier or facsimile; and
(ii)
if sent by facsimile, confirmed by international courier,
and the Initial Cure Period shall commence upon receipt by the Lenders or the Agent of
the notice referenced above.
The address and facsimile number for the Lenders or Agent shall be provided to the Gas
Supplier by the Company at Financial Closing and thereafter may be changed by the
Lenders or the Agent by subsequent delivery of a notice to the Gas Supplier at the
address or facsimile number for the Gas Supplier provided in Section 17.1 (or at such
other address or facsimile number subsequently delivered to the Lenders or the Agent
under this Section 18.4(b)) and otherwise in accordance with the requirements of
Section 17.1.
(c)
From and after Financial Closing no rescission or termination of this Agreement by the
Gas Supplier shall be valid or binding upon the Lenders without such notice, and the
expiration of:
(i)
the Initial Cure Period;
(ii)
the Evaluation Period provided in Section 18.4(d); and
(iii)
if applicable, the Lenders Cure Period provided in Section 18.4(e), as such
Lenders Cure Period may be extended.
The Lenders may make, but shall be under no obligation to make, any payment or
perform or procure the performance of any act required to be made or performed by the
Company, with the same effect as if made or performed by the Company.
(d)
If the Lenders fail to cure or are unable or unwilling to cure the Company Event of Default
that is required to be cured prior to the expiration of the periods referred to above in this
Section 18.6, the Gas Supplier shall have all its rights and remedies with respect to such
default as set forth in this Agreement; provided, that:
(i)
upon the expiration of the Initial Cure Period, the Lenders shall have a further
period (the “Evaluation Period”) during which the Lenders may evaluate such
Company Event of Default, the condition of the Facility, and other matters
relevant to the actions to be taken by the Lenders concerning such Company
Event of Default; and
(ii)
the Evaluation Period shall end on the earlier to occur of:
(A)
the delivery by the Lenders to the Gas Supplier of notice that the
Lenders have elected to procure the cure of such Company Event of
Default or otherwise pursue the Lenders rights or remedies under the
Financing Documents (an “Election Notice”); and
(B)
thirty (30) Days following the end of the Initial Cure Period.
During the Evaluation Period, the Gas Supplier’s rights and remedies with respect to a
Company Event of Default shall be suspended.
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Gas Supply Agreement
(e)
Upon delivery of the Election Notice, the Lenders shall be permitted an additional period
of one hundred and eighty (180) Days to cure any other Company Event of Default (the
“Lenders Cure Period”).
During the Lenders Cure Period, the Gas Supplier’s right to terminate this Agreement
shall be suspended so long as the Lenders are diligently: (i) attempting to procure (other
than by the Company, unless the Company is acting at the direction of the Lenders) the
cure of such default, or (ii) pursuing the enforcement of their rights and remedies under
the Financing Documents against the Company.
(f)
18.7
In the event that the Lenders fail to cure any Company Event of Default on or before the
expiration of the Lenders Cure Period, the Gas Supplier may exercise its rights and
remedies set forth in this Agreement with respect to such default set forth in this
Agreement and may immediately terminate this Agreement, and such termination shall
be effective on delivery to the Lenders or the Agent of notice of such termination.
Obligations Upon Termination
(a)
Upon expiration or earlier termination of this Agreement, the Parties shall have no further
obligations or liabilities hereunder except for those obligations and liabilities that:
(i)
arose prior to or arise upon such expiration or termination; and
(ii)
obligations and liabilities that arose upon termination and expressly survive such
termination, including the obligation to pay any compensation and expenses
payable under Section 18.5(b).
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Gas Supply Agreement
SECTION 19: DISPUTE RESOLUTION
19.1
19.2
Resolution by Parties
(a)
In the event that a Dispute arises, the Parties shall attempt in good faith to settle such
Dispute by mutual discussions within thirty (30) Days after the date that the disputing
Party gives written notice of the Dispute to the other Party. During such mutual
discussions and any resolution procedure prescribed pursuant to this Section 19, the
Parties shall faithfully continue to perform their respective obligations under this
Agreement.
(b)
In the event that a Dispute is not resolved under Section 19.1(a), either Party may refer
the Dispute to the chief executive officer or chief operating officer of the Company and
the designated representative of the Gas Supplier, or another authorised director or
officer designated by notice to the Company or to the Gas Supplier in writing for further
consideration and attempted resolution within fifteen (15) Days after the Dispute has
been referred to such individuals, or such longer period as the Parties may agree.
Mediation by Expert
(a)
In the event that the Parties are unable to resolve a Dispute under Section 19.1 within the
time periods set forth therein, then either Party, under this Section 19.2, may refer the
Dispute to an expert, hereinafter referred to as the “Expert”, for consideration of the
Dispute and to obtain a recommendation from the Expert as to the resolution of the
Dispute:
Provided, that, unless the Dispute is of a type required by this Agreement to be referred
to an Expert under this Section 19.2, neither Party shall be compelled to mediate the
Dispute pursuant to this Section 19.2 and either Party may elect to commence arbitration
of the Dispute under Section 19.3, in which case the provisions of Section 19.3 shall be
applicable.
