Exhibit 10.11

 

EXECUTION COPY

 

GE PACKAGED POWER, INC.
GE INTERNATIONAL, INC. SUCURSAL DE PERU

 

CONTRACT FOR SALE OF

 

EQUIPMENT AND SERVICES

 

EMPRESA ELECTRICA NUEVA ESPERANZA S.R.L.

 

September 26, 2008

 

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TABLE OF CONTENTS

 

Article 1

Definitions

1

 

 

 

1.1

Definitions

1

 

 

 

1.2

Rules of Interpretation

7

 

 

 

Article 2

Scope of Supply

8

 

 

 

Article 3

Price

8

 

 

 

Article 4

Options

9

 

 

 

Article 5

Price Adjustment - NOT USED

9

 

 

 

Article 6

Payments

9

 

 

 

6.1

Payment Schedule

9

 

 

 

6.2

Payment Security

10

 

 

 

6.3

Effect of Changes in Contract Price

11

 

 

 

6.4

Field Modifications and Offsets

11

 

 

 

Article 7

Buyer’s Obligations

11

 

 

 

7.1

Permits

11

 

 

 

7.2

Permitting Support

11

 

 

 

Article 8

Title Transfer, Delivery, Risk of Loss, Shipment to Storage

11

 

 

 

8.1

Title

11

 

 

 

8.2

Delivery

12

 

 

 

8.3

Risk of Loss

12

 

 

 

8.4

Delivery to Storage

12

 

 

 

Article 9

Schedule and Liquidated Damages for Delay

13

 

 

 

9.1

Drawing Liquidated Damages

13

 

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9.2

Scheduled Delivery Date

13

 

 

 

9.3

Scheduled Liquidated Damages

13

 

 

 

9.4

Limitations

14

 

 

 

Article 10

Performance Guarantees

14

 

 

 

Article 11

Performance Guarantee Testing

15

 

 

 

11.1

Performance Tests

15

 

 

 

11.2

Performance Testing

15

 

 

 

11.3

Emissions Testing

15

 

 

 

11.4

Noise Testing

15

 

 

 

11.5

Cure Period

15

 

 

 

11.6

Cost of Tests and Re-Tests

16

 

 

 

11.7

Degradation

16

 

 

 

11.8

Performance Credits [Not Used in this Contract]

16

 

 

 

Article 12

Aggregate Limitation on Liquidated Damages

16

 

 

 

Article 13

Observation, Inspection and Factory Test

17

 

 

 

13.1

Observation at the Site

17

 

 

 

13.2

Inspections and Tests at Seller’s Facilities

17

 

 

 

13.3

Inspections and Tests at Suppliers’ Facilities

17

 

 

 

13.4

Advance Notice of Intended Readiness To Ship and Inspection

17

 

 

 

13.5

Inspection Not Acceptance

18

 

 

 

Article 14

Warranty

18

 

 

 

14.1

Warranty Period

18

 

 

 

14.2

Warranty

18

 

 

 

14.3

Remedy

18

 

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14.4

Warranty on Remedial Work

19

 

 

 

14.5

Exclusions

19

 

 

 

14.6

Exclusive Remedies and Warranties

20

 

 

 

Article 15

Taxes

20

 

 

 

15.1

Seller Taxes

20

 

 

 

15.2

Buyer Taxes

20

 

 

 

15.3

Invoices

21

 

 

 

15.4

Duty Drawback

21

 

 

 

Article 16

Compliance with Laws, Codes and Standards

21

 

 

 

Article 17

Project Management

21

 

 

 

17.1

Original Equipment Definition

21

 

 

 

17.2

Order Definition Meeting

21

 

 

 

17.3

Project Manager

22

 

 

 

17.4

Automatic Release

22

 

 

 

17.5

Global Sourcing

22

 

 

 

17.6

Electronic Communication

22

 

 

 

Article 18

Changes

22

 

 

 

18.1

Changes Resulting from Changes in Codes and Changes in Law

22

 

 

 

18.2

Changes and Improvements Beyond Scope

22

 

 

 

18.3

Buyer-Initiated Changes

23

 

 

 

18.4

Seller-Initiated Changes

23

 

 

 

18.5

Contents of Draft Change Order

23

 

 

 

18.6

Process for Concluding Change Order

24

 

 

 

18.7

Agreement Required

24

 

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Article 19

Force Majeure Event

24

 

 

 

19.1

Force Majeure Event

24

 

 

 

19.2

Termination for Extended Delay

26

 

 

 

Article 20

Patents

26

 

 

 

20.1

Indemnity

26

 

 

 

20.2

Exclusions

27

 

 

 

20.3

Remedies

27

 

 

 

20.4

Sole Liability

28

 

 

 

Article 21

General Indemnity

28

 

 

 

21.1

General Indemnity

28

 

 

 

21.2

Concurrent Negligence

28

 

 

 

21.3

Notice

28

 

 

 

21.4

“Third Parties” Defined

28

 

 

 

Article 22

Insurance

28

 

 

 

22.1

Worker’s Compensation, General Liability and Automobile Insurance

28

 

 

 

22.2

ARBR/CAR Insurance

29

 

 

 

22.3

All Risk Property Insurance

30

 

 

 

22.4

Failure to Maintain Insurance

30

 

 

 

22.5

Buyer’s Risks

30

 

 

 

Article 23

Suspension

30

 

 

 

23.1

Suspension by Buyer of Work at Site

30

 

 

 

23.2

Suspension by Buyer of Manufacturing

30

 

 

 

23.3

Suspension by Seller

31

 

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Article 24

Termination by Buyer for Convenience

31

 

 

 

Article 25

Termination for Cause

31

 

 

 

25.1

Grounds for Termination by Buyer

31

 

 

 

25.2

Remedy in the Event of Termination by Buyer

32

 

 

 

25.3

Grounds for Termination by Seller

32

 

 

 

25.4

Remedy in the Event of Termination by Seller

33

 

 

 

Article 26

Limitation of Liability

33

 

 

 

26.1

Limitation

33

 

 

 

26.2

Consequential Damages

33

 

 

 

26.3

Sale, Transfer, Assignment to Third Party

34

 

 

 

26.4

Gratuitous Advice

34

 

 

 

26.5

Limitations to Prevail

34

 

 

 

26.6

Limitation of Remedies; Overriding Effect

34

 

 

 

26.7

Obligation to Mitigate

34

 

 

 

Article 27

Proprietary Information

34

 

 

 

27.1

Information Subject to Restriction

34

 

 

 

27.2

Obligations of Receiving Party

35

 

 

 

27.3

Disclosure Pursuant to Legal Process

36

 

 

 

27.4

Intellectual Property

36

 

 

 

27.5

Disclosure by Buyer

36

 

 

 

Article 28

Software License

36

 

 

 

28.1

Grant of License

36

 

 

 

28.2

Third-Party Software

37

 

 

 

28.3

Limitations

37

 

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Article 29

Personal Data Protection

37

 

 

 

Article 30

Export Control

37

 

 

 

30.1

Export Controls

37

 

 

 

30.2

Buyer to Keep Informed

38

 

 

 

30.3

Weapons

38

 

 

 

Article 31

Assignment and Change in Control

38

 

 

 

31.1

Consent Required

38

 

 

 

31.2

Seller’s Right to Assign

38

 

 

 

31.3

Successors and Assigns

39

 

 

 

31.4

Change in Control of Buyer

39

 

 

 

Article 32

Dispute Resolution

39

 

 

 

32.1

Referral to Senior Management

39

 

 

 

32.2

Venue

39

 

 

 

32.3

Equitable Remedies

39

 

 

 

Article 33

Governing Law

40

 

 

 

Article 34

Direct Agreements

40

 

 

 

Article 35

Effective Date

40

 

 

 

Article 36

Seller Performance Security

40

 

 

 

Article 37

Entire Agreement

41

 

 

 

Article 38

Representations

41

 

 

 

38.1

Seller Representations

41

 

 

 

38.2

Buyer Representations

42

 

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Article 39

Miscellaneous Provisions

43

 

 

 

39.1

Third-Party Beneficiaries

43

 

 

 

39.2

Survival

43

 

 

 

39.3

Non-Waiver

43

 

 

 

39.4

Invalidity

43

 

 

 

39.5

No Nuclear Use

43

 

 

 

39.6

Counterparts

43

 

 

 

Attachment 1 - Equipment Scope of Supply

46

 

 

 

Attachment 2 - Schedule Options

60

 

 

 

Attachment 3 - Lien Waiver Form

63

 

 

 

Attachment 4 - Scheduled Delivery Date(s)

65

 

 

 

Attachment 5 - Test Procedures and Protocol

67

 

 

 

Attachment 6 - Stamped Guarantee Sheet

68

 

 

 

Attachment 7 - Services and Special Conditions For On-Site Services (Technical
Advisory Services Only)

69

 

 

 

Attachment 8 - Drawing List & Schedule

75

 

 

 

Attachment 9 - Payment Schedule

81

 

 

 

Attachment 10 - Form of Comfort Letter

82

 

 

 

Attachment 11 - Degradation Table

83

 

 

 

Attachment 12 - Termination Schedule

84

 

 

 

Attachment 13 - Start Up and Commissioning Spares

85

 

 

 

Attachment 14 - GE Parent Guaranty

86

 

 

 

Attachment 15 - Form of Standby Letter of Credit

87

 

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THIS CONTRACT FOR SALE OF EQUIPMENT AND SERVICES (this “Contract”) is entered
into as of the Effective Date by and between:

 

CONSORTIUM OF GE PACKAGED POWER, INC. (GEPPI), a Delaware corporation, having a
principal place of business at 1333 West Loop South, Houston, Texas 77027 USA;
and GE INTERNATIONAL INC. SUCURSAL DE PERU (GEII), a general partnership, having
a principal place of business at Av. Larco 1301 - Oficina, 1902 Torre Parque
Mar, Miraflores 18, Peru (herein referred to collectively as “GE” or “Seller”);
and

 

EMPRESA ELECTRICA NUEVA ESPERANZA S.R.L., a Peruvian limited liability
partnership, having a principal place of business at Av. Victor A. Belaunde Nº
147 Int.; 703 Edificio Real 6 San Isidro Lima, Peru (the “Buyer”),

 

The Buyer and the Seller are referred to herein, individually, as a “Party” and,
collectively, as the “Parties”.

 

RECITALS

 

WHEREAS, the Seller, GEPPI, manufactures, supplies and provides the type of
power generation equipment described in Attachment 1;

 

WHEREAS, the Seller, General Electric International, Inc. Sucursal de Peru,
provides services in support of the installation of such equipment as described
in Attachment 7; and

 

WHEREAS, the Buyer desires to purchase, and the Seller desires to sell the
Equipment, together with certain installation support and Training Services in
connection with Buyer’s Project located in the vicinity of Caleta Cruz,
northwestern Peru (the “Facility”), all subject to the terms set forth herein;

 

NOW, THEREFORE, in consideration of the mutual promises stated herein, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:

 

ARTICLE 1                                               DEFINITIONS

 

1.1                               Definitions

 

As used in this Contract, the following terms have the meanings indicated:

 

(A.)                               “ADVANCE NOTICE OF INTENDED READINESS TO
SHIP” SHALL HAVE THE MEANING ASCRIBED IN SECTION 13.4.

 

(B.)                              “AFFILIATE” SHALL MEAN ANY ENTITY THAT
DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL
WITH A PARTY.  FOR THE PURPOSES OF THIS DEFINITION, “CONTROL” MEANS THE
POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE
DIRECTION OF THE MANAGEMENT AND POLICIES OF THE CONTROLLED ENTITY,

 

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WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES OR PARTNERSHIP OR OTHER
OWNERSHIP INTERESTS OR BY CONTRACT OR OTHERWISE.

 

(C.)                               “BPZ RESOURCES, INC. GUARANTY” SHALL MEAN A
GUARANTEE OF BUYER’S REMAINING PAYMENT OBLIGATIONS UNDER THE CONTRACT IN FORM
AND SUBSTANCE REASONABLY ACCEPTABLE TO THE SELLER.

 

(D.)                              “BUYER” SHALL MEAN THE ENTITY SO IDENTIFIED IN
THE FOREWORD OF THIS CONTRACT.

 

(E.)                               “BUYER TAXES” SHALL MEAN ALL TAXES, DUTIES,
FEES, OR OTHER CHARGES OF ANY NATURE (INCLUDING, BUT NOT LIMITED TO, AD VALOREM,
CONSUMPTION, EXCISE, FRANCHISE, GROSS RECEIPTS, IMPORT, LICENSE, PROPERTY,
SALES, STAMP, STORAGE, TRANSFER, TURNOVER, USE, OR VALUE-ADDED TAXES, AND ANY
AND ALL ITEMS OF WITHHOLDING, DEFICIENCY, PENALTY, ADDITION TO TAX, INTEREST, OR
ASSESSMENT RELATED THERETO), OTHER THAN SELLER TAXES, IMPOSED BY ANY
GOVERNMENTAL AUTHORITY OF ANY COUNTRY ON SELLER AND BUYER OR ITS RESPECTIVE
EMPLOYEES, SUBCONTRACTORS OR SUPPLIERS DUE TO THE EXECUTION OF ANY AGREEMENT OR
THE PERFORMANCE OF OR PAYMENT FOR WORK HEREUNDER.  EQUIPMENT EXPORTED FROM THE
UNITED STATES ARE PRESUMED TO BE EXEMPT FROM BUYER TAXES LEVIED WITHIN THE
UNITED STATES, EXPECT AS PROVIDED IN ARTICLE 15 OF THIS CONTRACT.  WHEN
REQUESTED BY SELLER, BUYER AGREES TO FURNISH WITHOUT CHARGE EVIDENCE OF TAX OR
DUTY EXEMPTION ACCEPTABLE TO THE TAXING OR CUSTOMS AUTHORITIES.  FURTHERMORE, IF
BUYER ARRANGES FOR EXPORT SHIPMENT, BUYER AGREES TO PROVIDE SELLER, WITHOUT
CHARGE, AN EXPORT BILL OF LADING.

 

(F.)                                 “CHANGE IN CONTROL” SHALL MEAN THE
OCCURRENCE OF ONE OR MORE OF THE FOLLOWING EVENTS:

 

(I)            BPZ RESOURCES, INC. SHALL CEASE TO BE THE INDIRECT BENEFICIAL
OWNER OF A MAJORITY OF THE EQUITY INTEREST OF BUYER;

 

(II)           GENERAL ELECTRIC COMPANY SHALL CEASE TO BE THE INDIRECT OWNER OF
A MAJORITY OF THE EQUITY INTEREST IN EITHER OF THE SELLERS;

 

(III)          ANY SALE, LEASE, EXCHANGE, OR OTHER TRANSFER (IN ONE TRANSACTION
OR A SERIES OF RELATED TRANSACTIONS) OF A MAJORITY OF THE OPERATING ASSETS OF
THE SELLER TO ANY ENTITY.

 

(G.)                              “CHANGE IN LAW” SHALL MEAN A CHANGE TO A LAW,
OR A CHANGE IN THE INTERPRETATION OR APPLICATION OF A LAW BY THE COGNIZANT
EXECUTIVE OR JUDICIAL AUTHORITIES OCCURRING AFTER THE EFFECTIVE DATE.

 

(H.)                              “CHANGE ORDER” SHALL MEAN A WRITTEN AGREEMENT
TO CHANGE THE EQUIPMENT OR SERVICES WHICH DESCRIBES THE CHANGE, IDENTIFIES THE
WRITING AS A CHANGE ORDER, SETS OUT ADJUSTMENTS, IF ANY, IN THIS CONTRACT PRICE
AND ANY OTHER PROVISION OF THIS CONTRACT WHICH IS AFFECTED, AND IS SIGNED BY THE
PARTIES.

 

(I.)                                  “CODES AND STANDARDS” SHALL HAVE THE
MEANING ASCRIBED IN ARTICLE 16 OF THIS CONTRACT.

 

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(J.)                                  “COES” SHALL MEAN THE COMITÉ DE OPERACIÓN
ECONÓMICA DEL SISTEMA, WHICH COORDINATES DISPATCH FOR THE SYSTEM TO WHICH THE
PROJECT IS TO BE INTERCONNECTED.

 

(K.)                               “CONTRACT CURRENCY” SHALL MEAN THE CURRENCY
IN WHICH THIS CONTRACT PRICE IS STATED.

 

(L.)                                  “CONTRACT PRICE” SHALL MEAN THE TOTAL FIRM
PRICE AS CONSIDERATION FOR THE EQUIPMENT AND THE SERVICES, AS SET FORTH IN
ARTICLE 3 OF THIS CONTRACT, AND AS MAY BE ADJUSTED FROM TIME TO TIME IN
ACCORDANCE WITH THIS CONTRACT.

 

(M.)                            “CUSTOMER COLLABORATION SYSTEM” SHALL HAVE THE
MEANING ASCRIBED IN ARTICLE 17.6 OF THIS CONTRACT.

 

(N.)                              “DATA SUBJECT” SHALL HAVE THE MEANING ASCRIBED
IN ARTICLE 29 OF THIS CONTRACT.

 

(O.)                              “DAY”OR”DAYS” SHALL MEAN A CALENDAR DAY,
INCLUDING SATURDAYS, SUNDAYS, AND HOLIDAYS, EXCEPT THAT IN THE EVENT THAT AN
OBLIGATION IS DUE FOR PERFORMANCE ON A SATURDAY, SUNDAY OR NATIONAL LEGAL
HOLIDAY OF ANY COUNTRY WHERE AN OBLIGATION PURSUANT TO THIS CONTRACT IS DUE TO
BE PERFORMED, THE OBLIGATION SHALL BE DEEMED DUE ON THE NEXT DAY THEREAFTER WHEN
BUSINESS IS REGULARLY CONDUCTED IN SUCH LOCATION.

 

(P.)                              “DELIVERY” SHALL HAVE THE MEANING ASCRIBED IN
ARTICLE 8.2 OF THIS CONTRACT.

 

(Q.)                              “DIRECT AGREEMENT” SHALL HAVE THE MEANING
ASCRIBED IN ARTICLE 34 OF THIS CONTRACT.

 

(R.)                                 “DOCUMENTATION” SHALL HAVE THE MEANING
ASCRIBED IN ARTICLE 28 OF THIS CONTRACT.

 

(S.)                               “DOWN PAYMENT” SHALL MEAN THE INITIAL PAYMENT
DESCRIBED IN ARTICLE 6.1 OF THIS CONTRACT.

 

(T.)                                 “EBITDAX” SHALL BE DEFINED AS EARNINGS
BEFORE INTEREST, TAXES, DEPRECIATION, AMORTIZATION, AND EXPLORATORY EXPENSES AS
REPORTED IN THE UNAUDITED FINANCIAL STATEMENTS PROVIDED BY BUYER’S PARENT
COMPANY, BPZ RESOURCES, INC., PURSUANT TO US GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.

 

(U.)                              “EFFECTIVE DATE” SHALL MEAN THE DATE DESCRIBED
IN ARTICLE 35 OF THIS CONTRACT.

 

(V.)                              “ELIGIBLE ASSIGNEE” SHALL HAVE THE MEANING
ASCRIBED IN ARTICLE 31.1 OF THIS CONTRACT.

 

(W.)                            “EPC CONTRACTOR” SHALL MEAN SUCH GENERAL
CONTRACTOR ENGAGED BY BUYER TO INSTALL THE EQUIPMENT AND CONSTRUCT THE PROJECT.

 

(X.)                                “EQUIPMENT” SHALL MEAN ALL OF THE EQUIPMENT
DESCRIBED IN THE “EQUIPMENT” PORTION OF ARTICLE 2, SCOPE OF SUPPLY.

 

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(Y.)                              “FACILITY” SHALL HAVE THE MEANING ASCRIBED IN
THE RECITALS OF THIS CONTRACT.

 

(Z.)                                “FORCE MAJEURE” SHALL HAVE THE MEANING
ASCRIBED IN ARTICLE 19 OF THIS CONTRACT.

 

(AA.)                         “GOVERNING LAW” SHALL HAVE THE MEANING ASCRIBED IN
ARTICLE 33 OF THIS CONTRACT.

 

(BB.)                       “INDEMNIFIED PARTY” SHALL HAVE THE MEANING ASCRIBED
IN ARTICLE 21 OF THIS CONTRACT.

 

(CC.)                         “INDEMNIFYING PARTY” SHALL HAVE THE MEANING
ASCRIBED IN ARTICLE 21 OF THIS CONTRACT.

 

(DD.)                       “LAW”OR”LAWS” SHALL MEAN THOSE LAWS, REGULATIONS,
DECREES OR SIMILAR ORDERS WITH MANDATORY EFFECT ISSUED BY THE LEGISLATIVE,
JUDICIAL OR EXECUTIVE BRANCH OF ANY RELEVANT GOVERNMENT, IN EFFECT AS OF THE
EFFECTIVE DATE TO THE EXTENT SUCH LAWS, REGULATIONS, DECREES OR SIMILAR ORDERS
ARE APPLICABLE TO THE SCOPE OF THIS CONTRACT.