(b)
The Party initiating submission of the Dispute to the Expert shall provide the other Party
with a notice stating that it is submitting the Dispute to an Expert and nominating the
person it proposes to be the Expert. The other Party shall, within fifteen (15) Days of
receiving such notice, notify the initiating Party whether such person is acceptable. If the
Party receiving such notice fails to respond or notifies the initiating Party that the person
is not acceptable, the Parties shall meet and discuss in good faith for a period of ten (10)
Days to agree upon a person to be the Expert. If the Parties are unable to agree, the
responding Party shall by the end of such ten (10) Day period nominate a person to be
an Expert, whereupon the two nominated persons shall meet and agree upon a third
person who shall be the Expert. Failing such agreement by the nominated persons, the
Expert shall be selected by the International Chamber of Commerce.
Provided, that no Expert pursuant to this Section 19.2 shall be a national of the
jurisdiction of either Party to this Agreement or of the jurisdiction of any shareholder or
group of shareholders holding more than five percent (5%) of the Company or the Gas
Supplier nor shall any such Expert be an employee or agent or former employee or agent
or have a material interest in the business of any such person.
(c)
(i)
Consideration of the Dispute by an Expert shall be initiated by the Party who is
seeking consideration of the Dispute by concurrently submitting to both the
Expert and the other Party, written materials setting forth:
(A)
a description of the Dispute;
(B)
a statement of the Party’s position, and whether a hearing is requested
by such Party; and
(C)
copies of records supporting the Party’s position.
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Gas Supply Agreement
(ii)
Within ten (10) Days of the date that a Party has submitted the materials
described in Section 19.2(c)(i), the other Party may submit to the Expert: (if
submitted to the Expert, such materials shall be concurrently submitted to the
other Party) written materials setting forth;
(A)
a description of the Dispute;
(B)
a statement of the Party’s position, and (if not already requested)
whether a hearing is requested by such Party; and
(C)
copies of any records supporting the Party’s position.
The Expert shall consider any such information submitted by the responding Party within
the period provided in Section 19.2(c)(ii) and, in the Expert’s discretion, may consider any
additional information submitted by either Party at a later date, but in such event the other
Party shall be concurrently provided with such information and shall be allowed a
reasonable time to respond thereto.
(d)
The Parties shall not be entitled to apply for discovery of documents, but shall have
access to the other Party’s relevant records and to receive copies of the records
submitted by the other Party.
(e)
Each Party shall designate one person knowledgeable about the issues in Dispute who
shall be available to the Expert to answer questions and provide any additional
information requested by the Expert. Except for such person, a Party shall not be
required to, but may, provide oral statements or presentations to the Expert or make any
particular individuals available to the Expert. If a hearing is requested by either Party
pursuant to Section 19.2(c), the Expert shall nominate a time and place for a hearing of
the Parties on the Dispute.
(f)
Except as provided in Section 19.2(h) with respect to the payment of costs, the
proceedings shall be without prejudice to any Party and any evidence given or
statements made in the course of this process may not be used against a Party in any
other proceedings. The process shall not be regarded as arbitration and the laws relating
to commercial arbitration shall not apply. Except as expressly provided in this Section
19.2 or elsewhere in this Agreement or unless the Parties agree in writing signed by both
Parties at the time the Expert is selected stating that the decision of the Expert will be
binding (in which case, the determination of the Expert shall be binding), the
determination of the Expert shall not be binding.
(g)
When consideration of the Dispute by an Expert is initiated, the Expert shall be requested
to provide a recommendation within fifteen (15) Days after the ten (10) Day response
period provided in Section 19.2(c)(ii) above has run. If the Expert’s recommendation is
given within such fifteen (15) Day period, or if the Expert’s recommendation is given at a
later time and neither Party has at such time initiated any other proceeding concerning
the Dispute (except for such Disputes where the Expert’s determination is final and
binding on the Parties), the Parties shall review and discuss the recommendation with
each other in good faith for a period of ten (10) Days following delivery of the
recommendation before proceeding with any other actions.
(h)
If a Party does not accept the recommendation of the Expert with respect to the Dispute
(except for such Disputes where the Expert’s determination is final and binding on the
Parties), it may initiate arbitration proceedings under Section 19.3;
Provided, that prior to initiating the arbitration proceedings it shall have paid all costs of
the Expert (including the reimbursement of any costs paid to the Expert by the other
Party) and all out-of-pocket costs of the other Party. Similarly, if the Expert has not
submitted its recommendation within the time period provided in Section 19.2(g), a Party
may initiate arbitration proceedings under Section 19.3, provided that prior to initiating the
arbitration proceedings it shall have paid all costs of the Expert (including the
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Gas Supply Agreement
reimbursement of any costs paid to the Expert by the other Party). Notwithstanding the
foregoing provisions of this Section 19.2(h), the Parties shall be bound by the decision of
the Expert pending the resolution of the Dispute by arbitration and shall not be excused
from performance or be entitled to additional time for performance by reason of the
Expert’s decision and any discrepancy in respect thereof or the instigation of such
arbitration.
(i)
19.3
Except as provided in Section 19.2(h), the costs of engaging an Expert shall be borne
equally by the Parties and each Party shall bear its own costs in preparing materials for,
and making presentations to, the Expert. The Expert shall have the power to award
interest and the provision for such interest on late payments shall run for the entire period
of any late payment of any amount determined to be due and owing.
Arbitration
(a)
The Parties irrevocably agree that any Dispute not resolved following the procedures
described in Section 19.1 and 19.2 shall, (subject only to the provisions of Section
19.3(b) of this Agreement) be finally settled by means of arbitration, which, except as
provided in Section 19.3(b), shall be in accordance with the Rules of Procedure for
Arbitration Proceedings, hereinafter referred to as the “ICSID Rules”, of the International
Centre for the Settlement of Investment Disputes, hereinafter referred to as the “Centre”,
established pursuant to the Convention on the Settlement of Investment Disputes
between States and Nationals of other States 1965 hereinafter referred to as the
“Convention”, and, except as provided in Section 19.3(b), the Parties accordingly
irrevocably and unconditionally agree to submit themselves and any such Dispute to the
jurisdiction of the Centre. For the purposes specified in Articles 25(1) and 25(2)(b) of the
Convention with respect to the jurisdiction of the Centre pursuant to the Convention, the
Parties irrevocably agree that (a) any such Dispute is a legal dispute arising directly out
of an investment between a Contracting State and a national of another Contracting State
and (b) the Company is and shall at all times remain a national of another Contracting
State by reason of foreign control unless and until (by reason of any sale or transfer of
Ordinary Share Capital by Foreign Investors other than as a result of an act or action
proscribed under Section 10.2(a) of the Implementation Agreement) the amount of the
Ordinary Share Capital held by Foreign Investors is in the aggregate less than fifty-one
percent (51%) of the Ordinary Share Capital of the Company. Where there is a reduction
in the amount or percentage of Ordinary Share Capital held by Foreign Investors that
results from such a proscribed act or action, such reduction shall not be included in the
determination of the percentage ownership of Ordinary Share Capital by Foreign
Investors.
(b)
In the event that:
(i)
any request for arbitration made in pursuance of Section 19.3(a) and Article 36 of
the Convention is not registered by the Secretary-General under Article 36(3) of
the Convention; or
(ii)
the Centre or the arbitral tribunal fails or refuses to assume or to exercise
jurisdiction or to continue to exercise jurisdiction with respect to any Dispute
referred to it; or
(iii)
for any other reason the Dispute cannot be finally determined by arbitral
proceedings pursuant to the ICSID Rules,
then any such Dispute shall be determined by means of arbitration in accordance with the
Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”);
provided, that, notwithstanding the foregoing, any arbitration to be conducted in Dhaka,
Bangladesh pursuant to this Section 19.3 shall be carried out under the provision of
Arbitration Act 1940 (Act X of 1940) of Bangladesh.
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Gas Supply Agreement
(c)
Any arbitral proceeding under this Section 19.3 shall be conducted in Dhaka,
Bangladesh;
Provided, that if the Company desires that the arbitration be conducted outside of
Bangladesh, the arbitration shall be carried out at the seat of the Singapore International
Arbitration Center in the Republic of Singapore and the Company shall pay all of the Gas
Supplier’s costs of the arbitration, as and when incurred by the Gas Supplier, including
the out of pocket costs of the arbitration of the Gas Supplier in excess of the costs that
would have been otherwise incurred by the Gas Supplier had the arbitration been
conducted in Dhaka, Bangladesh, (the “Incremental Costs”). The arbitrator shall resolve
any Disputes as to whether a cost would have been incurred in connection with the
arbitration in Dhaka, Bangladesh or are Incremental Costs. The arbitrator may order that
the Gas Supplier bear its own Incremental Costs in part or in full if he finds that the Gas
Supplier’s claim or defense in the arbitration was spurious and without any merit
whatsoever, and the Gas Supplier shall pay the amount ordered:
Provided, that if a matter in Dispute involves a sum of seven million, five hundred
thousand Dollars ($7,500,000) or more, or the legality, validity or enforceability of this
Agreement, or the termination of this Agreement, the arbitration shall, unless otherwise
agreed by the Parties, be conducted in Singapore, and, in such case, each Party shall
pay its own costs of arbitration as and when incurred, unless such costs are ordered by
the arbitrator to be paid by one Party, in which case they shall be paid by such Party.
(d)
The Parties agree that the arbitral tribunal constituted in pursuance of a request for
arbitration made under Sections 19.3(a) or (b), shall consist of a sole arbitrator who shall
be a person who has held judicial office for a period of not less than three (3) years in a
court of record in England or in a jurisdiction whose laws are substantially derived from
the common law of England. The Parties further agree that, except in the case of an
appointment made by the Chairman of the Administrative Council pursuant to Article 38
of the Convention and Rule 4(1) of the ICSID Rules, any person appointed as sole
arbitrator need not be a person designated to serve on the Panel of Arbitrators
constituted under Section 4 of Chapter I of the Convention.