 

(EE.)                         “LENDERS” SHALL MEAN THE LENDERS (AS DEFINED IN
THE FINANCING AGREEMENTS MADE OR TO BE MADE BETWEEN BUYER AND EACH PARTY NAMED
THEREIN AS A FINANCING PARTY) AND ANY AND ALL LENDERS PROVIDING INTERIM OR LONG
TERM FINANCING OR CREDIT SUPPORT IN RELATION TO THE PROJECT AND ANY TRUSTEE OR
AGENT ACTING ON THEIR BEHALF.  “LENDERS” SHALL NOT INCLUDE BUYER, BUT SHALL
INCLUDE AFFILIATES OF BUYER OR SUCH AFFILIATES’ LENDERS PROVIDING FINANCING OR
CREDIT SUPPORT, OTHER THAN EQUITY, TO BUYER (INCLUDING VIA ON-LENDING THROUGH AN
AFFILIATE) IN CONNECTION WITH THE OWNERSHIP, DEVELOPMENT, CONSTRUCTION,
OPERATION, OR MAINTENANCE OF THE PROJECT.

 

(FF.)                             “LOCAL LAWS” SHALL HAVE THE MEANING ASCRIBED
IN ARTICLE 16 OF THIS CONTRACT.

 

(GG.)                       “MAJOR COMPONENTS” SHALL MEAN THE TURBINE WITH ITS
BASE, THE GENERATOR WITH ITS BASE, THE AIR INTAKE SYSTEM COMPONENTS, AND THE
MAIN AUXILIARY SKID CONTAINING THE GAS TURBINE LUBE OIL RESERVOIR AND STARTING
SYSTEM.

 

(HH.)                       “MINIMUM PERFORMANCE GUARANTEES” SHALL MEAN
NINETY-FIVE PERCENT (95%) OF THE PERFORMANCE GUARANTEE FOR OUTPUT AND ONE
HUNDRED AND FIVE PERCENT (105%) OF THE PERFORMANCE GUARANTEE FOR HEAT RATE.

 

(II.)                               “MUST MEET REMEDY” IS AN OBLIGATION ON THE
PART OF SELLER TO REPAIR OR REPLACE THE EQUIPMENT OR UNIT SO THAT THE EQUIPMENT
OR UNIT MEETS A DESIGNATED PERFORMANCE CRITERIA (E.G., THE MINIMUM PERFORMANCE
GUARANTEES AND THE PERFORMANCE GUARANTEES FOR EMISSIONS AND NOISE).

 

(JJ.)                               “NATIONAL LAWS” SHALL HAVE THE MEANING
ASCRIBED IN ARTICLE 16 OF THIS CONTRACT.

 

(KK.)                         “NOTICE OF READINESS TO SHIP” SHALL MEAN SELLER’S
WRITTEN NOTICE OF READINESS TO SHIP.

 

(LL.)                               “ON-SITE SERVICES” ARE DESCRIBED IN
ATTACHMENT 7 TO THIS CONTRACT.

 

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(MM.)                   “OPERATIONAL SPARE PARTS” SHALL MEAN THOSE PARTS THAT
THE BUYER MAY ELECT TO PURCHASE AS A CHANGE ORDER TO THIS CONTRACT FOR THE
PURPOSE OF SUPPORTING OPERATIONAL RELIABILITY.

 

(NN.)                       “ORDER DEFINITION MEETING” SHALL MEAN A PROJECT
KICK-OFF MEETING BETWEEN THE SELLER’S PROJECT EXECUTION TEAM AND THE BUYER’S
PROJECT TEAM.

 

(OO.)                       “OPTIONS” SHALL HAVE THE MEANING ASCRIBED IN
ARTICLE 4 OF THIS CONTRACT.

 

(PP.)                       “OWNER” SHALL MEAN THAT CORPORATION, PARTNERSHIP,
LIMITED LIABILITY COMPANY, OR INDIVIDUAL WHICH OWNS THE FACILITY IN WHICH THE
EQUIPMENT WILL BE INSTALLED.

 

(QQ.)                       “PARTY”AND”PARTIES” SHALL HAVE THE MEANINGS ASCRIBED
IN THE FOREWORD TO THIS CONTRACT.

 

(RR.)                             “PAYMENT SCHEDULE” SHALL MEAN THE SCHEDULE OF
PAYMENTS DESCRIBED IN ARTICLE 6.1.

 

(SS.)                         “PAYMENT SECURITY” SHALL HAVE THE MEANING ASCRIBED
IN ARTICLE 6.2 OF THIS CONTRACT.

 

(TT.)                             “PERFORMANCE GUARANTEES” SHALL MEAN THE
GUARANTEED VALUES IDENTIFIED ON THE STAMPED GUARANTEE SHEET ATTACHED HERETO AS
ATTACHMENT 6.

 

(UU.)                       “PERSONAL DATA” SHALL HAVE THE MEANING ASCRIBED IN
ARTICLE 29 OF THIS CONTRACT.

 

(VV.)                       “PROJECT” SHALL MEAN BUYER’S POWER GENERATION
PROJECT.

 

(WW.)                   “READINESS TO SHIP (RTS)” SHALL MEAN, SUBJECT TO
SECTIONS 8.2 AND 13.4, THE UNIT HAS BEEN ASSEMBLED AND PACKAGED THROUGH SELLER’S
MANUFACTURING PROCESS, COMPLETED FACTORY TESTING, COMPLETED DRESS OUT PROCESS,
EXPORT PACKED, COMPLETED PACKING LIST AND HAS BEEN VERIFIED BY SELLER AS MEETING
ALL OF SELLER’S QUALITY CONTROL PROCEDURES AND INSPECTIONS.

 

(XX.)                           “SCHEDULED DELIVERY DATE(S)” SHALL MEAN THE
DATE(S) BY WHICH SELLER WILL PROVIDE NOTICE OF READINESS TO SHIP FOR THE
RELEVANT UNIT(S), AS SET FORTH IN ATTACHMENT 4 HERETO.

 

(YY.)                       “SCOPE OF SUPPLY” SHALL MEAN THE EQUIPMENT PLUS THE
SERVICES, AS SET FORTH IN ATTACHMENT 1, SCOPE OF SUPPLY.

 

(ZZ.)                           “SELLER” SHALL MEAN THE ENTITY SO IDENTIFIED IN
THE FOREWORD TO THIS CONTRACT.

 

(AAA.)                   “SELLER TAXES” SHALL MEAN CORPORATE AND INDIVIDUAL
TAXES THAT ARE MEASURED BY NET INCOME OR PROFIT IMPOSED BY ANY GOVERNMENTAL
AUTHORITY OF ANY COUNTRY ON SELLER, ITS EMPLOYEES, SUBCONTRACTORS OR SUPPLIERS
DUE TO THE EXECUTION OF ANY AGREEMENT OR THE PERFORMANCE OF OR PAYMENT FOR WORK
HEREUNDER, EXCEPT IN THE CASE OF

 

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WITHHOLDING TAX FOR INCOME ON PAYMENTS TO SELLER WHICH IS ADDRESSED IN
ARTICLE 15 OF THE CONTRACT.

 

(BBB.)                “SERVICES” SHALL MEAN, TO THE EXTENT APPLICABLE, ALL OF
THE THOSE SERVICES DESCRIBED IN THE “SERVICES” PORTION OF ATTACHMENT 1, “SCOPE
OF SUPPLY”, AND ATTACHMENT 7 “SERVICES AND SPECIAL CONDITIONS FOR ON-SITE
SERVICES”.

 

(CCC.)                   “SITE” SHALL MEAN THE LOCATION OF THE PROJECT AND PLACE
WHERE THE EQUIPMENT WILL BE INSTALLED, AS INDICATED IN THE RECITALS TO THIS
CONTRACT.

 

(DDD.)                “SITE CONDITIONS” SHALL HAVE THE MEANING ASCRIBED IN
ATTACHMENT 1 OF THIS CONTRACT.

 

(EEE.)                   “SOFTWARE” MEANS A COMPUTER PROGRAM OR COMPILATION OF
DATA THAT IS FIXED IN ANY TANGIBLE MEDIUM OF EXPRESSION, OR ANY STORAGE MEDIUM
FROM WHICH THE PROGRAM MAY BE PERCEIVED, REPRODUCED OR OTHERWISE COMMUNICATED,
EITHER DIRECTLY OR WITH THE AID OF A MACHINE OR DEVICE, AND SHALL INCLUDE
WITHOUT LIMITATION ANY OF SELLER’S PROPRIETARY OPERATING SOFTWARE, PROVIDED FOR
THE ORDINARY OPERATION OF THE EQUIPMENT, ANY OPTIONAL SOFTWARE TO ENHANCE THE
OPERATION OF THE EQUIPMENT, AS WELL AS ANY UPGRADES OR REVISIONS OF THIS
MATERIAL THE SELLER PROVIDES IN FULFILLMENT OF A SPECIFIC WRITTEN COMMITMENT OR
OTHERWISE.

 

(FFF.)                         “SPARE PARTS” SHALL MEAN THOSE CERTAIN START UP
AND COMMISSIONING SPARES PROVIDED BY SELLER PURSUANT TO THIS CONTRACT, FOR WHICH
A TYPICAL LIST IS INCLUDED IN ATTACHMENT 13.

 

(GGG.)                “STANDBY LETTER OF CREDIT” SHALL MEAN A STANDBY LETTER OF
CREDIT GENERALLY IN ACCORDANCE WITH THE SELLER’S FORM ATTACHED AS ATTACHMENT 15.

 

(HHH.)                “STATE LAWS” SHALL BE THOSE STATE LAWS THAT ARE:

 

(I)                                     IDENTIFIED BY BUYER IN ATTACHMENT 1,
SCOPE OF SUPPLY,

 

(II)                                  IN EFFECT AS OF THE EFFECTIVE DATE, AND

 

(III)                               AGREED TO BE INCORPORATED INTO THE
MANUFACTURING OF THE UNIT(S) BY SELLER.  IF NO STATE LAWS ARE SET FORTH IN
ATTACHMENT 1 AND AGREED TO BY SELLER, THE MANUFACTURING PROCESS SHALL NOT
INCORPORATE ANY CONSIDERATION OF STATE LAWS.

 

(III.)                            “SUBCONTRACTOR(S)” SHALL MEAN ANY CORPORATION,
PARTNERSHIP, OR INDIVIDUAL HAVING A CONTRACT WITH THE SELLER TO SUPPLY LABOR OR
OTHER SERVICES TO BE PERFORMED AT THE SITE IN CONNECTION WITH THIS CONTRACT.

 

(JJJ.)                            “SUPPLIER(S)” SHALL MEAN ANY CORPORATION,
PARTNERSHIP, OR INDIVIDUAL HAVING A CONTRACT WITH THE SELLER TO SUPPLY MATERIAL,
EQUIPMENT, LABOR, GOODS, OR SERVICES TO THE SELLER IN CONNECTION WITH ITS
OBLIGATIONS UNDER THIS CONTRACT, OTHER THAN LABOR OR OTHER SERVICES TO BE
PERFORMED AT THE SITE.

 

6

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(KKK.)                   “TERMINATION SCHEDULE” SHALL MEAN THE SCHEDULE OF
TERMINATION CHARGES DESCRIBED IN ATTACHMENT 12 OF THIS CONTRACT.

 

(LLL.)                            “UNIT” SHALL MEAN A SINGLE GAS TURBINE AND ITS
ASSOCIATED GENERATOR, TOGETHER WITH THOSE ACCESSORIES ASSOCIATED ONLY WITH THAT
GAS TURBINE GENERATOR PACKAGE.

 

(MMM.)          “UNIT PRICE” SHALL HAVE THE MEANING ASCRIBED IN ARTICLE 3 OF
THIS CONTRACT.

 

(NNN.)                “UNIMPEDED ACCESS” SHALL MEAN THAT DURING ANY PERIOD IN
WHICH THE SELLER IS ENTITLED TO ACCESS TO ANY UNIT IN ACCORDANCE WITH THIS
CONTRACT, THE BUYER SHALL ENSURE THAT  (1) THE NECESSARY FUELS, LUBRICANTS,
OPERATING SUPPLIES AND THIRD PARTY INTERCONNECTIONS ARE CONTINUOUSLY AVAILABLE;
(2) THE BUYER’S TRAINED OPERATORS ARE AVAILABLE FOR OPERATION OF THE UNIT;
(3) THE BUYER WILL OPERATE PORTIONS OR ALL OF THE PLANT AT THE TIMES AND AT THE
LOADS REASONABLY REQUESTED BY THE SELLER; PROVIDED, HOWEVER, THAT BUYER’S
OPERATION OF A UNIT SHALL BE SUBJECT TO AND COORDINATED WITH THE REQUIREMENTS OF
SYSTEM DISPATCH AND COES; (4) THE SELLER WILL HAVE UNIMPAIRED ACCESS TO ALL
PLANT WORK AREAS, STATION CRANES AND SIMILAR EQUIPMENT; AND; (5) A COPY OF THE
CONTROL ROOM LOG IS AVAILABLE TO THE SELLER; PROVIDED, HOWEVER, THAT SELLER’S
ACCESS TO A UNIT AS PROVIDED IN THIS CONTRACT SHALL BE UPON FIVE (5) DAYS PRIOR
NOTICE TO BUYER AND SHALL BE SCHEDULED SO AS TO MINIMIZE INTERFERENCE WITH
BUYER’S OPERATION AND MAINTENANCE OF THE OTHER UNITS AND OTHER PLANT WORK AREAS.

 

(OOO.)                “WARRANTY PERIOD” SHALL HAVE THE MEANING ASCRIBED IN
ARTICLE 14.1 OF THIS CONTRACT.

 

(PPP.)                “WORK” SHALL MEAN THE PROCUREMENT, FABRICATION, AND SUPPLY
OF THE EQUIPMENT AND THE PERFORMANCE OF THE SERVICES, AND ANY CORRECTIVE ACTIONS
UNDERTAKEN PURSUANT TO THE WARRANTY IN ARTICLE 14.

 

1.2                               Rules of Interpretation

 

The following to rules of interpretation shall apply in construction of this
Contract.  Unless otherwise required by the context in which any term appears:

 

(A.)                               CAPITALIZED TERMS USED IN THIS CONTRACT HAVE
THE MEANINGS SPECIFIED IN THIS ARTICLE, OR AS OTHERWISE DEFINED IN THIS
CONTRACT;

 

(B.)                              THE SINGULAR SHALL INCLUDE THE PLURAL;

 

(C.)                               THE WORDS “HEREIN,” “HEREOF” AND “HEREUNDER”
SHALL REFER TO THIS CONTRACT AS A WHOLE AND NOT TO ANY PARTICULAR ARTICLE OR
SUB-ARTICLE OF THIS CONTRACT;

 

(D.)                              REFERENCES TO THIS CONTRACT SHALL INCLUDE A
REFERENCE TO ALL APPENDICES, ATTACHMENTS, ANNEXES, SCHEDULES AND EXHIBITS
HERETO, AS THE SAME MAY BE AMENDED, MODIFIED, SUPPLEMENTED OR REPLACED FROM TIME
TO TIME;

 

(E.)                               THE WORDS “INCLUDE,” “INCLUDES” AND
“INCLUDING” ARE NOT LIMITING;

 

7

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(F.)                                 ANY CONSENT TO BE GIVEN BY EITHER PARTY
HERETO HEREUNDER SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED,
EXCEPT AS EXPLICITLY STATED TO THE CONTRARY HEREIN; AND

 

(G.)                              REFERENCES TO ANY AGREEMENT, DOCUMENT OR
INSTRUMENT SHALL MEAN A REFERENCE TO SUCH AGREEMENT, DOCUMENT OR INSTRUMENT AS
THE SAME MAY BE AMENDED, MODIFIED, SUPPLEMENTED OR REPLACED FROM TIME TO TIME.

 

ARTICLE 2                                               SCOPE OF SUPPLY

 

GEPPI shall manufacture and deliver the Equipment and GEII shall perform the
associated Services, all as more fully described in Attachment 1, Equipment
Scope of Supply, and Attachment 7, Services and Special Conditions For On-Site
Services (Technical Advisory Services Only) subject to the terms and conditions
as set forth in this Contract. The Equipment includes three Unit(s).

 

ARTICLE 3                                               PRICE

 

The Buyer shall pay to the Seller the following “Contract Price” in
consideration of the Equipment and Services (except Technical Advisory Services
which shall be priced according to Attachment 7):

 

“Contract Price”(Total in U.S. Dollars) = $51,465,000
Pricing Breakdown:

 

GENERAL ELECTRIC PACKAGED POWER INC.

 

Unit

 

Equipment

 

Subtotal (U.S. Dollars)

 

“Unit Price(s)” (U.S. Dollars)

 

1

 

Gas Turbine Generator Set

 

$

17,155,000

 

Unit 1 = $17,155,000

 

2

 

Gas Turbine Generator Set

 

$

17,155,000

 

Unit 2 = $17,155,000

 

3

 

Gas Turbine Generator Set

 

$

17,155,000

 

Unit 3 = $17,155,000

 

 

 

 

 

Total Contract Price:

 

$

51,465,000

 

 

General Electric International, Inc. Sucursal de Peru

 

Services

 

Subtotal (U.S. Dollars)

 

“Price(s)” (U.S. Dollars)

 

Technical Advisory Services

 

Field service rate sheet in effect at time of service

 

Field service rate sheet in effect at time of service

 

 

The Contract Price is stated exclusive of sales, VAT or other applicable taxes,
which will be added at the time of invoicing.  The Contract Price per Unit
includes a price of $15,000 USD for all software licenses.  The Contract Price
shall be adjusted as necessary to take account of:

 

8

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(A.)                               CHANGE ORDERS, INCLUDING THOSE RELATED TO THE
EXERCISE OF OPTIONS (AS DEFINED IN ARTICLE 4 BELOW); OR

 

(B.)                              OTHER ADJUSTMENTS SPECIFICALLY PROVIDED FOR IN
THIS CONTRACT.

 

Payment shall be made in accordance with the Payment Schedule set forth in
Article 6.1 and in accordance with the payment terms and conditions set forth in
Article 6 of this Contract.

 

ARTICLE 4                                               OPTIONS

 

The Buyer shall have the right to exercise options to purchase the additional
Equipment or Services which have been previously and specifically quoted to
Buyer and which are described in the Schedule of Options attached to this
Contract as Attachment 2 (the “Options”) within the times and at the prices
therein stated.  If any Option is exercised in writing prior to the option
exercise deadline(s) set forth in Attachment 2, the Contract Price will be
automatically adjusted as set forth in the Schedule of Options and the
associated Payment Schedule and Delivery Schedule shall be set forth in a
mutually executed Change Order.

 

ARTICLE 5                                               PRICE ADJUSTMENT - NOT
USED

 

ARTICLE 6                                               PAYMENTS

 

6.1                               Payment Schedule

 

Payments shall be made as set forth in the Payment Schedule.  For those payments
tied to calendar months, payments, after the Down Payment, shall be due and
payable on the fifteenth Day of the calendar month as indicated in the Payment
Schedule, remitted via wire transfer.  Seller will provide invoices to Buyer
thirty (30) Days in advance of the payment due date.  If the fifteenth Day of
the month falls on a weekend or holiday, the payment shall be due on the next
business Day after the fifteenth. Wire transfer instructions shall be provided
on each invoice.  Late payments shall be subject to an interest charge equal to
two percent (2%) in excess of the prime rate as published in the Wall Street
Journal, at that time, compounded on an monthly basis.

 

The GEII’s fees for Technical Support Services may be invoiced monthly for the
Services performed in the prior month and payment shall be due and payable net
thirty (30) days from the date of Seller’s invoice.

 

For those RTS milestones, invoices shall be issued on completion of the
milestone and payment shall be due and payable net five (5) Days from the date
of the Seller’s invoice.  Subject to the Payment Schedule in Attachment 9, an
initial payment (the “Down Payment”) is to be paid the next business Day
following the Effective Date.  It is understood and agreed if the Seller
completes the Readiness to Ship milestone for the first Unit in advance of what
is indicated on the Payment Schedule, in no event shall the Buyer be required to
make payment for such milestone prior to the milestone date identified on the
Payment Schedule included in Attachment 9.  It is also understood and agreed
that if Seller completes to Readiness to Ship milestone for the second or third
Units in advance of what is indicated on the Payment Schedule, in no event shall
the Buyer be required to make payment for such milestone prior to thirty (30)
Days from the milestone date identified on the Payment Schedule included in
Attachment 9.

 

9

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6.2                               Payment Security

 

Buyer shall provide Seller with payment security in the form of a Comfort Letter
from one or more of the Lenders substantially consistent with the form and
substance included in Attachment 10.  This Comfort Letter shall be provided on
or before December 15, 2008.

 

Should Buyer fail to timely make progress payments due prior to December 15,
2008, or fail to provide the Comfort Letter by December 15, 2008, Buyer shall
provide a BPZ Resources, Inc. Guaranty on or before December 18, 2008, provided
that the financial test below has been met:

 

(A.)                               EBITDAX AS MEASURED FROM THE THREE (3) MONTH
PERIOD ENDING OCTOBER 31ST, 2008 IS EQUAL TO OR GREATER THAN 2.25 TIMES THE SUM
OF THE PAYMENTS DUE FOR THE PERIOD BETWEEN JANUARY AND MARCH OF 2009.  FOR THE
PURPOSE OF THIS CALCULATION, EXPLORATORY EXPENSES SHALL NOT EXCEED $5,000,000
USD.