(e)
No arbitrator appointed pursuant to this Section 19.3 shall be a national or resident of the
jurisdiction of either Party or any shareholder or group of shareholders owning directly or
indirectly five percent (5%) or more of the Ordinary Share Capital, nor shall any such
arbitrator be a shareholder or employee or agent or former employee or agent of, or have
or have had any material interest, directly or indirectly, in the business of or in, any Party
or any such person.
(f)
Subject (in the case of arbitral proceedings under Section 19.3(a)) to the provision of
Section 5 of Chapter IV of the Convention and Chapter VII of the ICSID Rules, each
Party hereby irrevocably undertakes:
(g)
(i)
to treat any arbitral award or procedural order made by the arbitral tribunal
constituted pursuant to this Section 19.3 as final and binding; and
(ii)
undertakes to comply with and to carry out any such arbitral award or procedural
order, fully and without delay;
Without prejudice to the provisions of Article 47 of the Convention and Rule 39 of ICSID
Rules (in the case of any arbitral proceeding begun in pursuance of Section 19.3(a)), the
Parties agree that the arbitral tribunal may, upon the application of either Party, order a
Party or the Parties to take such interim measure or measures of protection as the
arbitral tribunal may consider necessary with respect to the subject matter of the Dispute
or any ancillary claim referred to it, the maintenance or efficient conduct of the arbitration
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Gas Supply Agreement
or the preservation of the rights and interest of any Party under or with respect to this
Agreement and the arbitration agreements set forth in this Section 19.4, including,
without limitation, the making of an order requiring any Party to refrain from filing or
pursuing or to terminate or withdraw any action, suit or proceeding in any court of
competent jurisdiction or, to the extent not prohibited by law, other authority which has
(directly or indirectly) a connection with the subject matter of the arbitral proceeding or
jurisdiction relating to such subject matter, and the Parties agree to abide by and comply
with such order(s).
(h)
(i)
proceedings brought with a view to recourse or appeal against or revision or the
annulment of any arbitral award or procedural order made by the arbitral tribunal;
or
(ii)
proceedings in which relief or remedy is sought by way of injunction or other
judicial order (interlocutory or final) which would have the effect (directly or
indirectly) of restraining or impeding the maintenance or prosecution by either
Party of any arbitral proceeding initiated in pursuance of Sections 19.4(a) or (b).
(i)
The language of the arbitration shall be in English.
(j)
The arbitration agreement set forth in this Section 19.3 shall be:
(k)
19.4
Until such time as any arbitral proceedings begun in pursuant of Sections 19.3(a) or (b)
have been finally concluded (and, for this purpose, all rights of appeal, if any, shall have
been exhausted), except for proceedings brought exclusively for the purpose of
recognition and enforcement of any arbitral award or procedural order made by an
arbitral tribunal duly constituted hereunder, each Party irrevocably agrees not to initiate
any proceedings, file any action or suit in any court of competent jurisdiction or before
any judicial or other authority arising under, out of, in connection with or relating to this
Agreement, the arbitration agreements set forth in this Section 19.3, any Dispute
(whether or not any such Dispute shall have been referred to arbitration in pursuance of
Sections 19.3(a) and (b)), the subject matter of any Dispute or any arbitral proceeding
begun in pursuance of Sections 19.3(a) or (b), including without limitation:
(i)
governed by and construed in accordance with the laws of England and Wales;
and
(ii)
treated as an agreement independent of and separable from the other terms of
this Agreement and, accordingly, a determination or ruling by an arbitral tribunal
properly constituted in pursuance of Section 19.3(a), (b) or (c) that this
Agreement or any provision hereof (other than Section 19.3) is invalid, illegal or
unenforceable, shall not invalidate the arbitration agreement set forth in this
Section 19.3.
If any Dispute raises issues which are substantially the same or connected with issues
raised in a related dispute between the Company and BPDB under the Power Purchase
Agreement and if the related dispute has already been referred for determination to
arbitration and if referral of the related Dispute hereunder would not impair or adversely
affect the rights or interests of the Parties, the Company and the Gas Supplier hereby
agree that, subject to payment of any compensation required under Section 19.3(c), the
Dispute shall be referred to the same arbitral tribunal constituted to determine the related
dispute.
Commercial Acts
The Gas Supplier hereby unconditionally and irrevocably agrees that the execution, delivery and
performance by it of this Agreement constitute private and commercial acts of the Gas Supplier.
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Gas Supply Agreement
19.5
Sovereign Immunity; Jurisdiction
(a)
The Gas Supplier irrevocably and unconditionally:
(i)
agrees that should any proceedings be brought against the Gas Supplier in
Bangladesh or against the Gas Supplier’s assets, other than any assets or
property of a type protected by the diplomatic and consular privileges under the
Immunity Act, 1978 of the United Kingdom or the Sovereign Immunities Act, 1976
of the United States or any analogous legislation (collectively, the “Protected
Assets”), in any jurisdiction where any such assets or property of the Gas
Supplier are located to enforce any award or decision of any arbitrator who was
duly appointed under this Agreement to resolve a Dispute between the Parties,
no claim of immunity from such proceedings will be claimed by or on behalf of the
Gas Supplier on behalf of itself or any of its assets or property (other than the
Protected Assets) that it now has or may in the future have in any such
jurisdiction in connection with any such proceeding: Provided, that in no event
shall the Gas Supplier’s Protected Assets include the Transportation Facilities
(including the RMS) and;
(ii)
waives any right of immunity which it or any of its assets (other than the
Protected Assets) now has or may in the future have in any jurisdiction in
connection with any such proceedings; and
(iii)
consents generally to the jurisdiction of any court of competent jurisdiction
(including the courts in Bangladesh) for any action filed by the Company to
enforce any award or decision of any arbitrator(s) or Expert who was duly
appointed under this Agreement to resolve any Dispute between the Parties
(including without limitation, the making, enforcement or execution against or in
respect of any of its assets (other than the Protected Assets) regardless of its
use or intended use) and specifically waives any objection that any such action
or proceeding was brought in an inconvenient forum and agrees not to plead or
claim the same. The Gas Supplier agrees that service of process in any such
action or proceeding may be effected in any manner permitted by the law
applicable to the aforementioned court.
(b)
The Company hereby unconditionally and irrevocably consents generally to the
jurisdiction with respect to itself and any and all of its assets and property that it now has
or may thereafter acquire of the courts of any competent jurisdiction (including the courts
in Bangladesh) for any action or proceeding filed by the Gas Supplier to enforce any
award or decision of any arbitrator(s) or Expert who was duly appointed under this
Agreement to resolve any Dispute between the Parties. The Company waives any
objection that it may now or hereafter have to the venue of any action or proceeding
brought as consented to in this Section 19.5 and specifically waives any objection that
any such action or proceeding was brought in an inconvenient forum and agrees not to
plead or claim the same. The Company agrees that service of process in any such action
or proceeding may be effected in any manner permitted by the law applicable to the
aforementioned court. For the purposes of this Section the courts of Bangladesh and the
courts of any jurisdiction where property of the Company is located shall be courts of
competent jurisdiction. The Company irrevocably waives any and all rights it may have to
enforce any judgment or claim against the Protected Assets in the courts of any
jurisdiction.
(c)
For the avoidance of doubt any dispute or difference between the Parties as to whether
either Party has complied with the affirmation set out in Sections 19.4 and 19.5 shall be
referred for determination under Section 19.2 and shall fall within the definition of
Dispute.
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Gas Supply Agreement
SECTION 20: CONFIDENTIALITY
20.1
Confidential Information
Each of the Parties and their contractors, consultants and agents shall hold in confidence all
documents and other information, whether technical or commercial, supplied to it by or on behalf
of the other Party which is of a confidential nature relating to the design, construction, insurance,
operation, maintenance, management and financing of the Facility or the Transportation Facilities
or the other facilities or reserves of the Gas Supplier, and neither Party shall (except as required
by law or appropriate regulatory authorities, prospective lenders or investors in the Company and
their professional advisers) publish or otherwise disclose or use the same for its own purposes
otherwise than as may be required to perform its obligations under this Agreement.
Notwithstanding the above, nothing herein contained shall preclude the use of provisions similar
to those contained in this Agreement and the other Agreements referred to herein in agreements
prepared and issued in connection with other projects. Material for which confidential treatment is
desired shall be so indicated by marking such material as confidential.
20.2
Exceptions
The provisions of Section 20.1 above shall not apply to:
(a)
any information in the public domain otherwise than by breach of this Agreement;
(b)
information in the possession of the receiving Party thereof before divulged as aforesaid
and which was not obtained under any obligation of confidentiality; and
(c)
information obtained from a third party who is free to divulge the same and which is not
obtained under any obligation of confidentiality.
The obligations of the Parties under this Section 20 shall survive the termination or earlier
expiration of this Agreement for five (5) Years from the date of such termination or expiration, as
the case may be.
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Gas Supply Agreement
SECTION 21: MISCELLANEOUS
21.1
No Waiver
No waiver of a breach or default or grant of an extension for the performance of the obligations of
a Party of its obligations under this Agreement shall be valid and binding unless in writing and
signed by an authorised representative of the Party granting the waiver or extension. No waiver
by either the Gas Supplier or the Company of any default by the other under this Agreement shall
operate as a waiver of any future default, whether of like or different character or nature.
21.2
Third Parties
This Agreement is intended solely for the benefit of the Parties hereto. A person who is not Party
to this Agreement shall have no right under The Contract (Rights of Third Parties) Act 1999 to
enforce any term of this agreement.
21.3
Titles and Headings
The titles and headings of particular provisions of this Agreement are for the purposes of
facilitating administration and shall not be construed as having any substantive effect on the
terms of this Agreement.
21.4
Governing Law
This Agreement and the rights and obligations of the Parties hereunder shall be interpreted,
construed and governed by the laws of England and Wales.
21.5
Severability
The various articles, sections, paragraphs, provisions and clauses of this Agreement are
severable. The invalidity of any portion of this Agreement shall not affect the validity of any other
portion of or the entire Agreement.