 

In the event that the Buyer fails to provide the Comfort Letter by December 15,
2008 and is unable to provide the BPZ Resources, Inc. Guaranty by December 18,
2008 because the above financial test has not been met, then Buyer shall provide
Seller with a Standby Letter of Credit in accordance with the below provisions:

 

(B.)                              A STANDBY LETTER OF CREDIT ISSUED OR CONFIRMED
BY A UNITED STATES OR WESTERN EUROPEAN BANK REASONABLY ACCEPTABLE TO SELLER,
GENERALLY IN ACCORDANCE WITH THE SELLER’S FORM ATTACHED AS ATTACHMENT 15, WHICH
STANDBY LETTER OF CREDIT SHALL BE ESTABLISHED BY THE BUYER AND SHALL BECOME
OPERATIVE WITHIN (30) THIRTY DAYS AFTER SELLER HAS REQUESTED BUYER TO PROVIDE
THE STANDBY LETTER OF CREDIT PURSUANT TO THE ABOVE. THE STANDBY LETTER OF CREDIT
ESTABLISHED BY THE BUYER SHALL PROVIDE FOR SELLER’S ABILITY TO MAKE PARTIAL
DRAWINGS PRO RATA ON PARTIAL DELIVERIES.  BUYER WILL INCREASE THE
AMOUNT(S) AND/OR EXTEND THE VALIDITY PERIOD(S) AND/OR POST AN ADDITIONAL STANDBY
LETTER OF CREDIT WITHIN THIRTY (30) DAYS OF SELLER’S PROVISION TO BUYER OF
DOCUMENTATION SHOWING THAT SUCH IS NECESSARY TO SECURE PAYMENTS TO BECOME DUE.
IN THE EVENT OF ANY REFINANCING OR ADDITIONAL FINANCINGS PROVIDING FUNDING FOR
THE PROJECT, BUYER MAY REPLACE THE CURRENT STANDBY LETTER OF CREDIT WITH A
REPLACEMENT STANDBY LETTER OF CREDIT AND SELLER SHALL COOPERATE WITH BUYER IN
SUCH EVENT BY PROMPTLY TAKING ALL ACTIONS ON ITS PART NECESSARY FOR THE
CANCELLATION OF THE CURRENT STANDBY LETTER OF CREDIT.  IF BUYER IS INITIALLY
PREVENTED FROM PROVIDING THE BPZ RESOURCES, INC. GUARANTY BECAUSE THE FINANCIAL
TEST HAS NOT BEEN MET, AND IS REQUIRED TO PROVIDE THE STANDBY LETTER OF CREDIT,
THEN SHOULD BUYER’S EBITDAX AS MEASURED FOR ANY SUBSEQUENT THREE (3) MONTH
PERIOD EQUAL OR EXCEED 2.25 TIMES THE SUM OF THE PAYMENTS DUE FOR THE NEXT THREE
(3) MONTH PERIOD, BUYER SHALL BE ENTITLED TO CANCEL THE STANDBY LETTER OF CREDIT
AND PROVIDE THE BPZ RESOURCES, INC. GUARANTY IN LIEU THEREOF.  THE STANDBY
LETTER OF CREDIT SHALL NOT BE CANCELLED UNTIL SUCH TIME THAT THE BPZ
RESOURCES, INC. GUARANTY HAS BEEN PROVIDED.

 

At such time that Buyer provides a Comfort Letter to Seller, it shall have no
further obligations to provide or maintain either the BPZ Resources, Inc.
Guaranty or the Standby Letter of Credit.

 

10

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6.3                               Effect of Changes in Contract Price

 

If any adjustment results in an increase to the Contract Price, Buyer shall pay
for the increase in accordance with the corresponding invoice submitted by
Seller.  If any adjustment results in a decrease in the Contract Price, payments
previously made shall be retained by the Seller and will be applied to
subsequent payments as they become due.

 

6.4                               Field Modifications and Offsets

 

Seller shall not be responsible for back charges or field modifications
performed by Buyer unless Seller authorizes such charges in writing prior to the
incurrence thereof and Buyer specifically waives any right of set-off relating
to such charges.  Any claim or set-off for back charges shall be accompanied by
a copy of such written authorization.  In no event shall Buyer offset any
amounts due under this Contract by amounts that may be due Buyer from Seller or
any of its Affiliates under any other agreement, judgment or order.  Buyer may
elect to offset amounts due under this Contract, pursuant to Section 9.3,
against future progress payments under the Payment Schedule.

 

ARTICLE 7                                               BUYER’S OBLIGATIONS

 

7.1                               Permits

 

The Buyer shall be responsible for timely obtaining all environmental and use
permits, all other licenses (including but not limited to export licenses,
import licenses), exemptions, permits, authorizations, approvals, local building
and construction permits, and easements necessary for the construction and
operation of the Facility, and shall be responsible for any additional costs,
fees or fines arising from any delay or failure to obtain such permits,
licenses, exemptions, authorizations or approvals, even though any such permits,
licenses, exemptions, authorizations or approvals may be applied for by Seller. 
Buyer shall reasonably support Seller in it’s efforts to obtain any foreign
exchange permits and work permits related to Services.

 

7.2                               Permitting Support

 

The Seller shall provide reasonable assistance to the Buyer in its endeavors
relating to the permitting of the Site and reasonably cooperate by providing
information and support during any hearings in the process of obtaining the
permits.  In undertaking such assistance, the Seller shall not be obligated to
incur out-of-pocket costs and expenses without reimbursement from the Buyer. 
Seller shall not be liable if any permits, licenses, exemptions, authorizations
or approvals are delayed, denied, revoked, restricted or not renewed and Buyer
shall not be relieved thereby of its obligations under this Contract, including
paying Seller for the Equipment.

 

ARTICLE 8                                               TITLE TRANSFER,
DELIVERY, RISK OF LOSS, SHIPMENT TO STORAGE

 

8.1                               Title

 

Title to each portion of the Equipment, Services or any spare parts under this
Contract shall transfer from the Seller to the Buyer as follows:

 

11

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(A.)                               TITLE TO EQUIPMENT SHALL PASS FROM THE SELLER
TO THE BUYER IMMEDIATELY AT SELLER’S DELIVERY (PURSUANT TO SECTION 8.2) OF THE
EQUIPMENT EX WORKS SELLER’S HOUSTON MANUFACTURING FACILITY (INCOTERMS 2000).

 

(B.)                              TITLE TO SERVICES SHALL PASS TO THE BUYER AS
PERFORMED.

 

(C.)                               TITLE TO OPERATIONAL SPARE PARTS TO BE
EXPORTED FROM THE UNITED STATES OF AMERICA SHALL PASS FROM THE SELLER TO THE
BUYER UPON THE EARLIER OF THE SELLER HAVING RECEIVED PAYMENT OR IMMEDIATELY
AFTER EACH ITEM DEPARTS FROM THE TERRITORIAL LAND, SEAS AND OVERLYING AIRSPACE
OF THE UNITED STATES.

 

For the purposes of this Article, the territorial seas of the United States
shall be deemed to extend to twelve (12) nautical miles from the baseline of the
country determined in accordance with the 1982 United Nations Convention of the
Law of the Sea.

 

Upon receipt of Buyer’s final payment for each Unit, Seller shall deliver a
final  (one-time) lien waiver for each Unit in the form of Attachment 3 to this
Contract within three (3) Days of its receipt of such payment.

 

8.2                               Delivery

 

The Seller shall make the Equipment available for Buyer’s pick up and shipment
Ex Works Seller’s Houston Manufacturing Facility (Incoterms 2000) (“Delivery”)
upon issuance of Notice of Readiness to Ship.  The Seller shall make Delivery of
each Unit by the date set forth in the Scheduled Delivery Date(s) as set forth
in Attachment 4.

 

8.3                               Risk of Loss

 

With respect to each item of Equipment, risk of loss shall pass to the Buyer
upon the earlier of:

 

(A.)                               DELIVERY; OR

 

(B.)                              SHIPMENT TO STORAGE IF PERMITTED UNDER THE
TERMS OF THIS CONTRACT.

 

8.4                               Delivery to Storage

 

If any part of the Equipment cannot be delivered to the Buyer when ready due to
any cause solely attributable to the Buyer or due to a Force Majeure Event
pursuant to Article 18.1, the Seller may ship such Equipment to storage in
Houston, Texas, such storage being in accordance with the original equipment
manufacturers’ recommendations, and any technical specifications or other
instructions provided by the Seller.  If such Equipment is placed in storage,
including storage at the facility where manufactured, the following conditions
shall apply:

 

(A.)                               TITLE AND RISK OF LOSS SHALL THEREUPON PASS
TO THE BUYER IF IT HAD NOT ALREADY PASSED;

 

(B.)                              ANY AMOUNTS OTHERWISE PAYABLE TO THE SELLER
UPON DELIVERY OR SHIPMENT SHALL BE PAYABLE UPON PRESENTATION OF THE SELLER’S
INVOICE(S);

 

12

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(C.)                               ALL EXPENSES INCURRED BY THE SELLER, SUCH AS
FOR PREPARATION FOR AND PLACEMENT INTO STORAGE, HANDLING, INSPECTION,
PRESERVATION, STORAGE, REMOVAL CHARGES AND ANY TAXES SHALL BE PAYABLE BY THE
BUYER UPON SUBMISSION OF THE SELLER’S INVOICE(S); AND

 

(D.)                              WHEN CONDITIONS PERMIT AND UPON PAYMENT OF ALL
AMOUNTS DUE HEREUNDER, THE SELLER SHALL RESUME DELIVERY OF THE EQUIPMENT.

 

Notwithstanding anything to the contrary contained herein, storage and shipment
to storage is the sole and direct responsibility of the Buyer and the Seller
shall not assume any liability associated therewith, except if Seller delivers
such Equipment to storage which is unsuitable for providing the storage
conditions specified in the first sentence of this Section 8.4, and Buyer shall
indemnify, defend and hold Seller harmless for any damages, costs, expenses and
fees, including reasonable attorneys’ fees associated therewith.  Any Seller
invoicing or collection related to shipment is only a service provided to the
Buyer and represents no direct or indirect responsibility associated with
storage.

 

ARTICLE 9                                               SCHEDULE AND LIQUIDATED
DAMAGES FOR DELAY

 

9.1                               Drawing Liquidated Damages

 

The Seller shall submit the drawings and design information listed in Attachment
8 for Buyer review and information.  Those drawings identified, as “LD Drawings”
in Attachment 8 shall be subject to late delivery liquidated damages, not as a
penalty, a sum of $500 per drawing per Day. The Seller’s aggregate liability
hereunder for drawing submittal delay liquidated damages shall not exceed
$250,000.  The liquidated damages for delay in submitting the drawings shall be
the Buyer’s exclusive remedy for and the Seller’s sole obligation arising out of
delayed drawing submittals.

 

9.2                               Scheduled Delivery Date

 

The Seller shall provide the Notice of Readiness to Ship for each Unit by the
date(s) set forth in the Scheduled Delivery Date(s) schedule attached to this
Contract as Attachment 4.

 

9.3                               Scheduled Liquidated Damages

 

If any of the Units are not delivered on or before their respective Scheduled
Delivery Date(s), for reasons not excused elsewhere in this Contract, the Seller
shall pay Buyer as liquidated damages, and not as a penalty, a sum calculated in
accordance with the table below, until actual Delivery of that Unit:

 

Days

 

Liquidated Damages

1+

 

$7,000 per full Day per Unit

 

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9.4                               Limitations

 

The Seller’s aggregate liability per Unit hereunder for liquidated damages for
delay in Delivery of Units shall not exceed ten percent (10%) of the Contract
Price.  The liquidated damages for delay in Delivery of Units shall be the
Buyer’s exclusive remedy for and the Seller’s sole obligations arising out of
delay.

 

Notwithstanding the foregoing, such liquidated damages shall not be deemed to
relieve Seller of its obligations under Article 14 or under Article 10 with
respect to defective Equipment or Services and Buyer shall be entitled to pursue
all remedies available to it under these provisions.

 

ARTICLE 10                                        PERFORMANCE GUARANTEES

 

When tested in accordance with Attachment 5, Test Procedures and Protocol, and
subject to the conditions specified in Attachment 6 and Attachment 7, the Seller
guarantees that the Equipment will achieve the output, heat rate, emissions
levels, and near field noise levels, set forth in the Stamped Guarantee Sheet
attached hereto as Attachment 6 (the “Performance Guarantees”).  If the
performance of any Unit achieves the Minimum Performance Guarantees, but fails
to achieve the output or heat rate Performance Guarantees after the final
performance test provided for in Article 11 below, the Seller shall pay to the
Buyer as liquidated damages, and not as a penalty, a sum calculated in
accordance with the table below for each Unit that fails to achieve the output
or heat rate Performance Guarantees:

 

Criterion

 

Liquidated Damages

 

 

 

Output

 

$785 for each kW below the applicable Performance Guarantee

 

 

 

Heat Rate

 

$ 13,550 for each btu/kWh (LHV) above the applicable Performance Guarantee

 

 

 

Guaranteed Emissions

 

Liquidated damages not applicable. In lieu of any damages, Seller has a duty to
adjust and repair the Unit until the Performance Guarantee for emissions is met
during a one-time test. (a Must Meet Remedy).

 

 

 

Near Field Noise Emissions

 

Liquidated damages not applicable. In lieu of any damages, Seller has a duty to
adjust and repair the Unit until the Performance Guarantee for near field noise
emissions is met during a one-time test. (a Must Meet Remedy).

 

The Seller’s aggregate liability per Unit hereunder for liquidated damages for
failure to achieve the output Performance Guarantee shall not exceed ten percent
(10%) of the Unit Price of the Unit(s) giving rise to such claim. The Seller’s
aggregate liability per Unit hereunder for liquidated damages for failure to
achieve the heat rate Performance Guarantee shall not exceed ten percent (10%)
of the Unit Price of the Unit(s) giving rise to such claim. The liquidated
damages for failure to achieve the Performance Guarantees and the corrective
action to be taken by the Seller for deficiencies in performance shall be the
Buyer’s exclusive remedies for and the Seller’s sole obligations arising out of
such deficiencies.

 

In addition to the Performance Guarantees for output and heat rate, when tested
in accordance with Attachment 5 and subject to the conditions set forth in
Attachment 6 and Attachment 7, the

 

14

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Seller guarantees that each Unit will meet the Minimum Performance Guarantees. 
If when first so tested, a Unit fails to meet the Minimum Performance
Guarantees, the Seller shall have a continuing obligation to adjust and repair
the Unit(s) until the Minimum Performance Guarantees are met (“Must Meet
Remedy”); provided, however, that Buyer may give notice under Section 25.1(d).

 

Notwithstanding the foregoing, such liquidated damages shall not be deemed to
relieve Seller of its obligations under Article 14 with respect to defective
Equipment or Services and Buyer shall be entitled to pursue all remedies
available to it under this Article.

 

All Performance Guarantees must be met simultaneously.

 

ARTICLE 11                                        PERFORMANCE GUARANTEE TESTING

 

11.1                        Performance Tests

 

The performance tests shall be arranged and conducted by the Buyer or its
designee unless specifically stated below.

 

11.2                        Performance Testing

 

The tests for output and heat rate shall be performed separately for each Unit
using the testing procedures and protocol set forth in Attachment 5 and subject
to conditions set forth in Attachment 6 and Attachment 7, and shall be conducted
immediately following the start-up period after the Seller has conducted final
check-out of the Unit.  If the output and heat rate tests are not conducted
within the first 200 fired hours, degradation shall be applied in accordance
with clause 11.7 below.

 

11.3                        Emissions Testing

 

If required, Buyer or its designee shall conduct the emissions tests at the
engine exhaust.  Buyer shall provide Seller a copy of the initial compliance
test report, as submitted to the relevant air quality management agency.

 

11.4                        Noise Testing

 

Buyer or its designee shall conduct the noise tests of the Equipment.  Buyer
will provide Seller with a copy of the test procedure prior to the test being
conducted.  Buyer shall afford the Seller with the opportunity to witness noise
testing and will provide written notice within fifteen (15) Days of the date the
test will be conducted.  A copy of the final test report shall be provided to
the Seller upon test completion.

 

11.5                        Cure Period

 

If when first tested, a Unit meets the Minimum Performance Guarantee, but does
not meet the heat rate or output Performance Guarantee, the Seller shall
diligently undertake corrective actions to achieve the relevant Performance
Guarantee.  Seller should be afforded sixty (60) Unimpeded Access Days to the
Unit(s) to undertake corrective action.  Seller should be afforded

 

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a day for day extension for each Day that Unimpeded Access is not provided by
Buyer.  The Seller and Buyer will cooperate during this cure period to provide
Unimpeded Access to the Unit(s).  In the event that there is an extended period
during which the Seller is not provided Unimpeded Access and Seller’s personnel
demobilize from site, Buyer shall provide Seller with at least ten (10) Days
notice when such access is expected to resume.  Subject to the requirements of
system dispatch, the COES, and Buyer’s other contractual obligations, the
Unit(s) will be re-tested when the Seller so requests, but in any event at the
end of this cure period.

 

11.6                        Cost of Tests and Re-Tests

 

The Buyer shall perform the initial performance tests at its cost.  The Seller
shall be notified of, and shall be represented at, all such tests.  If Seller
fails to be present at such tests, it shall be deemed to have waived the
requirement that it be present.  If a re-test is required and to the extent the
Seller was the cause of such re-test, the actual cost of the retest will be
borne by the Seller.  The actual cost of the re-test shall mean:

 

(A.)                               THE COST OF SPECIAL TEST PERSONNEL OR SPECIAL
OPERATING PERSONNEL PROVIDED BY THE BUYER;

 

(B.)                              THE COST OF SPECIAL INSTRUMENTATION AND
EQUIPMENT (INCLUDING RENTAL COST) AND INCLUDING REQUIRED CALIBRATION OF THE
INSTRUMENTATION; AND

 

(C.)                               THE SELLER’S PERSONNEL COST, BUT IN NO EVENT
WHATSOEVER WILL THE SELLER BE RESPONSIBLE FOR THE COST OF FUEL OR OTHER
CONSUMABLES, NORMAL OPERATING PERSONNEL, OR ANY OTHER SUCH COST TYPICALLY BORNE
BY THE BUYER.

 

11.7                        Degradation

 

In conducting the initial performance test or re-tests, the performance of any
Unit shall not be adjusted for degradation until such Unit has operated in
excess of two hundred (200) hours.  The Seller’s degradation table, included in
Attachment 11, shall be used to determine the adjustment for Unit output and
Unit heat rate.

 

11.8                        Performance Credits  [Not Used in this Contract]

 

ARTICLE 12                                        AGGREGATE LIMITATION ON
LIQUIDATED DAMAGES

 

The Seller’s overall aggregate liability hereunder for all forms of liquidated
damages provided for in this Contract shall not exceed fifteen percent (15%) of
the Contract Price. The Parties agree that the amount of liquidated damages set
forth above are reasonable in light of the anticipated harm caused by the breach
of duty related thereto and the difficulties of proof of loss and inconvenience
or non-feasibility of obtaining any adequate remedy and the Parties are estopped
from contesting the validity or enforceability of such liquidated damages.

 

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ARTICLE 13                                        OBSERVATION, INSPECTION AND
FACTORY TEST

 

13.1                        Observation at the Site

 

Upon reasonable prior written notice, the Seller shall be afforded access during
normal business hours to observe Work in progress at the Site.  The Seller may
visit the Site at any time or times, or may maintain representatives to observe
Buyer’s or Buyer’s contractors work, provided such activity and inspections do
not unreasonably interfere with the Work.

 

13.2                        Inspections and Tests at Seller’s Facilities

 

Upon the Buyer’s request and with the Seller’s prior written consent, the
Buyer’s inspector shall be provided access to the Seller’s facilities to obtain
information on production progress and make inspections. Such access will be
limited to areas concerned with the Equipment and shall not include restricted
areas where Work of a proprietary nature is being conducted.  The Seller shall,
in its sole discretion, determine the extent of the Buyer’s access to the
Seller’s facilities and the extent of factory testing to be conducted on the
Equipment during normal business hours.  The Seller shall not be required to
delay manufacturing or other activities to accommodate Buyer’s inspection.

 

13.3                        Inspections and Tests at Suppliers’ Facilities

 

Subject to the conditions set forth in the foregoing paragraph, the Seller will
make reasonable efforts to obtain for the Buyer access to its Suppliers’
facilities for the purposes described in the paragraph above.

 

13.4                        Advance Notice of Intended Readiness To Ship and
Inspection

 

With the respect to each Unit, Seller shall provide Buyer with a written notice
of Seller’s intent to issue the Notice of Readiness to Ship (“Advance Notice of
Intended Readiness to Ship”) for Buyer’s inspection.  Such notification shall be
provided to Buyer in writing no later than fifteen (15) Days prior to the date
on which Seller intends to issue the Notice of Readiness to Ship for any Unit.
Buyer may elect to inspect or not inspect the Unit prior to issuance of Notice
of Readiness to Ship.  The Buyer’s waiver of its right to inspect or failure to
inspect when given the reasonable opportunity shall not limit Seller’s ability
to issue the Notice of Readiness to Ship. Absent Buyer’s written agreement,
Seller shall not issue the Notice of Readiness to Ship prior to fifteen (15)
Days after the issuance of the Advance Notice of Intended Readiness to Ship.

 

If during Buyer’s inspection it is determined that Seller has not made the
Equipment available in accordance with Seller’s packing procedures and quality
assurance processes, Buyer has the right to request that Seller remedy the
situation prior to Seller issuing Notice of Readiness to Ship.  Any such
non-conformity shall be resolved expeditiously by the Parties to their mutual
satisfaction.