21.6
Entire Agreement
This Agreement and Annexures A, B, and C and Figure 1 of this Agreement and any attachments
thereto, which are incorporated herein and hereby made a part hereof by reference, represent the
entire agreement of the Parties relative to the subject matter hereof and supersede all prior
proposals, negotiations and communication relative hereto, oral or written. No modification of this
Agreement, including any modification of an Annexure, shall be effective unless reduced to
writing and duly executed by the Parties.
21.7
Special Damages
Except as expressly provided herein, each of the Parties agree to waive any right it may have to
seek and collect punitive, consequential, indirect, exemplary and special damages from the other
Party that may arise under this Agreement.
21.8
Relationship of the Parties
This Agreement shall not be interpreted or construed to create an association, joint venture
partnership or agency between the Parties or to impose any partnership obligation or liability
upon either Party. Neither Party shall have any right, power or authority to enter into any
agreement or undertaking for, or act as or be an agent or representative of, or to otherwise bind
the other Party. Nothing in this Agreement shall be construed as creating any relationship
between the Parties other than that of the independent sale and purchase of Gas. The Parties do
not intend to create any rights, or grant any remedies to, any third party beneficiary of this
Agreement.
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Gas Supply Agreement
21.9
No Unlawful Commissions
The Company and the Gas Supplier declare and affirm that neither Party has paid, nor has it
undertaken to pay, and that it shall in the future not pay, any unlawful commission, bribe, pay-off,
kick-back and that it has not in any other way or manner paid any sum, whether in Taka or foreign
currency and whether in Bangladesh or abroad, or in any other manner given or offered to give
any gift or present in Bangladesh or abroad to any person or company to procure this Agreement,
and the Company and the Gas Supplier undertake not to engage in any of the said or similar acts
during the Term of, and relative to, this Agreement.
21.10
Amendment of Project Agreements
This Agreement may only be amended by an instrument in writing signed by both Parties hereto.
In addition, no amendment or modification of the Power Purchase Agreement or the
Implementation Agreement as in effect on the date first above mentioned or thereafter shall be
effective if and to the extent that such amendment or modification increases the obligations or
liabilities or affects the rights of the Gas Supplier under this Agreement.
21.11
Language
The language of this Agreement shall be English. All documents, notices, waivers and all other
communication (written or otherwise) between the Parties in connection with this Agreement shall
be in English.
21.12
Successors and Assigns
This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their
respective legal and permitted successors and assigns.
21.13
Counterparts
This Agreement may be executed in any number of counterparts, all of which when taken
together shall constitute one agreement, and be binding on both Parties hereto.
21.14
Comments/Vetting
The Comments/Vetting to be provided by the Ministry of Law & Parliamentary Affairs, Ministry of
Commerce and National Board of Revenue will be a part of this Contract.
70
Gas Supply Agreement
IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the date first
above written.
Titas Gas Transmission and Distribution Company Ltd
By:
Name:
Title:
[NAME OF THE COMPANY]
By:
Name:
Title:
Witness
Witness
[Seal]
[Seal]
71
Gas Supply Agreement
ANNEXURE A
DETERMINATION OF (MONTHLY) COMMISSIONING PERIOD PAYMENT AND (MONTHLY)
COMMERCIAL DELIVERY PAYMENTS
PART 1.
Definitions
Capitalised terms used and not defined in this Annexure A shall be used as defined in this Agreement of
which this Annexure A is a part.
The following terms when used herein have the meanings ascribed to each of them below:
1.1
Gas Price - means the price per MSCF (as adjusted pursuant to Section 9.2) of Gas (including all
delivery and transportation charges and taxes payable in Bangladesh on the purchase and sale
of Natural Gas) delivered by the Gas Supplier to the Facility under the Gas Supply Agreement
during the Commissioning Period and Commercial Delivery Period, as determined from time to
time for each Price Notification Period by the Price Determining Authority, under the Laws of
Bangladesh, as in effect from time to time.
1.2
Initial Delivery Date - means the date on which the Parties expect that initial deliveries of Gas
will commence, which date shall have been notified in writing by the Company to the Gas
Supplier not later than twenty (20) Business Days prior to its occurrence.
1.3
Price Determining Authority - means the relevant and applicable authority or agency within the
GOB that has the legal responsibility under the then-prevailing Laws of Bangladesh for approving
the price of Gas sold hereunder. At the time of execution of this Agreement, the Price
Determining Authority is the Ministry of Energy and Mineral Resources.
1.4
Price Notification Period - means each three (3) Month period (or such shorter or longer period
of one or more Months as is then applicable for the establishment of the price of Natural Gas
under the Laws of Bangladesh) following the Initial Delivery Date commencing on the first Day of
each such period; provided, that the first Price Notification Period shall begin on the date not later
than ten (10) Days prior to the Initial Delivery Date, and end at 12:00 midnight on the immediately
following 31 December, 31 March, 30 June or 30 September, whichever occurs first.
PART 2.