 

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13.5                        Inspection Not Acceptance

 

The Buyer’s inspection of the Equipment or its failure to inspect does not
relieve the Seller of its obligation to fulfill the requirements of this
Contract, nor is it to be construed as acceptance by the Buyer.

 

ARTICLE 14                                        WARRANTY

 

14.1                        Warranty Period

 

The Seller shall warrant the Equipment and the associated Services on the terms
set forth in this Article below for (i) twelve (12) months following the date
each Unit meets the Performance Guarantees (for the avoidance of doubt, provided
that the Seller has met the Minimum Performance Guarantees and the Performance
Guarantees for Emissions and Noise, and has made required payments of Liquidated
Damages for such Unit, the starting date shall be the conclusion of the cure
period as provided in Section 11.5), (ii) 8,000 fired hours for each Unit, or
(iii) thirty (30) months following the date of Seller’s Notice of Readiness to
Ship for each Unit whichever period is first to occur (the “Warranty Period”);
provided, however, that the warranty applicable to the Training Services shall
be solely as set forth in Attachment 7.

 

14.2                        Warranty

 

The Seller warrants to the Buyer that during the Warranty Period:

 

(A.)                               THE EQUIPMENT TO BE DELIVERED HEREUNDER:

 

(I)                                     SHALL BE DESIGNED AND FIT FOR THE
PURPOSE OF GENERATING ELECTRIC POWER WHEN OPERATED IN ACCORDANCE WITH THE
SELLER’S SPECIFIC WRITTEN OPERATION INSTRUCTIONS AND, IN THE ABSENCE THEREOF, IN
ACCORDANCE WITH GENERALLY ACCEPTED OPERATION PRACTICES OF THE ELECTRIC POWER
PRODUCING INDUSTRY,

 

(II)                                  SHALL BE FREE FROM DEFECTS IN MATERIAL,
WORKMANSHIP AND TITLE,

 

(III)                               SHALL BE NEW AND UNUSED, AND

 

(IV)                              SHALL COMPLY WITH ALL MATERIAL APPLICABLE
LAWS; AND

 

(B.)                              THE SERVICES SHALL BE PERFORMED IN A
COMPETENT, DILIGENT MANNER IN ACCORDANCE WITH ALL APPLICABLE LAWS.

 

14.3                        Remedy

 

If the Equipment delivered or Services performed hereunder do not meet the above
warranties during the Warranty Period set forth in this Article, the Buyer shall
promptly notify the Seller in writing and in the case of the Equipment make the
Equipment available promptly for correction.  The Seller shall thereafter, as
soon as is practicable, correct any warranty defect, at its expense:

 

(A.)                               BY REPERFORMING THE DEFECTIVE SERVICES;

 

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(B.)                              REPAIRING (TO THE EXTENT CONSISTENT WITH GOOD
INDUSTRY PRACTICES) THE DEFECTIVE PART OF THE EQUIPMENT EITHER ON SITE, OR IF
OFF-SITE RETURNED BY SELLER, AT SELLER’S EXPENSE, TO THE PERUVIAN PORT OF ENTRY
DDU (INCOTERMS 2000); OR

 

(C.)                               BY MAKING AVAILABLE NECESSARY REPLACEMENT
PARTS AVAILABLE AT THE PERUVIAN PORT OF ENTRY DDU (INCOTERMS 2000).

 

Buyer shall, at Seller’s option, return any defective part that is replaced by
Seller at Seller’s expense to Seller’s Houston facility within sixty (60) Days
from the date of written instruction by Seller.  The Seller shall provide
technical advisory Services reasonably necessary for any such repair of the
Equipment, but the Seller shall not be responsible for (i) removal or
replacement of structures or other parts of the Facility and (ii) site labor or
transportation of parts or components from Peruvian port of entry DDU (Incoterms
2000).  The Buyer shall be responsible for the installation of any repaired or
replacement part and for payment of any customs duties or similar levies, which
may be assessed as a result of the shipment of any such replacement parts. 
Notwithstanding the foregoing, in no event shall the Buyer’s provision of labor
or such labor’s performance of any installation of replacement parts negate any
warranties or guarantees provided by Seller under this Contract.

 

If a defect in the Equipment or part thereof cannot be corrected by the Seller’s
reasonable efforts, the Parties will negotiate an equitable adjustment in price
with respect to such Equipment or part thereof or in the event of a failure by
Seller under this Section 14.3, Seller shall be obligated to pay Buyer’s actual
documented costs of any repair or remedial work required hereunder.

 

14.4                        Warranty on Remedial Work

 

Any re-performed service or repaired or replacement part furnished under this
warranty shall carry warranties on the same terms as set forth above, except
that the applicable warranty period for the repair/replacement part or
re-performed Service shall be for the longer of:

 

(A.)                               THE REMAINDER OF THE ORIGINAL WARRANTY
PERIOD; OR

 

(B.)                              TWELVE (12) MONTHS FROM THE DATE OF SUCH
RE-PERFORMANCE, REPAIR OR REPLACEMENT.

 

In any event the repair/replacement warranty period and the Seller’s
responsibilities set forth herein for such repaired or replacement part shall
end no later than twelve (12) months after expiration of the original Warranty
Period.

 

Seller shall provide at no cost FMEA (Failure Modes Effect Analysis) analysis of
root cause for systemic repeated failures.

 

14.5                        Exclusions

 

The Seller does not warrant the Equipment or any repaired or replacement parts
against normal wear and tear, including that due to environment or operation,
including, type of fuel, detrimental air inlet conditions or erosion, corrosion
or material deposits from fluids.  The warranties and remedies set forth herein
are further conditioned upon:

 

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(A.)                               THE PROPER STORAGE, INSTALLATION, OPERATION,
AND MAINTENANCE OF THE EQUIPMENT AND CONFORMANCE WITH THE OPERATION INSTRUCTION
MANUALS (INCLUDING REVISIONS THERETO) PROVIDED BY THE SELLER AND/OR ITS
SUBCONTRACTORS OR SUPPLIERS, AS APPLICABLE (INCLUDING ANY REQUIRED WARRANTY
PRESERVATION SERVICES IN THE EVENT OF LONG TERM STORAGE); AND

 

(B.)                              REPAIR OR MODIFICATION PURSUANT TO THE
SELLER’S INSTRUCTIONS OR APPROVAL.

 

Buyer shall keep proper records of operation and maintenance during the Warranty
Period. These records shall be kept in the form of log sheets and copies shall
be submitted to the Seller upon its reasonable request.

 

14.6                        Exclusive Remedies and Warranties

 

EXCEPT FOR LIQUIDATED DAMAGES FOR OUTPUT AND HEAT RATE AND MUST MEET REMEDIES,
THE PRECEDING PARAGRAPHS OF THIS ARTICLE SET FORTH THE SOLE AND EXCLUSIVE
REMEDIES FOR ALL CLAIMS DURING THE WARRANTY PERIOD BASED ON FAILURE OF OR DEFECT
IN THE EQUIPMENT AND SERVICES PROVIDED UNDER THIS CONTRACT, WHETHER THE FAILURE
OR DEFECT ARISES BEFORE OR DURING THE WARRANTY PERIOD AND WHETHER A CLAIM,
HOWEVER INSTITUTED, IS BASED ON CONTRACT, INDEMNITY, WARRANTY, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.  THE FOREGOING WARRANTIES ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES AND GUARANTEES WHETHER
WRITTEN, ORAL, IMPLIED OR STATUTORY.  NO IMPLIED STATUTORY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE SHALL APPLY.

 

ARTICLE 15                                        TAXES

 

15.1                        Seller Taxes

 

Unless otherwise specified in this Contract, the Seller shall be responsible
for, and shall pay directly, Seller Taxes.  If Buyer deducts or withholds Seller
Taxes, the Buyer shall furnish within one month to the Seller accurate official
receipts from the appropriate governmental authority for each deducted or
withheld Seller Taxes.

 

15.2                        Buyer Taxes

 

The Buyer shall be responsible for, and shall pay directly when due and payable,
any and all Buyer Taxes, and all payments due and payable by the Buyer to the
Seller hereunder shall be made in the full amount of the Contract Price, free
and clear of all deductions and withholding, for Buyer Taxes.  If the Buyer
deducts or withholds Buyer Taxes, the Buyer shall pay additional amounts to the
Seller to cause the amounts actually received by the Seller, net of deducted or
withheld Buyer Taxes, to equal the full amount of the Contract Price, and shall
provide to the Seller within one month, along with such payments, accurate
official receipts from the appropriate governmental authority for deducted or
withheld Buyer Taxes.  If the Seller is required to pay Buyer Taxes, the Buyer
shall, promptly upon presentation of the Seller’s invoice for such Buyer Taxes,
pay to the Seller in the Contract Currency an amount equal to the U.S.

 

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dollar equivalent of such Buyer Taxes (calculated at the exchange rate in effect
at the time payment of such Buyer Taxes was made).

 

15.3                        Invoices

 

The Seller shall issue an official value-added, sales (or similar) tax invoice
in addition to the price, in accordance with applicable Laws.

 

15.4                        Duty Drawback

 

All rights to drawback of customs duties paid by the Seller to the customs
authorities of the country of manufacture of any Equipment belong to and shall
remain with Seller.  Buyer agrees to cooperate with Seller and to furnish such
documents to Seller as may be necessary to obtain drawback.

 

ARTICLE 16                                        COMPLIANCE WITH LAWS, CODES
AND STANDARDS

 

The Contract Price is based on the engineering and manufacture of the Equipment
in accordance with the Seller’s design criteria, manufacturing processes and
procedures and quality assurance programs, so as to comply with:

 

(A.)                               THOSE PORTIONS OF THE CODES AND STANDARDS
IDENTIFIED IN ATTACHMENT 1 WHICH THE SELLER HAS DEEMED APPLICABLE TO THE
EQUIPMENT (“CODES AND STANDARDS”);

 

(B.)                              THE APPLICABLE NATIONAL LAWS OF THE COUNTRY
WHERE THE RELEVANT EQUIPMENT IS MANUFACTURED (“NATIONAL LAWS”);

 

(C.)                               THE SITE CONDITIONS (INCLUDING TEMPERATURE,
HUMIDITY, ELEVATION AND ANY SEISMIC OR WIND-LOADING REQUIREMENTS) IDENTIFIED BY
BUYER PRIOR TO EFFECTIVE DATE AND SET FORTH IN ATTACHMENT 1 (“SITE CONDITIONS”);
AND

 

(D.)                              THOSE LOCAL LAWS WHICH HAVE BEEN IDENTIFIED IN
ATTACHMENT 1.  IF NO LOCAL LAWS ARE SET FORTH IN ATTACHMENT 1 AND AGREED TO BY
SELLER, THE MANUFACTURING PROCESS SHALL NOT INCORPORATE ANY CONSIDERATION OF
LOCAL LAWS.

 

ARTICLE 17                                        PROJECT MANAGEMENT

 

17.1                        Original Equipment Definition

 

The original Equipment definition is established in Attachment 1, Scope of
Supply.

 

17.2                        Order Definition Meeting

 

Unless otherwise agreed, the Seller will schedule an Order Definition Meeting
within thirty (30) Days of execution of this Contract.   The Seller will advise
the Buyer of the final drawing delivery schedule at the conclusion of the Order
Definition Meeting.

 

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17.3                        Project Manager

 

No later than the date of the Order Definition Meeting, each Party will appoint
an individual person as its Project Manager and will authorize that person to
act on its behalf and will identify that person to the other Party.  Each Party
hereby represents to the other that the person so identified will be authorized
to act on behalf of that Party in matters connected with this Contract or the
Project.

 

17.4                        Automatic Release

 

If the Buyer fails to provide any information required by this Article within
the times herein specified, or if the Parties are not able to reach agreement as
to the substance of a Change Order to which the Seller is entitled pursuant to
this Article by the conclusion of the Order Definition Meeting, the Seller will
deliver the Equipment as originally described in Attachment 1.

 

17.5                        Global Sourcing

 

The Seller reserves the right in its discretion to obtain, source, subcontract,
manufacture, fabricate and assemble the Equipment and any of its components and
systems outside the United States or from non-domestic concerns, or both; it
being understood that the quality standards and warranties of the Seller under
this Contract shall be adhered to in all cases irrespective of source, and that
such actions by Seller shall not result in any increase in the Contract Price or
Buyer’s Taxes.  Seller shall be responsible for those direct costs associated
with its global sourcing and manufacturing activities that occur prior to title
transfer to Buyer.

 

17.6                        Electronic Communication

 

The Parties agree to use the Seller’s Customer Collaboration System as the
primary medium for the storage and transmittal of drawings, specifications and
project reports.  The current Customer Collaboration System is Project Net.

 

ARTICLE 18                                        CHANGES

 

18.1                        Changes Resulting from Changes in Codes and Changes
in Law

 

If any change after the Effective Date to the Codes and Standards or any Change
in Law requires a change to the Equipment, the Seller shall be entitled to a
Change Order that includes equitable adjustments to the Contract Price and to
Scheduled Delivery Date(s) and other provisions of this Contract that are
impacted.  If the Seller is entitled to a Change Order pursuant to the
provisions of this paragraph, the Seller shall submit to the Buyer a draft
Change Order.

 

18.2                        Changes and Improvements Beyond Scope

 

Seller has the right to make changes in product design and add improvements to
products or services at any time without incurring any obligations to install
the same on or in connection with the Equipment and Services provided
hereunder.  In addition, during the manufacturing process at its discretion,
Seller may make minor changes to the Equipment without entering into a Change
Order, provided that such minor changes do not alter Seller’s obligations
pursuant to

 

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this Contract, the Contract Price or Scheduled Delivery Date(s) or adversely
affect Seller’s Performance Guarantees.

 

18.3                        Buyer-Initiated Changes

 

The Buyer shall have the right to request that the Seller make changes to the
Equipment or the Services, including modifications, alterations or additions. 
If the Buyer wishes to request such a change, the Buyer shall notify the Seller
in writing.  Within fifteen (15) Days after receipt of such notice (unless
otherwise extended by mutual agreement), the Seller shall submit to the Buyer a
draft Change Order, unless the matter requires further investigation and
research in which case Seller will provide an estimate of the time frame in
which Seller will be able to submit a draft Change Order to Buyer.  Within
fifteen (15) Days after receipt of the draft Change Order, Buyer shall, at its
option, advise the Seller that it no longer wishes to proceed with the Buyer
initiated Change Order, request additional time to consider the draft Change
Order, approve the Change Order, or propose revisions to the draft Change Order,
or propose revisions to the draft Change Order.  If the Buyer proposes revisions
to the draft Change Order, Seller shall issue a new draft Change Order to Buyer
within fifteen (15) Days of its receipt of Buyer’s proposed revisions.  Buyer
shall approve or disapprove of the new draft Change Order within ten (10) days
of its receipt thereof.  To the extent that there is any remaining dispute
concerning this Change Order it shall be referred to senior management in
accordance to Section 32.1.    If and when Buyer finally approves the Change
Order, the Buyer and the Seller shall then sign the Change Order that shall
operate as an amendment to this Contract.

 

18.4                        Seller-Initiated Changes

 

If the Seller wishes to propose a change, or if the Seller is entitled to a
Change Order pursuant to the provisions of this Contract, the Seller shall
submit to the Buyer a draft Change Order.

 

18.5                        Contents of Draft Change Order

 

The draft Change Order shall include:

 

(A.)                               A TECHNICAL DESCRIPTION OF THE PROPOSED
CHANGE IN SUCH DETAIL AS THE BUYER MAY REASONABLY REQUIRE;

 

(B.)                              A LUMP SUM FIRM PRICE ADJUSTMENT (INCREASE OR
DECREASE) IN THE CONTRACT PRICE, IF ANY, CAUSED BY THE PROPOSED CHANGE;

 

(C.)                               ALL POTENTIAL EFFECT(S), IF ANY, ON THE
SCHEDULED DELIVERY DATE(S), OR ANY OTHER SCHEDULE OR DATE FOR PERFORMANCE BY THE
SELLER HEREUNDER CAUSED BY THE PROPOSED CHANGE; AND

 

(D.)                              ALL POTENTIAL EFFECT(S), IF ANY, ON THE
SELLER’S ABILITY TO COMPLY WITH ANY OF ITS OBLIGATIONS HEREUNDER, INCLUDING THE
SELLER’S WARRANTIES AND PERFORMANCE GUARANTEES CAUSED BY THE PROPOSED CHANGE.

 

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18.6        Process for Concluding Change Order

 

The Buyer shall, within fifteen (15) Days from the date of receipt of such
information, either approve or disapprove the draft Change Order in writing,
request additional time to consider the draft Change Order, or propose revisions
to the draft Change Order.  If the Buyer proposes revisions to the draft Change
Order, Seller shall issue a new draft Change Order to Buyer within fifteen 15
Days of its receipt of Buyer’s proposed revisions.  Buyer shall approve or
disapprove of the new draft Change Order within ten (10) days of its receipt
thereof.  To the extent that there is any remaining dispute concerning this
Change Order it shall be referred to senior management in accordance to
Section 32.1.  If and when the Buyer finally approves the Change Order, the
Buyer and the Seller shall then sign the Change Order that shall operate as an
amendment to this Contract.

 

18.7        Agreement Required

 

Subject to Section 18.3 above, all changes under this Contract shall be subject
to mutual agreement, and no Change Order will be effective until signed by both
Parties.

 

ARTICLE 19             FORCE MAJEURE EVENT

 

19.1        Force Majeure Event

 

(A.)          A “FORCE MAJEURE EVENT” SHALL MEAN ANY ACT, EVENT OR CIRCUMSTANCE
OR ANY COMBINATION OF ACTS, EVENTS OR CIRCUMSTANCES WHICH:

 

(I)            IS BEYOND THE REASONABLE CONTROL OF THE AFFECTED PARTY (AND IN
THE CASE OF BUYER, ITS EPC CONTRACTOR, AND IN THE CASE OF SELLER, ITS
SUBCONTRACTORS AND SUPPLIERS);

 

(II)           IS WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE AFFECTED PARTY
(AND IN THE CASE OF BUYER, ITS EPC CONTRACTOR, AND IN THE CASE OF SELLER, ITS
SUBCONTRACTORS AND SUPPLIERS);

 

(III)          COULD NOT HAVE BEEN AVOIDED OR OVERCOME BY THE AFFECTED PARTY
(AND IN THE CASE OF BUYER, ITS EPC CONTRACTOR, AND IN THE CASE OF SELLER, ITS
SUBCONTRACTOR AND SUPPLIERS) ACTING IN A REASONABLE AND PRUDENT MANNER; AND

 

(IV)          PREVENTS, HINDERS OR DELAYS THE AFFECTED PARTY IN ITS PERFORMANCE
OF ALL (OR PART) OF ITS OBLIGATIONS UNDER THIS CONTRACT.

 

(B.)          WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, A FORCE MAJEURE
EVENT MAY INCLUDE ANY OF THE FOLLOWING ACTS, EVENTS OR CIRCUMSTANCES, OR
COMBINATION THEREOF, BUT ONLY TO THE EXTENT THAT IT SATISFIES THE REQUIREMENTS
SET OUR IN SECTION 19.1(A)(I) TO (IV):

 

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(I)            AN ACT OF GOD, INCLUDING DROUGHT, FIRE, EARTHQUAKE, VOLCANIC
ERUPTION, LANDSLIDE, FLOOD, STORM, HURRICANE, LIGHTING STRIKE, CYCLONE, TORNADO,
TYPHOON OR OTHER NATURAL DISASTERS;

 

(II)           EPIDEMIC OR PLAGUE;

 

(III)          FIRE, EXPLOSION OR RADIOACTIVE OR CHEMICAL CONTAMINATION;

 

(IV)          AIR CRASH, SHIPWRECK OR TRAIN CRASH;

 

(V)           ANY ACT, EVENT OR CIRCUMSTANCE OF A NATURE ANALOGOUS TO ANY OF THE
FOREGOING;

 

(VI)          WAR, HOSTILITIES, BELLIGERENCE, BLOCKADE, ACTS OF TERRORISM,
SABOTAGE, CIVIL COMMOTION, CIVIL DISTURBANCES, RIOT, REVOLUTION, OR
INSURRECTION; AND

 

(VII)         BOYCOTTS, STRIKES, LOCKOUTS AND OTHER LABOR DISTURBANCES.

 

(C.)          NOTWITHSTANDING SECTION 19.1(B), THE FOLLOWING SHALL NOT
CONSTITUTE FORCE MAJEURE EVENTS EXCEPT AND TO THE EXTENT THAT THEY RESULT
DIRECTLY FROM A FORCE MAJEURE EVENT:

 

(I)            LATE DELIVERY OR INTERRUPTION IN THE DELIVERY OF MACHINERY,
EQUIPMENT, MATERIALS AND SPARE PARTS;

 

(II)           ANY DELAY IN THE PERFORMANCE BY SELLER CAUSED BY SELLER’S OR ANY
SUPPLIER’S OR SUBCONTRACTOR’S FAILURE TO ENGAGE APPROPRIATELY QUALIFIED
SUPPLIER’S OR SUBCONTRACTORS OR PERSONNEL OR AN ADEQUATE NUMBER OF PERSONNEL FOR
THE PERFORMANCE OF THE RELEVANT TASKS; AND

 

(III)          ANY INABILITY OR FAILURE TO PAY MONEY, ANY INABILITY TO RAISE
FINANCE OR ANY CHANGES IN PRICE OR MARKET CONDITIONS.

 

(D.)          THE BURDEN OF PROOF AS TO WHETHER A FORCE MAJEURE EVENT HAS
OCCURRED SHALL BE UPON THE PARTY CLAIMING A FORCE MAJEURE EVENT.

 

(E.)          IF EITHER PARTY IS RENDERED WHOLLY OR PARTIALLY UNABLE TO PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT BECAUSE OF A FORCE MAJEURE EVENT, THAT
PARTY (THE “AFFECTED PARTY”) WILL BE EXCUSED FROM WHATEVER PERFORMANCE IS
AFFECTED BY THE FORCE MAJEURE EVENT TO THE EXTENT SO AFFECTED; PROVIDED THAT:

 

(I)            THE AFFECTED PARTY GIVES THE OTHER PARTY NOTICE WITHIN FIVE
(5) DAYS FROM THE TIME OF THE OCCURRENCE DESCRIBING THE PARTICULARS OF THE
OCCURRENCE, INCLUDING AN ESTIMATION OF ITS EXPECTED DURATION AND PROBABLE IMPACT
ON THE PERFORMANCE OF SUCH PARTY’S OBLIGATIONS HEREUNDER, AND CONTINUES TO
FURNISH TIMELY REGULAR REPORTS WITH RESPECT THERETO DURING THE CONTINUATION OF
THE FORCE MAJEURE EVENT;

 

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(II)           THE SUSPENSION OF PERFORMANCE SHALL BE OF NO GREATER SCOPE AND OF
NO LONGER DURATION THAN IS REASONABLE REQUIRED BY THE FORCE MAJEURE EVENT;

 

(III)          NO LIABILITY OF EITHER PARTY WHICH AROSE BEFORE THE OCCURRENCE OF
THE FORCE MAJEURE EVENT CAUSING THE SUSPENSION OF PERFORMANCE SHALL BE EXCUSED
AS A RESULT OF THE OCCURRENCE;

 

(IV)          THE AFFECTED PARTY SHALL EXERCISE ALL REASONABLE EFFORTS TO
MITIGATE OR CURE THE EFFECT OF THE FORCE MAJEURE EVENT;

 

(V)           THE AFFECTED PARTY SHALL CONTINUE TO PERFORM ALL OF ITS
OBLIGATIONS HEREUNDER WHICH ARE NOT IMPAIRED BY THE FORCE MAJEURE EVENT; AND

 

(VI)          WHEN THE AFFECTED PARTY IS ABLE TO RESUME PERFORMANCE OF ITS
OBLIGATIONS UNDER THIS AGREEMENT, THE AFFECTED PARTY SHALL GIVE THE OTHER PARTY
WRITTEN NOTICE TO THAT EFFECT AND SHALL PROMPTLY RESUME PERFORMANCE HEREUNDER.

 

In the event the Affected Party fails to give the other party notice in
accordance with the requirements above, the other Party may reasonably deny the
Affected Party’s entitlement to such an extension for that portion of the delay
that occurred prior to the Affected Party’s notice.

 

19.2        Termination for Extended Delay

 

If a Force Majeure Event extends for more than twelve (12) consecutive months
and the Parties have not agreed upon a revised basis for continuing the Work at
the end of the delay, including an equitable adjustment of the price, if
necessary, then either Party (except where delay is caused by the Buyer, in
which event only the Seller, and except where delay is caused by the Seller, in
which case only the Buyer), upon thirty (30) Days written notice, may terminate
this Contract with respect to the portion of Equipment to which title has not
yet passed. If the termination for extended delay is caused by a Force Majeure
Event of the Buyer, the Buyer shall promptly pay the Seller termination charges
as set forth the in Termination Schedule. If the Termination for Extended Delay
is caused by a Force Majeure Event of the Seller, the Buyer may request a refund
of payments for portion of Equipment to which title has not yet passed and
Seller shall promptly make such refund to Buyer.

 

ARTICLE 20             PATENTS

 

20.1        Indemnity

 

The Seller shall indemnify the Buyer against any damages, costs and expenses
(including reasonable attorneys fees) arising out of any suit, claim, or
proceeding (a “Claim”) alleging that Work infringes a patent in effect in the
U.S., Canada, an EU member state or the country of delivery (provided there is a
corresponding patent issued by the U.S. or an EU member state or the country of
delivery) if:

 

(A.)          THE BUYER PROMPTLY NOTIFIES THE SELLER IN WRITING OF THE CLAIM;

 

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(B.)          THE BUYER MAKES NO ADMISSION OF LIABILITY AND GIVES SELLER SOLE
AUTHORITY, AT THE SELLER’S EXPENSE, TO DIRECT AND CONTROL THE DEFENSE AND ANY
SETTLEMENT AND COMPROMISE NEGOTIATIONS; AND

 

(C.)          THE BUYER PROVIDES THE SELLER WITH FULL DISCLOSURE AND ASSISTANCE
THAT MAY BE REASONABLY REQUIRED TO DEFEND ANY SUCH CLAIM.

 

20.2        Exclusions

 

The Seller shall have no obligation or liability with respect to any Claim based
upon:

 

(A.)          ANY WORK THAT HAS BEEN ALTERED BY ANY PERSON OTHER THAN SELLER,
SUPPLIERS AND SUBCONTRACTORS;

 

(B.)          THE COMBINATION OR USE OF THE WORK WITH OTHER PRODUCTS WHEN THE
COMBINATION IS THE BASIS OF ANY ALLEGEDLY INFRINGING PROCESS;

 

(C.)          FAILURE OF THE BUYER TO IMPLEMENT AT SELLER’S EXPENSE ANY UPDATE
PROVIDED BY THE SELLER THAT WOULD HAVE PREVENTED THE CLAIM;

 

(D.)          UNAUTHORIZED USE OF THE WORK, WHETHER OR NOT IN BREACH OF THE
PROVISIONS OF THIS CONTRACT; OR

 

(E.)          THE BUYER’S SPECIFICATIONS.

 

The Buyer shall defend any suit or proceeding based upon, and shall indemnify
and hold the Seller harmless against, any claim that any Work made, modified or
performed to the Buyer’s specifications infringes any patent.

 

20.3        Remedies

 

If the Work or any portion thereof becomes the subject of a claim, the Seller
may at its option, either:

 

(A.)          SETTLE OR DEFEND THE CLAIM OR ANY SUIT OR PROCEEDING AND PAY ALL
DAMAGES AND COSTS AWARDED AGAINST AND INCURRED BY THE BUYER; OR

 

(B.)          PROCURE FOR THE BUYER, AT SELLER’S EXPENSE, THE RIGHT TO CONTINUE
USING THE EQUIPMENT; OR

 

(C.)          MODIFY THE EQUIPMENT SO THAT IT BECOMES NON-INFRINGING; OR

 

(D.)          REPLACE THE EQUIPMENT WITH NON-INFRINGING EQUIPMENT.

 

If, in any suit arising from such a claim, the continued use of the Equipment
for the purpose intended is impaired or forbidden by any court of competent
jurisdiction, the Seller shall at its option take one or more of the actions
under (b.), (c.) or (d.) above.

 

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20.4        Sole Liability

 

The Seller’s entire liability for indemnification for patent, trademark,
copyright, and trade secret infringement for the Work is as described and
limited in Section 20.3.

 

ARTICLE 21             GENERAL INDEMNITY

 

21.1        General Indemnity

 

Each Party (each an “Indemnifying Party”) shall be liable to and indemnify the
other Party, its officers, employees, agents and subcontractors (each an
“Indemnified Party”) for any injuries to persons or damage to third party
property, and, at its expense, shall defend against and hold the Indemnified
Party harmless from any claims which arise out of or in consequence of the
execution of this Contract, to the extent that the same results from any act or
neglect of the Indemnifying Party or its officers, employees, agents or
subcontractors, to the extent the Indemnified Party is liable under applicable
law, and against all demands, costs, charges and expenses (including attorneys
fees) arising in connection therewith.

 

21.2        Concurrent Negligence

 

If damage or injury is caused by the joint or concurrent negligence of the
parties, their officers, employees, agents, or subcontractors, the Parties shall
bear the loss in proportion to their or their officers’, employees’, agents’ or
subcontractors’ degree of negligence.

 

21.3        Notice

 

The indemnities provided in this Article shall apply only if the Indemnified
Party provides the Indemnifying Party timely notice of any claim and provides
the Indemnifying Party all necessary information and assistance so that the
Indemnifying Party may, at its option, defend or settle the claim.

 

21.4        “Third Parties” Defined

 

“Third Parties” under this Article do not include the Parties, their affiliates,
agents, successors or assigns, or any entity with an equity or security interest
in any Party, or its assets or property.

 

ARTICLE 22             INSURANCE

 

22.1        Worker’s Compensation, General Liability and Automobile Insurance

 

During the term of this Contract, each Party shall maintain the following
insurance coverage at its own expense to protect its own interests:

 

(A.)          DURING THE TERM OF THIS CONTRACT, BOTH PARTIES SHALL MAINTAIN
INSURANCE FOR INJURIES TO WORKERS FOR WORK-RELATED INJURIES OR DISEASE OF THEIR
OWN EMPLOYEES IN SUCH FORMS AND AMOUNTS AS MAY BE REQUIRED BY LAWS THAT ARE
APPLICABLE TO EACH PARTY AND ITS EMPLOYEES;

 

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(B.)          EMPLOYER’S LIABILITY IN AN AMOUNT NOT LESS THAT U.S. DOLLARS ONE
MILLION ($1,000,000).  SUCH COVERAGE MAY BE WRITTEN AS PART OF WORKER’S
COMPENSATION OR COMMERCIAL GENERAL LIABILITY AS APPLICABLE;

 

(C.)          COMMERCIAL GENERAL LIABILITY OR PUBLIC LIABILITY INSURANCE, IN
BROAD FORM, EITHER PER OCCURRENCE OR EFFECTIVE FOR AT LEAST THREE YEARS AFTER
THE EXPIRATION OF THIS CONTRACT, THAT INCLUDES COVERAGE FOR CONTRACTUAL
LIABILITY, BODILY INJURY AND THIRD PARTY PROPERTY DAMAGE, WITH A COMBINED SINGLE
LIMIT OF NOT LESS THAN U.S. $1,000,000 PER OCCURRENCE AND U.S. $3,000,000 IN THE
AGGREGATE ANNUALLY, FOR PRIMARY AND EXCESS POLICIES COMBINED; AND

 

(D.)          AUTOMOBILE LIABILITY INSURANCE COVERING ALL OWNED, NON-OWNED, AND
HIRED AUTOMOBILES USED BY IT IN CONNECTION WITH THE WORK, IF ANY, WITH A
COMBINED SINGLE LIMIT OF NOT LESS THAN U.S. $1,000,000 PER OCCURRENCE, FOR
PRIMARY AND EXCESS POLICIES COMBINED.

 

Each of the foregoing insurance policies shall not be cancelled or materially
changed without thirty (30) Days’ advance written notice to the other Party or,
in the case of non-payment, ten (10) Days’ advance written notice.  Upon
request, each Party shall deliver to the other Party certificates of insurance
showing that the foregoing insurance is in full force and effect.

 

Notwithstanding any of the provisions of this Section 22.1, the requirement for
Buyer to maintain these policies shall begin no later than thirty (30) Days
after the Effective Date of this Contract.

 

22.2        ARBR/CAR Insurance.

 

The Buyer shall provide, to protect the interests of the Buyer and the Seller,
either Contractor’s All Risk Insurance or All Risk Builder’s Risk Insurance
(CAR/ARBR). The CAR/ARBR policy shall at a minimum meet the following
requirements:   (i) the Buyer shall provide the Seller with a copy of the policy
which includes a detailed summary of insurance at least thirty (30) Days prior
to the scheduled start of any Services;  (ii) the policy shall be in effect from
the planned start of any on-Site activity through the completion of the facility
and the end of the Seller’s obligations and be non-cancelable by the Buyer and
by the insurer;  (iii) the policy shall include as named insureds the Buyer, the
Seller,  and as additional insureds Seller, any additional parties to the
Contract and, any affiliate of any party to the Contract that is performing work
in connection with the Contract, and as additional insureds, all subcontractors
(regardless of tier) and assignees of any party to the Contract, and the policy
shall also include a waiver of subrogation in favor of all insureds;  (iv)  the
policy shall cover all risks of physical loss or damage to the facility,
including mechanical and electrical breakdown, in the course of construction,
start-up, testing and commissioning, including materials, equipment and
furnishings, up to the value of the facility at full completion, except for
customary exclusions;  (v) the CAR/ARBR policy shall be subject to review and
acceptance by the Seller;   (vi)  the policy shall include extended maintenance
coverage through the end of the Warranty Period, as required; (vii)  the minimum
design/defects coverage shall equal LEG 2 or DE 4; (viii) the insurers shall be
reasonably acceptable to the Seller, rated at least A-VII by the AM Best
Insurance Report or rated at similar levels by other internationally recognized
insurance rating

 

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experts; and (ix) the policy shall be provided by responsible insurers properly
authorized to provide insurance in the jurisdiction(s) where the work will be
performed.

 

22.3        All Risk Property Insurance

 

At the time each Unit will become operational, Buyer/Owner shall maintain “All
Risks” Property Insurance on existing property/facility/plant.   The policy
shall cover “all risks” of physical loss or damage including coverage for boiler
and machinery (electrical and mechanical breakdown), in an amount equal to the
replacement value of the relevant property. Buyer/Owner and its insurers, for
these property insurances, including any business interruption, shall waive
right of subrogation against Seller its Affiliates, and its Subcontractor and
Suppliers.

 

22.4        Failure to Maintain Insurance

 

If at any time either Party fails to maintain insurance complying with the
requirements of this Article in full force and effect, the Party at fault shall
be responsible for any resulting losses or costs sustained by the other Party
and shall hold the other Party harmless from actions brought against the other
Party as the result of the absence of the at fault Party’s required insurance.

 

22.5        Buyer’s Risks

 

In no event shall the Seller be responsible for Buyer’s Risks after Delivery. 
“Buyer’s Risks” include damage and losses due to war, hostilities, terrorism,
rebellion, revolution, civil disturbance, nuclear radiation or similar
occurrences; acts or omissions of the Buyer; and natural perils (such as flood
or earthquake) or other perils to the extent that the peril is excluded from the
ARBR/CAR policy coverage or the loss is in excess of the policy limits.

 

ARTICLE 23             SUSPENSION

 

23.1        Suspension by Buyer of Work at Site

 

The Buyer shall have the right, at any time, to suspend Work at the Site upon
written notice to the Seller.  Any cost incurred by the Seller in accordance
with any such suspension (including storage costs) shall be payable by the Buyer
upon submission of the Seller’s invoice(s); provided, however, that Buyer shall
have no obligation to reimburse Seller for any such costs if Seller’s failure to
perform its obligations pursuant to this Contract was the cause of Buyer’s
suspension of the Work.  Performance of the Seller’s obligations shall be
extended for a period of time reasonably necessary to overcome the effects of
such suspension except if such suspension was the result of Seller’s failure to
perform any of its obligations hereunder.

 

23.2        Suspension by Buyer of Manufacturing

 

It is expressly agreed that the Buyer shall have no right to suspend Seller’s
manufacture of the Equipment, provided, however Buyer shall maintain the right
to terminate this Contract for convenience pursuant to Article 24 or for
Seller’s default pursuant to Section 25.1.

 

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23.3        Suspension by Seller

 

Subject to the provisions of the Direct Agreement, the Seller shall have the
right to suspend all Work, including the delivery of any Equipment, immediately
upon the failure of the Buyer to make any payment when due.  The Seller shall
further have the right to suspend any shipment of the Equipment if all payments
due prior to the applicable Scheduled Delivery Date have not been made.  Any
cost incurred by the Seller in accordance with any such suspension (including
storage costs) shall be payable by the Buyer upon submission of the Seller’s
invoice(s).  Performance of the Seller’s obligations shall be extended for a
period of time reasonably necessary to overcome the effects of such suspension.

 

ARTICLE 24             TERMINATION BY BUYER FOR CONVENIENCE

 

The Buyer shall have the right to terminate this Contract for its convenience
with respect to any or all Units until title to such Units has passed to the
Buyer or such Units have been delivered to the Buyer in accordance with
Article 8.2, whichever shall first occur.  Such termination shall be effective
upon the later of receipt by the Seller of written notice of termination or
receipt by the Seller of termination charges in accordance with the Termination
Schedule in Attachment 12.

 

If this Contract is partially or completely terminated for the convenience of
the Buyer pursuant to this Article 24, the Seller shall retain title to each
terminated Unit.  Title to each item of Equipment comprising the non-terminated
Units shall pass to the Buyer upon the later of:

 

(A.)          PAYMENT TO THE SELLER OF 100% OF THE UNIT PRICE OF EACH
NON-TERMINATED UNIT IN ACCORDANCE WITH ATTACHMENT 9 AND OF THE TERMINATION
CHARGES FOR THE TERMINATED UNITS(S) CALCULATED IN ACCORDANCE WITH ATTACHMENT 12;
AND

 

(B.)          WHEN TITLE TO SUCH ITEM OF EQUIPMENT WOULD OTHERWISE HAVE PASSED
PURSUANT TO THIS ARTICLE.

 

If Buyer’s payment of the termination charges occurs after Seller receives
Buyer’s termination notice, Seller shall have the right to suspend performance
upon receipt of the termination notice and await the payment of termination
charges without penalty to Seller.

 

ARTICLE 25             TERMINATION FOR CAUSE

 

25.1        Grounds for Termination by Buyer

 

The Buyer shall have the right to terminate this Contract for cause in the event
that either of the Sellers or the Guarantor:

 

(A.)          BECOMES INSOLVENT, MAKES AN ASSIGNMENT FOR THE BENEFIT OF ITS
CREDITORS, HAS A RECEIVER OR TRUSTEE APPOINTED FOR THE BENEFIT OF ITS CREDITORS,
OR FILES FOR PROTECTION FROM CREDITORS UNDER ANY BANKRUPTCY OR INSOLVENCY LAWS;

 

(B.)          BREACHES OR FAILS TO COMPLY OR PERFORM ANY OF ITS MATERIAL
OBLIGATIONS HEREUNDER (BUT SOLELY WITH RESPECT TO A MATERIAL OBLIGATION FOR
WHICH THIS CONTRACT DOES NOT PROVIDE EXCLUSIVE REMEDIES), PROVIDED:

 

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(I)            THAT THE BUYER SHALL FIRST HAVE PROVIDED THE SELLER WITH WRITTEN
NOTICE OF THE NATURE OF SUCH BREACH OR FAILURE AND OF THE BUYER’S INTENTION TO
TERMINATE THIS CONTRACT AS A RESULT OF SUCH BREACH OR FAILURE; AND

 

(II)           THAT THE SELLER SHALL HAVE FAILED WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF SUCH NOTICE TO CORRECT SUCH BREACH OR FAILURE; PROVIDED, HOWEVER, IF
SUCH BREACH CANNOT BE CURED WITHIN SUCH THIRTY (30) DAY PERIOD, DESPITE SELLER’S
DILIGENCE AND GOOD FAITH EFFORTS TO DO SO, THEN SELLER SHALL BE AFFORDED AN
ADDITIONAL PERIOD OF NOT MORE THAN SIXTY (60) DAYS TO CURE SUCH BREACH;

 

(C.)          BREACHES OR FAILS TO PERFORM IN ACCORDANCE WITH THE GUARANTEE; OR

 

(D.)          (I) WITH RESPECT TO A MATERIAL OBLIGATION FOR WHICH THIS CONTRACT
PROVIDES AN EXCLUSIVE MONETARY REMEDY, FAILS TO MAKE PAYMENT TIMELY; (II) WITH
RESPECT TO A MATERIAL OBLIGATION FOR WHICH THIS CONTRACT PROVIDES A MUST MEET
REMEDY, FAILS TO COMPLETE SUCH REMEDY WITHIN NINETY (90) DAYS OF NOTICE OF SUCH
FAILURE FROM BUYER; OR (III) WITH RESPECT TO SELLER’S FAILURE TO DELIVER ANY
UNIT BY THE SCHEDULED DELIVERY DATE, AND NOTWITHSTANDING ANY PAYMENT BY SELLER
OF LIQUIDATED DAMAGES, FAILS TO DELIVER SUCH UNIT WITHIN ONE-HUNDRED (100) DAYS
AFTER SUCH SCHEDULED DELIVERY DATE.

 

Notwithstanding any other provision in this Section 25.1, Seller shall have no
cure period for those requirements in Article 36(a) except as set forth therein.

 

25.2        Remedy in the Event of Termination by Buyer

 

If the Buyer terminates this Contract as provided above, the Buyer shall only be
obligated to pay the Seller for that portion of the Contract Price allocable to
the Equipment for which title has transferred to Buyer or for Services performed
by Seller prior to the termination (the “Terminated Work”).  If the payments
received by the Seller as of the date of such termination are in excess of such
portion of the Contract Price, the Seller shall promptly return the excess of
such payments to the Buyer.  The Seller shall also pay to Buyer an amount equal
to the difference between that portion of the Contract Price allocable to the
terminated Work and such actual and reasonable amount paid or to be paid by the
Buyer to another vendor for equipment and services comparable to that which
Seller was obligated to deliver or provide as well as Buyer’s actual documented
direct damages associated with the EPC Contractor.  Nothing in this Section 25.2
is inconsistent with Section 26.2.