Commissioning Period Payments
Before and during the Commissioning Period, the Company shall pay to the Gas Supplier in
arrears each Month (or portion thereof) the Commissioning Period Payment (as provided below)
for all Gas actually delivered by the Gas Supplier to, and received by the Company at the
Connection Point or the Point of Delivery, as the case may be, pursuant to the terms of this
Agreement during such Month (and pro rated for any portion thereof).
The Commissioning Period Payment for each Month shall be the then-prevailing Gas Price in
effect during the then-prevailing Price Notification Period multiplied by the number of MSCF’s
(assuming that each SCF has 950 Btu, and as adjusted pursuant to Section 9.2) of Gas actually
delivered by the Gas Supplier to, and received by the Company at the Connection Point or the
Point of Delivery, as the case may be, pursuant to the terms of this Agreement during a Month.
PART 3.
3.1
Commercial Delivery Payments After Commercial Delivery Start Date
Determination of Monthly Payments for Gas
The amount payable by the Company for Gas actually delivered by the Gas Supplier to, and
received by the Company at the Point of Delivery pursuant to the terms of this Agreement during
any Month (pro rated for any portion thereof) during the Commercial Delivery Period shall be the
Commercial Delivery Payment. The Commercial Delivery Payment shall be equal to the thenprevailing Gas Price multiplied by the number of MSCF (assuming that each SCF has 950 Btu,
and as adjusted pursuant to Section 9.2) of Gas actually delivered by the Gas Supplier to, and
received by the Company at the Point of Delivery pursuant to the terms of this Agreement during
a Month.
Gas Supply Agreement
ANNEXURE B
MINIMUM GAS SPECIFICATIONS
Unless otherwise provided in this Agreement and except as otherwise agreed by the Parties, all Gas
received or delivered under the terms of this Agreement shall be of the following composition and shall
conform to the following Gas Specifications:
Quality Specification:
1.
Chemical Composition of Gas to be Delivered to the Facility
Minimum
Percent by Volume
85.0
Constituent
Methane ( CH 4 )
2.
Maximum
Percent by Volume
100.00
Ethane ( C 2 H 6 )
0
6.00
Propane ( C 3 H 8 )
0
5.00
Butane ( C 3 H 8 )
0
3.00
Pentane ( C 5 H 12 ) and higher
0
2.00
Hydrogen Sulphide ( H 2 S )
0
0
Carbon dioxide ( CO 2 )
Nitrogen
Oxygen ( O 2 )
Inert (the total combined Nitrogen,
Oxygen, Carbon dioxide and any
other inert compound)
0
2.00
0
0
3.00
1.0
5.00
Other Properties:
Btu Content
Temperature Range
Water Content
Total Sulphur
Solid and Odour
Specific Gravity (air=1)
Liquefiable Hydrocarbons
Pressure Specification:
The Gas delivered hereunder shall have a Btu Content of
not less than 900 Btus (HHV) per SCF.
The temperature of the delivered Gas shall not be less than
59 degrees Fahrenheit (15°C) and not more than 140
degrees Fahrenheit (60°C).
Seven (7) pounds per one million (1,000,000) SCF of Gas.
The Gas shall not contain more than two (2) grains of total
Sulphur (this includes COS, CS2, hydrogen sulphide,
mercaptan Sulphur and mono, di and polysulfide) per
hundred (100) SCF of Gas.
The Gas shall be commercially free from objectionable
odour and dust or other solid matter, liquid matter, gum and
gum forming constituents, toxic or hazardous substances in
concentration which might interfere with the proper
operation of the Facility of which might present a health and
/ or safety hazard to Company’s employee and / or the
general public. No foreign particle/solid material beyond
five (5) microns in size will be associated with the Gas.
0.55 ─ 0.67.
Not more than two (2.0) American gallons per one million
(1,000,000) SCF of Gas.
The pressure at which the Gas will be delivered to the
Facility at the Point of Delivery shall not be less than
160 psig and shall not be more than 200 psig.
Gas Supply Agreement
ANNEXURE C
A.
Location of the Facility and RMS
Refer to Figure 1: To be provided later.
B.
Transportation Facilities
B.1
The Pipeline
Transportation Facilities include a high-pressure gas transmission pipeline and one Regulating
and Metering Station (RMS). The length of transmission pipeline shall be from the source (gas
grid) to inlet of the RMS. Design of the transmission pipeline shall be as per ANSI B 31.8: Gas
Transmission & Distribution Systems. The class rating shall be as per ANSI class 600. The
pipeline must be constructed by the Company or through a Sub-Contractor having proven
experience of constructing at least one ANSI class 600, 8” or above diameter pipeline. Welding
of pipeline shall be as per API Standard 1104. The welding joints must be enveloped with Heat
Shrink Sleeves and the Induction Bends with two-ply polyethylene tapes (Inner Wrap and Outer
Wrap). The pipeline must have a minimum cover of 1.0 meter on top of it. Watercourse (if any)
shall be crossed by open cut method or Horizontal Directional Drilling (HDD) method depending
on the actual site condition. Insulating joints must be used at both ends of the pipeline section.