 

25.3        Grounds for Termination by Seller

 

Subject to the terms of the Direct Agreement, the Seller shall have the right to
terminate this Contract for cause in the event that the Buyer:

 

(A.)          BECOMES INSOLVENT, MAKES AN ASSIGNMENT FOR THE BENEFIT OF ITS
CREDITORS, HAS A RECEIVER OR TRUSTEE APPOINTED FOR THE BENEFIT OF ITS CREDITORS,
OR FILES FOR PROTECTION FROM CREDITORS UNDER ANY BANKRUPTCY OR INSOLVENCY LAWS;
OR

 

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(B.)          SUBSTANTIALLY BREACHES OR FAILS TO COMPLY OR PERFORM ITS MATERIAL
OBLIGATIONS HEREUNDER, INCLUDING A BREACH OR FAILURE TO COMPLY WITH ARTICLE 31
OF THIS CONTRACT, OR FAILS TO MAKE ANY PAYMENT WHEN DUE, INCLUDING ANY PAYMENT
SECURITY, AS SET FORTH IN THIS CONTRACT,  PROVIDED:

 

(I)            THAT THE SELLER SHALL FIRST HAVE PROVIDED THE BUYER WITH WRITTEN
NOTICE OF THE NATURE OF SUCH FAILURE AND OF THE SELLER’S INTENTION TO TERMINATE
THIS CONTRACT AS A RESULT OF SUCH FAILURE, AND

 

(II)           THAT THE BUYER SHALL HAVE FAILED WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF SUCH NOTICE TO CORRECT SUCH BREACH OR FAILURE; PROVIDED, HOWEVER, IF
SUCH BREACH CANNOT BE CURED WITHIN SUCH THIRTY (30) DAY PERIOD, DESPITE BUYER’S
DILIGENCE AND GOOD FAITH EFFORTS TO DO SO, THEN BUYER SHALL BE AFFORDED AN
ADDITIONAL PERIOD OF NOT MORE THAN SIXTY (60) DAYS TO CURE SUCH BREACH.

 

In the event that Buyer suspends work at Site pursuant to the Article 23 of this
Contract for a continuous period of twelve (12) months other than as a result of
a Force Majeure Event, then Seller shall have the right to terminate it’s
obligations with respect to the provision of Services and post Delivery
obligations.

 

Notwithstanding any other provision in this Section 25.3, Buyer shall have no
cure period with respect to the timely provision of the Comfort Letter, the BPZ
Resources, Inc. Guaranty, or the Standby Letter of Credit as required by
Section 6.2, except as set forth therein.

 

25.4        Remedy in the Event of Termination by Seller

 

If the Seller terminates this Contract as provided above, the Buyer shall pay to
the Seller the charges set forth in the Termination Schedule.  Termination
charges paid in accordance to this provision shall not be deemed a consequential
damage pursuant to Article 26.2.

 

ARTICLE 26             LIMITATION OF LIABILITY

 

26.1        Limitation

 

The total liability of the Seller for all claims arising out of or relating to
the performance or breach of this Contract or use of any Equipment shall not
exceed an amount equal to 100% of the Contract; provided, however, that the
Parties agree that this limitation shall exclude any loss, liability or damage
arising from or due to, gross negligence, or willful misconduct of Seller or any
of its Subcontractors or Suppliers, Seller’s obligation to achieve the Minimum
Performance Guarantees and the Performance Guarantees for noise and emissions,
and liabilities for which Seller has provided any indemnity to Buyer under this
Contract.

 

26.2        Consequential Damages

 

Neither party shall be liable for loss of profit or revenues, loss of product,
loss of use of the Work or any associated equipment, interruption of business,
cost of capital, cost of replacement equipment, downtime costs, increased
operating costs, claims of the Buyer’s customers for such damages, or for any
special, consequential, incidental, indirect, punitive or exemplary damages.

 

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26.3                        Sale, Transfer, Assignment to Third Party

 

If the Buyer is supplying, transferring or assigning the Work to a third party,
the Buyer shall require the third party to agree to be bound by this Article. 
If the Buyer does not obtain this agreement for the Seller’s benefit, or if the
agreement is found void or unenforceable, the Buyer shall indemnify, defend and
hold the Seller harmless from and against any and all liability arising out of
claims made by the third party in excess of the limitations and exclusions of
this Article.

 

26.4                        Gratuitous Advice

 

The Seller shall not be liable for any advice or assistance that is not provided
within the scope of the Work or otherwise under this Contract.

 

26.5                        Limitations to Prevail

 

The limitations and exclusions in this Article shall apply regardless whether a
claim is based in contract (including warranty), tort (including negligence or
strict liability), statute, equity or any other extra-contractual theory.  The
Parties agree that the amount of liquidated damages set forth in this Contract
are reasonable in light of the anticipated harm caused by the breach of duty
related thereto and the difficulties of proof of loss and inconvenience or
non-feasibility of obtaining any adequate remedy and the Parties are stopped
from contesting the validity or enforceability of such liquidated damages.

 

26.6                        Limitation of Remedies; Overriding Effect

 

The Buyer’s and the Seller’s rights, obligations and remedies arising out of or
relating to the Work are limited to those rights, obligations and remedies
described in this Contract.  This Article shall prevail over any conflicting or
inconsistent terms in this Contract, unless those terms further restrict the
Seller’s liability.

 

26.7                        Obligation to Mitigate

 

Each Party shall exercise reasonable efforts to mitigate or limit its losses or
damage in the event of a breach or default by the other Party under or in
connection with this Contract.

 

ARTICLE 27                                        PROPRIETARY INFORMATION

 

27.1                        Information Subject to Restriction

 

In connection with this Contract, the Seller and the Buyer (as to information
disclosed, the “Disclosing Party”) may each provide the other party (as to
information received, the “Receiving Party”) with “Confidential Information.” 
“Confidential Information” means:

 

(A.)                               ALL PRICING FOR THE WORK;

 

(B.)                              ALL TERMS OF THIS CONTRACT;

 

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(C.)                               ALL INFORMATION THAT IS DESIGNATED IN WRITING
AS “CONFIDENTIAL” OR “PROPRIETARY” BY THE DISCLOSING PARTY AT THE TIME OF
WRITTEN DISCLOSURE; AND

 

(D.)                              ALL INFORMATION THAT IS ORALLY DESIGNATED AS
“CONFIDENTIAL” OR “PROPRIETARY” BY THE DISCLOSING PARTY AT THE TIME OF ORAL
DISCLOSURE AND IS CONFIRMED TO BE “CONFIDENTIAL” OR “PROPRIETARY” IN WRITING
WITHIN TEN (10) DAYS AFTER ORAL DISCLOSURE.

 

The obligations of this Article shall not apply as to any portion of the
Confidential Information that:

 

(A.)                               IS OR BECOMES GENERALLY AVAILABLE TO THE
PUBLIC OTHER THAN FROM DISCLOSURE BY THE RECEIVING PARTY, ITS REPRESENTATIVES OR
ITS AFFILIATES;

 

(B.)                              IS OR BECOMES AVAILABLE TO THE RECEIVING PARTY
OR ITS REPRESENTATIVES OR AFFILIATES ON A NON-CONFIDENTIAL BASIS FROM A SOURCE
OTHER THAN THE DISCLOSING PARTY WHEN THE SOURCE IS NOT, TO THE BEST OF THE
RECEIVING PARTY’S KNOWLEDGE, SUBJECT TO A CONFIDENTIALITY OBLIGATION TO THE
DISCLOSING PARTY;

 

(C.)                               IS INDEPENDENTLY DEVELOPED BY THE RECEIVING
PARTY, ITS REPRESENTATIVES OR AFFILIATES, WITHOUT REFERENCE TO CONFIDENTIAL
INFORMATION;

 

(D.)                              IS REQUIRED TO BE DISCLOSED BY LAW, A VALID
LEGAL PROCESS OR A GOVERNMENT AGENCY; OR

 

(E.)                               IS APPROVED FOR DISCLOSURE IN WRITING BY AN
AUTHORIZED REPRESENTATIVE OF THE DISCLOSING PARTY.

 

27.2                        Obligations of Receiving Party

 

The Receiving Party agrees:

 

(A.)                               TO USE THE CONFIDENTIAL INFORMATION ONLY IN
CONNECTION WITH THIS CONTRACT AND PERMITTED USE(S) AND MAINTENANCE OF THE WORK,
AND IN THE CASE OF BUYER, IN CONNECTION WITH THE OWNERSHIP, DEVELOPMENT,
FINANCING, CONSTRUCTION, OPERATION, MAINTENANCE, EXPANSION, REPAIR, OR
REPLACEMENT OF THE PROJECT (COLLECTIVELY, THE “PERMITTED USES”); PROVIDED
HOWEVER, THAT THIS DOES NOT GIVE BUYER THE RIGHT TO INFRINGE ANY OF SELLER’S
PATENTS FOR THE PURPOSE OF REPAIR AND REPLACEMENT;

 

(B.)                              TO TAKE REASONABLE MEASURES TO PREVENT
DISCLOSURE OF THE CONFIDENTIAL INFORMATION, EXCEPT TO ITS EMPLOYEES, AGENTS,
CONSULTANTS, CONTRACTORS, ATTORNEYS OR THE LENDERS (AND THEIR CONSULTANTS AND
ATTORNEYS) IN CONNECTION WITH THE PERMITTED USES; AND

 

(C.)                               NOT TO DISCLOSE THE CONFIDENTIAL INFORMATION
TO A COMPETITOR TO THE DISCLOSING PARTY, AND IN THE CASE OF THE SELLER A
COMPETITOR IS DEFINED AS THOSE COMPANIES WHO MANUFACTURE OR SELL, DIRECTLY OR
INDIRECTLY, NEW POWER GENERATION EQUIPMENT.

 

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The Receiving Party shall obtain a written commitment from any recipient of
Confidential Information (other than a Party’s or Lender’s attorneys) not to
disclose any Confidential Information except as permitted herein.  The Receiving
Party shall destroy or return all copies of Confidential Information to the
Disclosing Party upon request, except to the extent that this Contract entitles
the Receiving Party or envisions a need for Receiving Party or any other
recipient to retain the Confidential Information.  The Seller may also retain
one copy of the Buyer’s Confidential Information until all Seller’s potential
liability under this Contract terminates.  The obligations under this Article 27
shall expire on the latest of three (3) years from the date of disclosure of the
Confidential Information, or termination of this Contract or such longer period
as Seller or Buyer is required by Law to hold any documents relating to the
Project.  This Article supersedes any previously executed confidentiality
agreement, if any,  executed in relation to the subject matter of this
Contract.  The restrictions contained in this Section 27.2 do not apply to any
disclosure by Buyer to the Lenders (and their consultants and attorneys) which
disclosure may be made upon notice and requirement of confidentiality.

 

27.3                        Disclosure Pursuant to Legal Process

 

If either Party or any of its affiliates or representatives is required by law,
legal process or a government agency to disclose any Confidential Information,
that Party agrees to provide the Disclosing Party with prompt written notice to
permit the Disclosing Party to seek an appropriate protective order or agency
decision or to waive compliance by the Receiving Party with the provisions of
this Article.  If efforts to secure confidential treatment are unsuccessful, the
Disclosing Party may, if permitted by law, revise the Confidential Information
to make it nonproprietary or to minimize the loss of its proprietary value. 
Notwithstanding the foregoing, to the extent required by the federal securities
laws, a Party or any of its Affiliates or representatives may make any required
disclosure of Confidential Information and shall provide notice of such
disclosure to the Disclosing Party.

 

27.4                        Intellectual Property

 

Nothing in this Article grants the Receiving Party any license under any
invention, patent, trademark or copyright now or later owned or controlled by
the Disclosing Party.

 

27.5                        Disclosure by Buyer

 

The Buyer shall not disclose Confidential Information to the Seller unless it is
required to do so to enable the Seller to perform Work under this Contract.  If
the Buyer does disclose Confidential Information, the Buyer warrants that it has
the right to disclose the information, and the Buyer shall indemnify and hold
the Seller harmless against any claims or damages resulting from the Buyer’s
improper disclosure.

 

ARTICLE 28                                        SOFTWARE LICENSE

 

28.1                        Grant of License

 

Only to the extent necessary to use the Equipment supplied by the Seller, for
the purposes for which such Equipment is supplied, the Seller grants to the
Buyer a non-exclusive right to use software, firmware, programs and any other
technology necessary to operate and use the

 

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Equipment delivered to the Buyer by Seller. This right shall be non-assignable
(except as for any collateral assignment to Lenders or their agent for which no
consent by Seller shall be required) and non-transferrable by the Buyer (except
for sub-licenses to any subsequent purchaser of the Equipment) and shall apply
and be irrevocable with respect to each unit of Equipment purchased under this
Contract and paid for in full by the Buyer.

 

28.2                        Third-Party Software

 

Certain software the Seller provides to the Buyer may contain third-party
software, including but not limited to “open source” software, which may be
provided with a separate end-user agreement. Use of such third-party software
and its source code shall be governed by this Contract and such end-user license
agreements. To the extent there is any conflict between the terms of this
Contract and the applicable end-user license agreement, the end-user license
agreement shall prevail.  If requested by the Seller at any time, the Buyer
shall execute a copy of the applicable end-user license agreement.

 

28.3                        Limitations

 

Unless otherwise agreed to by the Seller, the Buyer has only the right to
install and use a single copy of the software for each unit of associated
Equipment.  The Buyer may make one copy of the software for backup purposes
only, in machine-readable form.  The Buyer has no right to (i) disassemble,
decompile, reverse engineer, or otherwise attempt to reconstruct or discover the
source code of the software or third-party software; (ii) remove any product
identification, copyright, trademark, or other notice from the software;
(iii) modify, adapt or translate the software.

 

ARTICLE 29                                        PERSONAL DATA PROTECTION

 

“Personal Data” is any information relating to an identified or identifiable
natural person (“Data Subject”).  The Buyer and the Seller each agree that any
Personal Data obtained from the other party will be deemed “Confidential
Information” of the other party as defined in this Contract whether or not the
Personal Data is publicly available.  The Buyer and the Seller shall provide
security for the Personal Data they receive from each other and limit its
disclosure and use.   The Buyer and the Seller each represent that in providing
Personal Data to one another they will comply with all applicable laws and
regulations, including but not limited to providing notices to or obtaining
consents from the Data Subjects when required.

 

ARTICLE 30                                        EXPORT CONTROL

 

30.1                        Export Controls

 

The Buyer hereby agrees that it shall not, except as said laws and regulations
may expressly permit, make any disposition by way of transshipment, re-export,
diversion or otherwise, of U.S. origin goods and technical data (including
computer software), or the direct product thereof, supplied by the Seller
hereunder.  The obligations of the Parties to comply with all applicable export
control laws and regulations shall survive any termination, or discharge of any
other contract obligations.

 

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30.2                        Buyer to Keep Informed

 

The Buyer undertakes to keep itself fully informed of, and to comply with, the
export control laws and regulations of the United States of America and any
amendments thereof.

 

30.3                        Weapons

 

The Buyer hereby certifies that the Work, technical data, software or other
information or assistance furnished by the Seller or its Affiliates under this
Contract will not be used in the design, development, production, stockpiling or
use of chemical, biological, or nuclear weapons either by the Buyer or by any
entity acting on the Buyer’s behalf.

 

ARTICLE 31                                        ASSIGNMENT AND CHANGE IN
CONTROL

 

31.1                        Consent Required

 

It is expressly understood and agreed that this Agreement is personal to Seller
and Buyer, and that Seller and Buyer shall have no right, power or authority to
assign this Contract or any portion thereof, either voluntarily or
involuntarily, or by operation of law.  Any purported assignment not in
accordance with this Article shall be void and without effect.  Notwithstanding
the foregoing, it is agreed by the Parties that Buyer may, (without Seller’s
consent):

 

(A.)                               ASSIGN THIS CONTRACT OR ANY OF ITS RIGHTS OR
OBLIGATIONS UNDER THIS CONTRACT TO AN AFFILIATE UPON WRITTEN NOTICE TO SELLER;

 

(B.)                              PRESENTLY OR COLLATERALLY ASSIGN THIS CONTRACT
OR ANY OR ALL OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT TO THE LENDERS;
AND/OR

 

(C.)                               ASSIGN THIS CONTRACT OR ANY OR ALL OF ITS
RIGHTS AND OBLIGATIONS UNDER THIS CONTRACT TO THE EPC CONTRACTOR, PROVIDED THAT
THE EPC CONTRACTOR OFFERS BUYER SATISFACTORY EVIDENCE OF ITS ABILITY (BOTH
FINANCIAL AND OTHERWISE) TO FULFILL THE OBLIGATIONS OF BUYER HEREUNDER; PROVIDED
THAT THE SELLER WOULD NOT BE PENALIZED OR BECOME SUBJECT TO ADDITIONAL
REQUIREMENTS UNDER ANY LAW AS A RESULT OF SUCH ASSIGNMENT.

 

Any such assignment shall not constitute a novation.

 

31.2                        Seller’s Right to Assign

 

Notwithstanding the provisions of Section 31.1, the Seller may assign this
Contract or any of its rights or obligations under this Contract to any
Affiliate upon written notice of such assignment.  In the event of such
assignment, the Seller’s assignee will be responsible for the assigned Work and
will invoice directly to and collect payments directly from the Buyer; provided,
however, such assignment shall not constitute a novation, and the guarantee
provided pursuant to Article 36(a) shall survive and remain in full force and
effect after any such assignment.

 

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31.3                        Successors and Assigns

 

All of the rights, benefits, duties, liabilities and obligations of the Parties
hereto shall inure to the benefit of and be binding upon their respective
successors and permitted assigns.

 

31.4                        Change in Control of Buyer

 

Prior to any Change in Control of Buyer, the Buyer shall notify the Seller of
such prospective Change in Control no less than thirty (30) Days prior to the
Change of Control event. If the Seller reasonably believes that a Change in
Control of Buyer may prejudice the Seller’s ability to obtain payment under this
Contract, the Buyer shall furnish, within thirty (30) Days of Seller’s written
request, such additional security as the Seller shall reasonably require;
provided, however, that Buyer shall not be obligated to furnish such additional
security if it presents to Seller, within fifteen (15) Days of delivery of the
Seller’s written request for additional security, reasonably satisfactory
evidence of Buyer’s continued financial capability to meet its payment
obligations.

 

ARTICLE 32                                        DISPUTE RESOLUTION

 

32.1                        Referral to Senior Management

 

Any and all controversies, disputes or differences between the Parties to this
Contract, if not amicably settled by the Parties with thirty (30) Days following
written notice of dispute, shall be referred to senior management of the Parties
for resolution.  In the event the dispute has not been resolved within
forty-five (45) Days following referral to senior management, or such longer
period as the Parties may mutually agree, then either Party may, upon ten
(10) Days notice to the other party, pursue their remedies at law.

 

32.2                        Venue

 

Any legal action or proceeding with respect to this Contract shall be brought in
the United States District Court for the Southern District of New York or, if
such court lacks jurisdiction, in the Supreme Court of the State of New York in
New York County.  Each of the Parties hereby accepts and consents to, generally
and unconditionally, the jurisdiction of the aforesaid courts and appellate
courts from any appeal thereof.  Each of the Parties irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Party at the address first set forth in the this
Contract.  Each of the Parties hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Contract brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

 

32.3                        Equitable Remedies

 

Nothing in this Article 32 or otherwise in this Contract shall preclude any
Party from seeking equitable relief in the United States District Court for the
Southern District of New York or, if

 

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such court lacks jurisdiction, in the Supreme Court of the State of New York in
New York County.  The Parties agree and stipulate that a Party shall be entitled
to seek equitable relief without posting of a bond or other security except that
if the posting of a bond is a prerequisite to obtaining equitable relief, then a
bond in an amount equal to U.S. $1,000 shall be sufficient.

 

ARTICLE 33                                        GOVERNING LAW

 

This Contract, including but not limited to, the validity, performance and all
matters relating to the interpretation and effect of this Contract and all
further documents executed pursuant to it, shall be construed and interpreted in
accordance with the laws of the State of New York, excluding their conflict of
law rules, provided that any provision of such law invalidating any provision of
this Contract or modifying the intent of the Parties as expressed in the terms
of this Contract shall not apply.

 

ARTICLE 34                                        DIRECT AGREEMENTS

 

If requested by any of the Lenders, direct agreements shall be entered into
between the Lender’s security trustee or agent and Seller and Lender’s security
trustee or agent and the General Electric Company, as guarantor, within thirty
(30) Days of a request by Owner to do so, on terms to be provided by the Lenders
(the “Direct Agreement”), which include terms acknowledging the Lenders’ and
agent’s or the security trustee’s security interests and step-in rights,
providing for payment of amounts payable under this Contract directly to the
agent or security trustee, and providing that Seller’s rights to suspend work or
terminate the Contract are subject to the Lenders’ and security trustee’s or
agent’s cure rights.  The Parties agree that any such Direct Agreement shall not
(i) increase Seller’s liability for liquidated damages or other damages,
(ii) remove any exclusion or limitation of Seller’s liability, (iii) modify the
Schedule Delivery Dates in such a way that the Seller will have less time to
perform its obligations under this Agreement, (iv) modify the scope of Work, or
(v) reduce the Contract Price.