The pipeline shall also be cathodically protected and the design of the cathodic protection system
shall be on the basis of soil resistivity as measured in the field. Minimum corrosion allowance
shall be 3 mm.
•
Steel line pipe will be required to use in the transmission pipeline, manufactured as per API
Specification SL (latest edition). The line pipe manufacturer must have the authority to use
API Official Monogram for minimum five (5) years. The grade of pipe shall be API 5LX60,
PSL-2 LSAW. The coating of line pipe shall be 3LPE and factory coated. Minimum wall
thickness required to be maintained to operate the pipeline at maximum pressure.
•
Steel Induction Bends must be fabricated from line pipe to be manufactured as per API
Specification 5L (latest edition) by a manufacturer having the authority to use API Official
Monogram for minimum five (5) years. The Induction Bend fabricator must have the authority
to fabricate Induction Bends under applicable certification for minimum five (5) years.
•
Ball Valves shall be actuator operated (for main line valves) and gear operated (for other
valves), full bore, forged body, fully welded, trunnion mounted combined with double block
and bleed, metal-to-metal seal, sealant injection & drain, and must be manufactured as per
API-6D by a manufacturer having the authority to use API Official Monogram for minimum
five (5) years.
•
Dynamic/Pressure Balance Plug Valves shall be gear operated, full bore, forged body, metalto-metal seal; and must be manufactured as per API-6D by a manufacturer having the
authority to use API Official Monogram for minimum five (5) years.
•
The Heat Shrink Sleeve, Tape & Primer manufacturer(s) must have the authority to
manufacture the respective product(s) under applicable certification for minimum five (5)
years.
The high-pressure gas transmission system for supply of Gas to the Facility will be comprised of
20”ND pipeline to be operated at maximum operating pressure of 1440 psig. This pipeline shall
be connected with source at one end at the Connection Point and the other end will terminate at
the inlet of the RMS. The Company shall construct the above described pipeline on a strip of land
of 8 meter width, and such strip of land shall be properly identified and marked as required by the
Natural Gas Safety Rules, 1991, as amended up to 2003. The pipeline shall be capable of
providing gas for the Facility.
2
Gas Supply Agreement
B.2
The RMS
The RMS will be designed, procured, installed, tested, commissioned, by the Company and
operated and maintained by the Gas Supplier as per the provisions of this Agreement (including
Internationally Accepted Standards). The following provides a general description of the RMS
design without limiting the scope or design standards of the RMS and any of the obligations of the
Gas Supplier pursuant to this Agreement:
•
•
RMS Capacity
:
[-] MMSCFD (25% higher than the DCQ)
•
RMS inlet pressure
:
As per pressure availability in the nearest
source
•
RMS delivery/outlet pressure
:
160 psig to 200 psig
•
Velocity limits
:
60ft/sec. before filtration and 120 ft/sec. after
filtration.
•
Gas specification
:
As per Annexure B.
•
Pressure Regulation
:
Working monitor, two identical streams each
of 100% capacity and a full capacity by-pass
with two isolating Dynamic/Pressure Balance
Plug Valves and a Hand-Control Valve.
•
Over Pressure Protection
:
Slam-shut-off valve and relief valves as
necessary
•
Outlet Pressure Fluctuation
:
±1% of set pressure.
•
Metering
:
Dual chamber orifice meter, as per AGA
Report-3 (latest version) together with online
gas chromatograph and flow computer.
•
Other Equipment
:
The RMS shall be equipped with all
necessary heating, filtration, separation,
condensate collection, noise control facilities
and a control-cum-crew building.
All equipment to be of reputable international makes.
The outlet flange of the RMS (located immediately downstream of the RMS and at the boundary
of the Site) shall be the Point of Delivery and this is where the Company Transportation Facilities
shall be connected with the Transportation Facilities under this Agreement. This shall be the
location where the risk of loss and title to all Gas delivered by the Gas Supplier passes to the
Company under this Agreement. The Gas Supplier’s obligation to deliver Gas (conforming to the
Gas Specifications set forth In Annexure B) under this Agreement shall be up to the Point of
Delivery.
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Gas Supply Agreement
B.3
RMS Control Room and Other Facilities
•
RMS land area
:
70mX50m, boundary wall to be constructed
around the entire RMS area. RMS land to
be made available by BPDB with necessary
access for the Gas Supplier as part of the
land for the Power Plant.
•
RMS Control Room
:
One air-conditioned two-storied RMS Control
Building of 12mX12m size to be constructed
inside the RMS Plant area.
•
RMS Crew Dormitory Building
:
One single-storey Dormitory Building of
10mX15m size to be built in the RMS land
outside the plant area.
•
Power Supply
:
Main power shall be drawn from nearby
33KV/11KV source and shall install
necessary power transformer PFI plant and
associated facilities to supply 220v, 50Hz AC
Power to the RMS compound.
•
Others
:
Standby Gas Generator, Deep Tube well,
RMS foundations & walkways, area lighting,
fire fighting, field cabling and communication
interface cabling with the Power station
Control Room-all to be built as part of the
Transportation Facilities.
4