 

ARTICLE 35                                        EFFECTIVE DATE

 

This Contract shall become effective when it is signed by both Parties (the
“Effective Date”), however, the Seller shall not be required to commence any
Work associated with, connected to, or arising from, directly or indirectly, the
Equipment or Services, until the Seller receives the Down Payment.  Further, if
the Down Payment is not timely received in accordance with the terms of this
Contract (the “Delayed NTP”), in addition to Seller’s right to terminate under
Article 25, the Seller shall have the right to adjust the Scheduled Delivery
Date by one (1) Day(s) for each Day after the Delayed NTP and it may result in
an equitable price adjustment.

 

ARTICLE 36                                        SELLER PERFORMANCE SECURITY

 

(A)                                  WITHIN TEN (10) DAYS OF BUYER’S PAYMENT OF
THE DOWN PAYMENT, SELLER SHALL DELIVER TO BUYER AN UNCONDITIONAL AND IRREVOCABLE
GUARANTEE IN THE FORM AND SUBSTANCE OF ATTACHMENT 14 PROVIDED BY GENERAL
ELECTRIC COMPANY, WHICH HAS A LONG-TERM BOND CREDIT RATING OF AAA FROM
STANDARD & POOR’S (“S&P”) AND AAA FROM MOODY’S INVESTORS SERVICE (“MOODY’S”). 
SUCH GUARANTEE SHALL GUARANTEE ALL OF SELLER’S OBLIGATIONS UNDER THE CONTRACT.

 

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(b)                                 At the time that Seller delivers the first
Notice of Readiness to Ship, it shall provide a performance surety bond to Buyer
in the form and substance reasonably acceptable to Buyer as additional security
for the performance of Sellers’ obligations related to performance testing and
those to be performed during the Warranty Period.  Such performance surety bond
shall be issued by an insurer A.M. Best rated B++ at a minimum and shall be in
the amount of five percent (5%) of the Contract Price.  The performance surety
bond shall remain in place until the later of the Warranty Period or all
warranty claims have been finally resolved.

 

ARTICLE 37                                        ENTIRE AGREEMENT

 

This Contract represents the entire agreement between the Parties and supersedes
in its entirety all prior agreements concerning the subject matter hereof, and
no modification, amendment, revision, waiver, or other change shall be binding
on either Party unless consented to in writing by the Party’s authorized
representative.  Any oral or written representation, warranty, course of
dealing, or trade usage not contained or referenced herein shall not be binding
on either Party.  Each Party agrees that it has not relied on, or been induced
by, any representations of the other Party not contained in this Contract.

 

ARTICLE 38                                        REPRESENTATIONS

 

38.1                        Seller Representations

 

Each of the Sellers represent to Buyer that:

 

(A.)                               ORGANIZATION

 

GEPPI is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware, has the lawful power to engage in the
business it presently conducts, and is duly licensed or qualified and in good
standing in each jurisdiction wherein the nature of the business transacted by
it makes such licensing or qualification necessary.

 

GEII is a general partnership duly organized, validly existing and in good
standing under the laws of the Republic of Peru, has the lawful power to engage
in the business it presently conducts, and is duly licensed or qualified and in
good standing in each jurisdiction wherein the nature of the business transacted
by it makes such licensing or qualification necessary.

 

(B.)                              POWER AND AUTHORITY

 

Seller has the authority to execute and carry out this Contract and to perform
its obligations hereunder and all such actions have been duly authorized by all
necessary corporate action on its part.

 

(C.)                               NO CONFLICT

 

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The execution, delivery and performance of this Contract will not conflict with,
result in the breach of, constitute a default under or accelerate performance
required by any of the terms of the articles of incorporation or the code of
regulations of Seller or any material covenant, agreement, understanding,
decree, indenture, instrument or order to which Seller is a party or by which
Seller or any of its properties or assets is bound or affected.

 

(D.)                              VALIDITY AND BINDING EFFECT

 

This Contract has been duly and validly executed and delivered by Seller.  This
Contract constitutes a legal, valid and binding obligation of Seller,
enforceable in accordance with its terms, except to the extent that its
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar law affecting the rights of creditors generally or
by general principles of equity.

 

38.2                        Buyer Representations

 

Buyer represents to Seller that:

 

(A.)                               ORGANIZATION

 

Buyer is a partnership duly formed, validly existing and in good standing under
the laws of the Republic of Peru, has the lawful power to engage in the business
it presently conducts and contemplates conducting, and is duly licensed or
qualified and in good standing in each jurisdiction wherein the nature of the
business transacted by it makes such licensing or qualification necessary.

 

(B.)                              POWER AND AUTHORITY

 

Buyer has the authority to execute and carry out this Contract and to perform
its obligations hereunder and all such actions have been duly authorized by all
necessary partnership action on its part.

 

(C.)                               NO CONFLICT

 

The execution, delivery and performance of this Contract will not conflict with,
result in the breach of, constitute a default under or accelerate performance
required by any of the terms of the Constitucion de Sociedad Comercial de
Responsabilidad Limitada denominada Empresa Electrica Nueva Esperanza S.R.L. or
the code of regulations of Buyer or any material covenant, agreement,
understanding, decree, indenture, instrument or order to which Buyer is a party
or by which Buyer or any of its properties or assets is bound or affected.

 

(D.)                              VALIDITY AND BINDING EFFECT

 

This Contract has been duly and validly executed and delivered by Buyer.  This
Contract constitutes a legal, valid and binding obligation of Buyer, enforceable
in accordance with its terms, except to the extent that its enforceability may
be limited by bankruptcy,

 

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insolvency, reorganization, moratorium or other similar law affecting the rights
of creditors generally or by general principles of equity.

 

ARTICLE 39                                        MISCELLANEOUS PROVISIONS

 

39.1                        Third-Party Beneficiaries

 

Except as provided in Article 26 entitled “Limitation of Liability”, these
provisions are for the benefit of the Parties hereto (and the Lender’s where
applicable) and not for any other third party.

 

39.2                        Survival

 

All provisions or obligations contained in this Contract which by their nature
or effect are required or intended to be observed, kept or performed after
termination or expiration of this Contract shall survive and remain binding upon
and for the benefit of the Parties, including, the Articles with the following
titles, which shall survive termination of this Contract:  Taxes, Warranty,
Patents, General Indemnity, Limitation of Liability, Proprietary Information,
Dispute Resolution, Governing Law, Software License, Personal Data Protection,
Export Control, Entire Agreement and Miscellaneous Provisions.

 

39.3                        Non-Waiver

 

Waiver by either Party of any right under this Contract shall not be deemed a
waiver by such Party of any other right hereunder.

 

39.4                        Invalidity

 

The invalidity in whole or in part of any part of this Contract shall not affect
the validity of the remainder of this Contract.

 

39.5                        No Nuclear Use

 

The Equipment and Services sold hereunder are not intended for application (and
shall not be used) in connection with any nuclear installation or activity and
Buyer warrants that it shall not use the Equipment and Services for such
purposes, or permit others to use or permit others to use the Equipment or
Services for any such purposes.  If, in breach of the foregoing, any such use
occurs, Seller shall have no liability for any nuclear or other damage, injury
or contamination, and Buyer shall indemnify Seller, its Affiliates and suppliers
of every type and tier against any such liability, whether arising as a result
of breach of contract, warranty, indemnity, tort (including negligence), strict
liability or otherwise.

 

39.6                        Counterparts

 

This Contract may be signed in any number of counterparts, each of which shall
constitute one and the same instrument.

 

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IN WITNESS WHEREOF

 

The Parties have caused this document to be executed by their authorized
representatives as of the Effective Date

 

 

SELLER

 

BUYER

 

 

 

GE PACKAGED POWER, INC.

 

EMPRESA ELECTRICA NUEVA

 

 

ESPERANZA S.R.L.

 

 

 

 

 

 

By: Lee Johnson

 

By:

 

 

 

/s/ Lee Johnson

 

/s/ Rafael Zoeger

(Signature)

 

(Signature)

 

 

 

Lee Johnson

 

Rafael Zoeger

(Printed Name)

 

(Printed Name)

 

 

 

 

 

 

Sales Leader—Southern Region

 

General Manager

(Title)

 

(Title)

 

 

 

 

 

 

September 26, 2008

 

September 26, 2008

(Date)

 

(Date)

 

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SELLER

 

SELLER

 

 

 

GE INTERNATIONAL, INC. SUCURSAL

 

GE INTERNATIONAL, INC. SUCURSAL

DE PERU

 

DE PERU

 

 

 

 

 

 

By:

 

By:

 

 

 

/s/ Pedro Weiss Barker

 

/s/ Otilia Longaray Castro

(Signature)

 

(Signature)

 

 

 

Pedro Weiss Barker

 

Otilia Longaray Castro

(Printed Name)

 

(Printed Name)

 

 

 

 

 

 

National Executive

 

Finance Manager

(Title)

 

(Title)

 

 

 

 

 

 

September 26, 2008

 

September 26, 2008

(Date)

 

(Date)

 

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Attachment 1 - Equipment Scope of Supply

 

46

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Basic Scope Description

 

Turbine

 

General Electric gas turbine model LM6000 is a two-shaft/two-spool engine
consisting of a five-stage low pressure compressor, a fourteen-stage high
pressure compressor, a two-stage high pressure turbine, and a five-stage low
pressure turbine.  The engine is equipped with a stainless steel mesh screen in
the inlet air stream for “last chance” protection against foreign object
damage.  The engine is shock mounted and shipped in position, with the exception
of the coupling spacer, which is removed and shipped in a separate container.

 

Generator

 

Air cooled, 2-pole generator operating at 13.8 kV, 60 Hz.  Generator is capable
of handling customer power requirement throughout a wide ambient temperature
range. The generator includes a brushless excitation system with permanent
magnet generator.  Neutral and line side cubicles are included.

 

Turbine/Generator Enclosure

 

The package is supplied with weatherproof, acoustic enclosures.  The enclosures
are designed to achieve noise abatement to an average of 85 dB(A) at 3 ft. (1.0
m) away and 5 ft. (1.5 m) above grade during full load operations.  The
enclosures are completely assembled and mounted over the equipment prior to
testing and shipment.  Both turbine and generator compartments are fully
ventilated with redundant fans (one running, one stand-by).  Explosion-proof
lighting is provided in both compartments.

 

Turbine/Generator Baseplate

 

The package is supplied with the support structures for the gas turbine
generator set consisting of a two-piece skid assembly, which is sectioned
between the gas turbine and the generator.  The full depth, bolted section is
designed to provide the full structural properties of the wide flange I-beams. 
Full depth crossmembers are utilized to provide for a rigid design that is
suitable for installation in earthquake areas (IBC2000) as well as providing a
convenient structure for transportation.

 

Air Inlet System

 

The package is supplied with a modular, multi-stage filtration system consisting
of inlet screens, a prefilter and a final barrier filter.  All air for
ventilation systems is filtered to the same level as turbine combustion air.  An
anti-ice, an evaporative cooling, a combustion air heating or a chilling system
is available as an option.  Filtered air is silenced before entering the turbine
plenum.  This design results in a compact arrangement and eliminates the need
for customer supplied inlet ducting when the standard design is utilized. 
Internal lighting of the filter house is provided to facilitate inspection and
service.  Package is also supplied with platforms and ladders to service the
inlet filter.

 

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Turbine Exhaust

 

The package is supplied with a circular, axial exhaust outlet with connection
flange to facilitate in-line mounting of an HRSG or simple cycle exhaust stack.

 

Fuel System

 

The package is supplied with a natural gas fuel system that utilizes an
electronically controlled fuel-metering valve.  For full-load operation, the
gaseous fuel must be supplied to the baseplate at 675 psig ± 20 (4,654 ±138
kPag).  Gas fuel must meet General Electric specification MID-TD-0000-1.

 

Lube Oil Systems

 

The package is supplied with two separate lube oil systems: one synthetic for
the gas turbine and one mineral for the generator.  The oil reservoirs and
piping are all stainless steel, and the lube oil system valves have stainless
steel trim.  The turbine coolers, oil reservoir, and filters are mounted on the
auxiliary equipment module.  The mineral lube coolers, reservoir and filters are
located on the main skid baseplate.  The auxiliary equipment module provides
simplified piping connections and reduces customer’s installation time and
costs.  Customer must supply cooling water to the shell and tube coolers. 
Turbine lube oil must meet MID-TD-0000-6.

 

Electro-Hydraulic Start System

 

The package is supplied with an electric motor driven hydraulic pump assembly,
filters, cooler and controls, mounted on the auxiliary equipment module.  A
hydraulic motor is also mounted on the gas turbine accessory gearbox.  Hydraulic
hoses are furnished to connect the auxiliary equipment module and the main
baseplate.

 

Fire Protection System

 

The package is supplied with a factory installed fire protection system complete
with optical flame detection, hydrocarbon sensing and thermal detectors, piping
and nozzles in both the generator and the turbine compartments.  The fire
protection system includes cylinders containing CO2 mounted on a separate skid. 
A 24 V DC battery and charger to power the fire protection system is also
included.  All alarms and shutdowns are annunciated at the turbine control panel
(TCP).  An alarm sounds at the turbine if the gas detectors detect high gas
levels, or if the system is preparing to release the CO2.  When the system is
activated, the package shuts down, and the primary CO2 cylinders are discharged
into the turbine and generator compartments via multiple nozzles, and the
ventilation dampers automatically close.  After a time delay and if required,
the reserve supply of CO2 is discharged.

 

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Digital Control System

 

The package is supplied with a free-standing Turbine Control Panel (TCP)
suitable for mounting in an indoor, non-hazardous area.  The control system
features an integrated turbine control system, vibration monitor, digital meter,
digital generator protective relay module and an HMI (human machine interface)
display of key discrete and analog data.  Alarm and shutdown events are
displayed on the HMI automatically.  An Ethernet TCP/IP EGD or RS485 Modbus Port
is provided to transmit unit conditions (status, pressures, temperature, etc.)
to the customer’s distributed control system.  The HMI is a desktop PC located
next to the TCP.  Power for the control panel is provided by a dedicated 24V DC
battery system with dual 100% capacity chargers, which are shipped separately
for installation by others.

 

Battery System

 

The equipment package is supplied with 24 V DC battery systems for the fire
protection and gas turbine generator control systems, as described in those
sections.  All battery systems are valve-regulated lead acid (VLRA) type. 
Battery systems ship loose for indoor customer installation.  If the optional
Power Control Module is selected, Seller will install the GE supplied DC battery
systems in that module.

 

Generator Protective Relays

 

The package is supplied with a microprocessor-based generator protective relay
module, mounted in the TCP.  The protective relay system includes functions
necessary for protection of the generator.

 

Soak Wash System

 

The package is supplied with a turbine cleaning system, which allows customers
to clean the compressor section of the turbine during full power operation. The
same system reservoir and piping are utilized for off-line soak washing. 
Auxiliary skid connections are provided for customer supplied purified water at
a maximum of 50 psig (345 kPag) and air at 100 – 120 psig (689 – 827 kPag). 
Customer is required to provide water meeting MID-TD-0000-4, detergent meeting
MID-TD-0000-5 and air filtered to ISA S7.3 standards.

 

Component Testing and Package Test

 

Every new gas turbine is performance tested under load in a GE Test Cell, using
procedures developed for flight turbine reliability.  The generator is tested to
ANSI C50.14 or IEC 34.3 standards at its factory of manufacture.

 

All gas turbine generator sets receive a static test including:

 

·                  Switch State (N.O. or N.C., actuation, wiring, and setpoint)

·                  Temperature element output, and wiring

·                  Transmitter range, output, and wiring

 

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·                  Solenoid operation

·                  Control valve torque motor, excitation, and return signal

·                  Fire system continuity, and device actuation

·                  System flushing verification

·                  Tubing integrity

 

A full load string test is available as an option.

 

Drawings, Data and Manuals

 

The package is supplied with a customer drawing package that includes general
arrangement drawings, flow and instrument diagrams, electrical one-line drawings
and interconnection plan drawings.  Additional electrical schematic diagrams and
logic drawings are provided for record.  See Attachment 8  for a detailed
typical list and typical drawing delivery.

 

Operation & Maintenance (O&M) and Installation & Commissioning (I&C) manuals are
provided and are printed in English.  Six hardcopies of the O&M Manuals, three
hardcopies of the I&C manuals, and one CD with both are included in the base
offering.  The manuals cover operating concepts for power generating equipment,
guides to troubleshooting, basic information on components, and equipment within
the turbine generator set.

 

Seller provides all engineering drawings on a secure server
www.project-net.com.  Each customer can enter this database and view, print or
annotate project drawings.  ProjectNet provides the customer with immediate
access to the latest drawing revisions.  ProjectNet speeds job completion and
saves weeks of time mailing drawings back and forth.

 

Training

 

The base scope of supply includes hands-on training for up to 10 operators and
supervisors, where students are assumed to have at least a journeyman’s
knowledge of electrical generating plant operation and to be proficient in
reading piping flow and instrument drawings, mechanical drawings, and have a
working knowledge of electrical generators, and gas turbines.  The course is
designed around an eight-hour day, five consecutive day schedule.  Instructors,
using specially developed training materials, provide a firm groundwork of basic
theory, plus advanced concepts with classroom and hands-on training.  Training
includes Gas Turbine Familiarization plus System Design & Operations and
Maintenance.

 

The trainer conducts the course in a lecture/seminar format where each major
topic is supported by literature with detailed descriptions and associated
engineering drawings.  A student-training manual is given to each student and
the client’s turbine-generator system is used for hands-on training to
supplement the classroom instruction.  At the completion of several related
topics the students are given a progressive examination to measure the
effectiveness of the presentation and as a tool to identify if any student has
not grasped

 

50

--------------------------------------------------------------------------------

 

the material.  At the completion of the course a final examination is given
which covers the entire course material and students are given a certificate of
completion.

 

Training is conducted at the Project site.  Local training at the Customer’s
facility is available upon request.  The Customer would be responsible for
providing all necessary training equipment for classes not held at the
manufacturing location.

 

Improvements and Changes

 

It is understood that the Seller has the right to make changes in product design
and add improvements to products or services at any time without incurring any
obligations to install the same on or in connection with the Equipment or
Services provided hereunder.

 

Performance Testing

 

Seller will attend the Facility performance test in support of the gas turbine
performance test to demonstrate Performance Guarantees of the Equipment at Site.
Facility performance, emissions, and noise tests are the responsibility of the
Buyer.  Seller’s performance test procedures in Attachment 5 will be
incorporated into the Facility performance test procedure that will be provided
by the Buyer.

 

Optional Equipment and Services Checklist and Descriptions

 

(I) Included       (S) Quoted Separately

 

Factory Options

 

I

 

Option A

 

Variable Inlet Guide Vanes (VIGV)

 

 

 

 

 

I

 

Option B

 

LM6000PD - Dry Low Emissions System (DLE) o

 

 

 

 

 

I

 

Option C

 

SPRINT® Power Augmentation o

 

 

 

 

 

I

 

Option D

 

Combustion Air Cooling – Chiller Coil o

 

 

 

 

 

I

 

Option E

 

Lube Oil Cooler - Fin/Fan o

 

 

 

 

 

I

 

Option F

 

Power System Stabilizer (PSS) o

 

 

 

 

 

I

 

Option G

 

Left-handed Piping Connections (one of three Units)

 

51

--------------------------------------------------------------------------------

 

I

 

Option H

 

Left-handed Lineside Cubicle (two of three Units)

 

 

 

 

 

I

 

Option J

 

Remote Monitoring and Diagnostic Service (First Year Service Included)

 

 

 

 

 

I

 

Option K

 

DC Backup Lighting

 

Factory Options Descriptions

 

Option A                Variable Inlet Guide Vanes (VIGV)

 

Seller furnishes the LM6000 engine with variable inlet guide vanes (VIGV).

 

This option is included with Option B

 

Option B                LM6000PD - Dry Low Emissions System (DLE)

 

A dry low emissions system can be provided for use on gaseous fuel.  This system
reduces emissions over the entire power range without water or steam.  NOx
emissions can be guaranteed at 25 ppm (Ref. 15% O2).

 

This option includes Option A.  A gas chromatograph is also included to monitor
the heating value of the gas fuel and adjust combustor flame temperature.

 

Option C                SPRINT® Power Augmentation

 

SPRINT® boosts engine performance up to 50.0 MW (ISO conditions) using a spray
intercooling design that increases the mass flow by cooling the air during the
compression process.  The system is based on an atomized water spray injected
through spray nozzles placed at two locations, one between the high pressure and
low pressure compressors, and the second at inlet bellmouth.  Water is atomized
using high pressure air taken off of the eighth stage bleed.  The water flow
rate is metered, using the appropriate engine control schedules and at the inlet
bellmouth.  Bellmouth and inter-stage portions on SPRINT® alternate operation
based on turbine inlet temperature.  Customer supplies 22 gpm (83 lpm) of
demineralized water to the connection on the unit.  Water must meet GE
specification MID-TD-0000-3.

 

Option D                Combustion Air Cooling – Chiller Coil

 

Lowering the combustion air inlet temperature can increase the power output of
the LM6000 generator set.  When specified, Seller can furnish high performance
inlet air chilling coils as an integral part of the air inlet system.  Customer
provides adequate

 

52

--------------------------------------------------------------------------------

 

quantities of chilled water and interconnecting piping to Seller furnished
chilling coils at the filter house.  The same coils can be used for anti-icing.

 

Option E                Lube Oil Cooler - Fin/Fan

 

This replaces the standard simplex shell and tube coolers for the lube oil
systems.  A simplex core fin-fan cooler complete with changeover valve mounted
on a separate base plate with dual fans is installed on a separate foundation.

 

Option F                Power System Stabilizer (PSS)

 

The power system stabilizer (PSS) sends supplementary control signals to the
generator’s voltage regulator to control power fluctuations and improve the
stability of the power system.  A power system study is to be completed by a
third party and has been excluded from Seller’s scope of supply.  With the study
complete, Seller can assist the customer in programming the PSS with the set
points established in the power system study.

 

Option G                Left-handed Piping Connections

 

In the standard LM6000 configuration, the customer’s piping connections are on
the right side, as viewed from the exciter.  As an option, the unit can be built
with the customer’s piping connections on the left side, as viewed from the
exciter.  The turbine removal door is placed on the side opposite the piping
connections.

 

Option H                Left-handed Lineside Cubicle

 

As viewed from the exciter end of a standard unit, the generator line-side
cubicle is on the right-hand side and the neutral cubicle is on the left-hand
side.  When specified, the location of these cubicles can be reversed.  However,
the termination box for generator instrument and control wiring box, (MGTB) must
remain on the right-hand side, and the turbine main terminal box (MTTB) must
remain on the left.

 

Option I Lineside Cubicle Entry Configuration Options

 

Top Bus Duct Entry

 

The standard lineside cubicle is configured for bottom cable entry.  With this
option, the lineside cubicle is configured for top bus duct entry.

 

Top Cable Entry

 

The standard lineside cubicle is configured for bottom cable entry.  With this
option, the lineside cubicle is configured for top cable entry.

 

Option J                Remote Monitoring and Diagnostic Service

 

The Monitoring and Diagnostics Service helps plant operators improve
availability, reliability, operating performance, and maintaining
effectiveness.  Monitoring of key

 

53

--------------------------------------------------------------------------------

 

parameters by factory experts may lead to early warning of equipment problems
and avoidance of expensive secondary damage.  Diagnostic programs seek out
emerging trends; prompting proactive intervention to avoid forced outages and
extended downtime.  The ability for GE engineers to view real-time operation
accelerates troubleshooting and sometimes removes the need for service personnel
to visit the plant.  Remote Monitoring and Diagnostic Service requires a
customer supplied communications link (telephone or cell phone).  One year of
service is included with this option.

 

Option K                DC Backup Lighting

 

Seller furnishes DC backup lighting in the turbine and generator enclosures as
an option.  DC lights turn on if AC power fails.

 

The following configurations will be provided.

 

Unit One Configuration

 

Right Hand Customer Piping

 

Left Hand Lineside Cubicle

 

Right Hand Neutral Cubicle

 

Unit Two Configuration

 

Left Hand Customer Piping

 

Right Hand Lineside Cubicle

 

Left Hand Neutral Cubicle

 

Unit Three Configuration

 

Right Hand Customer Piping

 

Left Hand Lineside Cubicle

 

Right Hand Neutral Cubicle

 

54

--------------------------------------------------------------------------------

 

Limits of GEPPI Scope

 

Listed below are the limits/exclusions to the Seller standard Scope of Supply.
 All piping, wiring, cables, ducts, etc., connecting to these points is
furnished by customer (others) unless modified by specification agreement.

 

Equipment System

 

Limits of GEPPI

 

 

 

·

All piping, including Fuel Gas, Fuel Oil, Steam, Cooling Water, Heating Water,
Demineralized Water, Lube Oil, Compressed Air, Instrument Air, Hydraulic Start
Oil

 

·

Flanged or threaded connection on Seller baseplate.

 

 

 

 

 

·

Inlet Air-to-Filter

 

·

Atmosphere (non-standard duct by others)

 

 

 

 

 

·

Turbine Package Ventilation/Cooling Air

 

·

Atmosphere (non-standard duct by others)

 

 

 

 

 

·

Turbine Exhaust

 

·

Exhaust flange on main baseplate

 

 

 

 

 

·

Instruments on Seller’s Baseplate

 

·

Terminal box on baseplate

 

 

 

 

 

·

Instrument wiring in Turbine Control Panel

 

·

Terminal in Turbine Control Panel

 

 

 

 

 

·

High Voltage Connections

 

·

Bus bar in Seller Lineside cubicle

 

 

 

 

 

·

Generator Ground Connections

 

·

Seller Neutral cubicle

 

 

 

 

 

·

Electric Motors

 

·

Terminal box on individual motor

 

 

 

 

 

·

Ladders and Platforms for Air Filter

 

·

Ladders and Platforms for Inlet Air Filter maintenance only

 

 

 

 

 

·

24 V DC Batteries and Chargers for Control System and Fire and Gas Systems

 

·

Battery terminals to baseplate (if supplied loose)

 

55

--------------------------------------------------------------------------------

 

Exclusions:

 

·                  Civil engineering design of any kind

 

·                  Building and civil works

 

·                  Site facilities

 

·                  Support steelworks and hangers for the gas turbine ducting,
silencing, and pipe work

 

·                  All inlet, exhaust, and ventilation ducting other than
included in the scope of supply

 

·                  Drains and/or vent piping from the gas turbine package to a
remote point

 

·                  Fuel storage, treatment and forwarding system

 

·                  Site grounding

 

·                  Lightning protection

 

·                  Power system studies

 

·                  Sensing and metering voltage transformers

 

·                  Machine power transformers, and associated protection

 

·                  Grid failure detection equipment

 

·                  Off loading, transportation and storage

 

·                  Off skid cabling, and design of off skid cable routing

 

·                  Balance of plant and energy optimization controls

 

·                  Anchor bolts, embedments, and grouting (quoted separately)

 

·                  Distributed plant control

 

·                  Customer’s remote control

 

·                  Field supervision (quoted separately)

 

·                  High voltage transformer(s), cables, and associated equipment

 

·                  Interconnecting piping, conduit, and wiring between equipment
modules

 

56

--------------------------------------------------------------------------------

 

·                  Plant utilities, including compressed air supply and off skid
piping

 

·                  Battery containment

 

·                  Lube oil measurement other than that defined in the scope of
supply

 

·                  Additional lube oil breather ducting other than that defined
in the scope of supply

 

·                  Fuel transfer pump

 

·                  Off skid fuel block and vent valves

 

·                  Fuel supply pipework beyond the scope of supply

 

·                  Generator controls other than that defined in the scope of
supply

 

·                  Load sharing control

 

·                  Balance of plant controls

 

·                  Field Performance Testing

 

·                  Site Labor

 

·                  Ladders, Stairs, and Platforms for equipment beyond the gas
turbine

 

57

--------------------------------------------------------------------------------

 

Site Conditions

 

The following table outlines the criteria conditions at the proposed jobsite for
the design of the equipment:

 

Location

 

Caleta Cruz, Peru

 

 

 

Elevation

 

Approx. 120 Feet

 

 

 

Minimum Site Temperature

 

59 F

 

 

 

Maximum Site Temperature

 

94 F

 

 

 

Design Point Ambient Temperature /
Relative Humidity

 

89.8 F (32.1 C)
60.4% RH

 

 

 

Primary Fuel Source

 

NG

 

 

 

Seismic Design Criteria (CTG Package

 

IBC 2000, Site Class D, Design Category F, Category II Facility with 1.25
Importance Factor

 

 

 

Maximum Wind Speed (Wind Load)

 

150 MPH

 

 

 

Roof Live / Snow Load

 

60 PSF

 

 

 

Near Field Noise at 3 ft horizontal and 5 ft vertical, NOTE 1

 

The below is based upon the placement of fin fan cooler to be reviewed by GE: 

 

85 DBA ARITHMETIC AVERAGE SOUND PRESSURE LEVEL (DB REF 20 MICROPASALS, RMS) AT
LOCATIONS AROUND THE PACKAGE (VERTICAL DISTANCE OF 5FT. (1.5M) ABOVE GRADE AT A
HORIZONTAL DISTANCE OF 3FT (1M) FROM THE EXTERIOR PLANE OF EQUIPMENT AS TESTED
IN A FREEFIELD CONDITION OVER A HARD REFLECTING GROUND PLANE.

 

THIS GUARANTEE COINCIDES WITH THE OPERATING AT BASE-LOAD)

 

 

 

Far Field Noise, NOTE 1

 

65 dB(A) at 400 ft

 

58

--------------------------------------------------------------------------------

 

NOTE 1:  Far field noise is based on single-unit only operation.  Multiple units
operating at the same time will have an impact on both near and far field noise
levels.

 

INSERT GE Fluid Specifications

 

59

--------------------------------------------------------------------------------

 

GE Energy

MID-TD-0000-5

 

June 2004

 

Liquid Detergent for Compressor Cleaning
for GE Aircraft Derivative Gas Turbines

 

This specification establishes the requirements for liquid detergent products
used to prepare cleaning solutions for cleaning the compressors of gas turbine
engines, where the intent is to restore performance by removing the build–up of
deposits on compressor components. Such deposits include salt, soils or oils
that may be ingested from the atmosphere.

 

The cleaning process shall be carried out by spraying the cleaning solution into
the bellmouth of the engine while the engine is running at power (on–line
cleaning) or while the engine is being cranked (crank soak cleaning).

 

For the purposes of this specification, the following definitions shall apply:

 

Liquid Detergent - A concentrated solution of water soluble surface active
agents and emulsifiable solvents.

 

Cleaning Solution - A solution or emulsion of liquid detergent in water or a
water and antifreeze mixture for direct engine application. The recommended
dilution of liquid detergent and water shall be determined by the liquid
detergent manufacturer.

 

1.                                      Applicable Documents

 

The following documents shall form a part of this specification to the extent
specified herein. Unless a specific issue is specified, the latest revision
shall apply.

 

ASTM D88

 

Standard Test Method For Saybolt Viscosity

 

 

 

ARP 1795

 

Stress–Corrosion of Titanium Alloys, Effect of Cleaning Agents on Aircraft
Engine Materials

 

 

 

AMS 1424

 

Deicing/Anti-icing Fluid, Aircraft (Newtonian-SAE Type 1)

 

2.                                      Detergent Properties

 

2.1                               Composition

 

The chemical composition of the detergent is not limited, other than as
specified herein.

 

2.2                               Biodegradability

 

Use of the liquid detergent/cleaning solution shall conform to local regulations
for water pollution. Use of biodegradable ingredients is recommended.

 

2.3                               Toxicity

 

Use of the liquid detergent/cleaning solution shall conform to local regulations
for industrial hygiene and air pollution. Use of nontoxic ingredients is
recommended.

 

2.4                               Health and Safety Information

 

The liquid detergent manufacturer shall make available health and safety
information for the liquid detergent as required by applicable local, state and
federal regulations.

 

2.5                               Solids

 

The liquid detergent shall contain no particles larger than 20 micron.

 

1

--------------------------------------------------------------------------------

 

MID-TD-0000-5

 

GE Energy

June 2004

 

 

 

2.6                               Physical and Chemical Properties

 

The liquid detergent shall meet the test requirements.

 

3.                                      Test Requirements

 

3.1                               Liquid Detergent

 

3.1.1                     Residue or Ash Content

 

Residue or ash content shall not exceed 0.01 percent when tested in accordance
with paragraph 4.1.

 

3.1.2                     Low Temperature Stability

 

The liquid detergent shall show no evidence of separation of component parts
when maintained at 40°F ± 3 (5°C ± 2). It is highly desirable although not
mandatory that the fluid shall remain liquid below 32°F (0°C).

 

3.1.3                     Cold Weather Solution Compatibility

 

The liquid detergent shall show no separation, layering or precipitation when
mixed to the liquid detergent manufacturer’s recommended dilution in one or more
of the following antifreeze solutions after 2 hours at 10°F ± 3 (-12°C ± 2):

 

·                  Isopropyl Alcohol

 

·                  Monopropylene glycol (PG)

 

·                  Acetone

 

See paragraph 6.1 for more information regarding liquid detergent and antifreeze
mixtures.

 

3.1.4                     Hard Water Compatibility

 

The liquid detergent shall show no separation or layering when mixed with
synthetic hard water prepared in accordance with paragraph 4.2.

 

3.1.5                     Acid and Alkali Acceptance

 

The liquid detergent shall show no separation, layering or precipitation when
tested in acidic or alkali media in accordance with paragraph 4.3.

 

3.1.6                     Salt Water Tolerance

 

The liquid detergent shall show no separation or gelling when mixed with 3.5
percent salt water in accordance with paragraph 4.4.

 

3.1.7                     Viscosity

 

The liquid detergent shall have a viscosity of 50 to 200 SUS at 77°F (25°C) when
tested in accordance with ASTM D88.

 

3.1.8                     pH

 

The pH of the liquid detergent as received shall be from 6.5 to 8.5 when
measured with a suitable pH meter employing a glass electrode.

 

3.2                               Cleaning Solution

 

3.2.1                     Corrosive Elements

 

Maximum levels of elements in the cleaning solution which may promote various
types of corrosion, shall be no greater than as shown in Table 1, when analyzed
by methods in paragraph 4.5.

 

2

--------------------------------------------------------------------------------

 

GE Energy

 

MID-TD-0000-5

 

 

June 2004

 

Table 1. Maximum Corrosives Limit

 

Total alkali metals (sodium +
potassium + lithium, etc.)

 

25 ppm max.

Magnesium + calcium

 

5 ppm max.

Vanadium

 

0.1 ppm max.

Lead

 

0.1 ppm max.

Tin + Copper

 

10 ppm max.

Sulfur

 

50 ppm max.

Chlorine

 

40 ppm max.

 

3.2.2                     pH

 

The pH of the cleaning solution shall be from 6.5 to 8.5 when measured with a
suitable pH meter employing a glass electrode.

 

4.                                      Test Methods

 

4.1                               Residue or Ash Content

 

Weigh 10 ± 0.1 gram sample of liquid detergent in a weighed 30 ml porcelain
crucible. Heat gently to volatilize any water or solvents. (Crucible may be
placed in air oven at 105°C ± 2 for 24 hours, followed by 240° C ± 2 for 24
hours to insure all volatile matter is evaporated.) Finally, ignite contents
over Bunsen Burner, first at low temperature under good oxidizing conditions
until all ignitable material is consumed, then place a crucible in a muffle
furnace at 1040 to 1100°C for 2 hours. Cool in desiccator, and weigh.

 

Percent residue or ash = (100 x A)/W

 

Where: A = grams of residue

W = grams of sample

 

4.2                               Hard Water Compatibility

 

4.2.1                     Preparation of Synthetic Hard Water

 

A hard water solution is prepared by dissolving the following in one liter of
just boiled and cooled distilled water:

 

a.                    0.20±0.005 gram Calcium Acetate, reagent grade Ca(C2H3O2)2
· H20

 

b.                   0.15±0.005 gram Magnesium Sulfate, reagent grade MgSO4 · 7
H20

 

4.2.2                     Hard Water Test

 

5 ml of liquid detergent shall be added to a clean 50 ml cylinder. 45 ml of
synthetic hard water shall be added and mixed well. The solution shall be
examined for compatibility after 16 hours at 77°F ± 5 (25°C ± 3).

 

4.3                               Acid and Alkali Acceptance

 

The liquid detergent shall be mixed with distilled water in accordance with the
liquid detergent manufacturer’s recommended dilution. To 50 ml of the solution,
add 1 ml of 75 percent phosphoric acid. To another 50 ml of the solution, add 5
ml of 75 percent phosphoric acid. To another 50 ml of the solution, add 1 ml of
50 percent potassium hydroxide. Let all three mixtures stand for one hour at
77°F ± 5 (25°C ± 3), and then examine for acid or alkali acceptance.

 

3

--------------------------------------------------------------------------------

 

MID-TD-0000-5

 

GE Energy

June 2004

 

 

 

4.4                               Salt Water Tolerance

 

Prepare a 3.5 percent by weight solution of sodium chloride in distilled water.
Add 15 ml of salt solution to 35 ml of liquid detergent and let stand for 1 hour
at 77°F ± 5 (25°C ± 3). Examine for salt water tolerance.

 

4.5                               Elemental Content

 

Elemental content shall be determined using the following methods:

 

Element

 

Method

Sulfur, Phosphorous

 

Inductivity Coupled Plasma Spectroscopy - Atomic Emission Spectroscopy (ICP-AES)

Chlorine

 

Microcoulometric filtration

Sodium, Potassium

 

Atomic Absorption (AA)

Other metals

 

ICP-AES or AA

 

5.                                      Material Compatibility

 

5.1                               Compatibility with Engine Materials

 

Use of the detergent gas turbine cleaner shall not have adverse effects on
engine system materials such as titanium stress corrosion, hot corrosion of
turbine components or damage to lubrication system components.

 

5.2                               Titanium Stress Corrosion

 

A titanium stress corrosion test in accordance with ARP 1795 or equivalent may
be run on the liquid detergent at the discretion of GE.

 

6.1                               Cold Weather Usage

 

In cold weather, liquid detergent must be added to antifreeze mixture rather
than to water alone. At present, the only acceptable antifreeze solutions are:

 

·                  Isopropyl Alcohol

 

·                  Monopropylene glycol (PG)

 

·                  Acetone

 

Monopropylene glycol (PG) must be per AMS 1424 and may be used down to 20°F
(-7°C)

 

Antifreeze mixtures are shown in Table 2. The liquid detergent manufacturer must
specify which, if any, of the antifreezes specified above is not compatible with
the liquid detergent.

 

The use of non-isopropyl alcohol, ethylene glycol or additives containing
chlorine, sodium or potassium are not permitted since they may attack the
titanium and other metals in the gas turbine.

 

It is extremely important that the liquid detergent and antifreeze solution be a
homogeneous mixture when sprayed into the bellmouth of the gas turbine. If after
2 hours the liquid detergent and antifreeze solution separates, (see paragraph
3.1.3) agitation of the mixture in the wash water tank is permissible. However,
the liquid detergent manufacturer shall specify that agitation is required.

 

4

--------------------------------------------------------------------------------

 

GE Energy

 

MID-TD-0000-5

 

 

June 2004

 

Table 2. Water Wash Antifreeze Mixtures.

 

Compressor Washing Antifreeze Mixtures

 

Outside Air Temp, oF (oC)

 

Monopropylene
glycol (PG)
% Vol

 

H2O
% Vol

 

Acetone
% Vol

 

H2O
% Vol

 

Isopropyl
Alcohol
% Vol

 

H2O
% Vol

 

+20 to +50 (-7 to 10)

 

21

 

79

 

25

 

75

 

22

 

78

 

+10 to +20 (-12 to –7)

 

N/A

 

N/A

 

40

 

60

 

34

 

66

 

0 to +10 (-18 to –12)

 

N/A

 

N/A

 

53

 

47

 

47

 

53

 

-10 to 0 (-23 to –18)

 

N/A

 

N/A

 

63

 

37

 

72

 

28

 

-20 to –10 (-29 to –23)

 

N/A

 

N/A

 

69

 

31

 

88

 

12

 

-30 to –20 (-34 to –29)

 

N/A

 

N/A

 

75

 

25

 

97

 

3

 

 

Compressor Rinsing Antifreeze Mixtures

 

Outside Air Temp, oF (oC)

 

Monopropylene
glycol (PG)
% Vol

 

H2O
% Vol

 

Acetone
% Vol

 

H2O
% Vol

 

Isopropyl
Alcohol
% Vol

 

H2O
% Vol

 

+20 to +50 (-7 to 10)

 

14

 

86

 

20

 

80

 

18

 

82

 

+10 to +20 (-12 to -7)

 

N/A

 

N/A

 

33

 

67

 

27

 

73

 

0 to +10 (-18 to -12)

 

N/A

 

N/A

 

43

 

57

 

39

 

61

 

-10 to 0 (-23 to -18)

 

N/A

 

N/A

 

50

 

50

 

58

 

42

 

-20 to -10 (-29 to -23)

 

N/A

 

N/A

 

55

 

45

 

70

 

30

 

-30 to -20 (-34 to -29)

 

N/A

 

N/A

 

60

 

40

 

77

 

23

 

 

5

--------------------------------------------------------------------------------

 

GE Marine & Industrial Engines

 

MID-TD-0000-4

 

 

May 1996

 

Compressor Cleaning Water Purity
Specification for GE Aircraft Derivative Gas Turbines in
Industrial Applications

 

1.1                               Scope

 

This specification establishes the requirements for purified water for use in
cleaning the compressor of gas turbine engines where the intent is to restore
performance by removing the build up of deposits on compressor components. The
water quality defined in this specification applies to water used in both
on–line compressor cleaning and crank–soak compressor cleaning.

 

1.2                               Definitions

 

For the purpose of this specification, the following definitions shall apply:

 

On–line Compressor Cleaning - A method of removing the build up of deposits on
compressor components while the engine is operating. On–line cleaning as
accomplished by spraying cleaning solution into the inlet of the engine while
the engine is operating.

 

Crank–Soak Compressor Cleaning - A method of removing the buildup of deposits on
compressor components while the engine is motored by the starter. Crank–soak
cleaning is accomplished by spraying cleaning solution into the inlet of the
engine while the engine is operating unfired at crank speed.

 

Liquid Detergent - A concentrated solution of water soluble surface active
agents and emulsifiable solvents.

 

Cleaning Solution - A solution of emulsion of liquid detergent and water or a
water and antifreeze mixture for direct engine application. The recommended
dilution of liquid detergent and water shall be specified by the liquid
detergent manufacturer.

 

2.                                      Applicable Documents

 

2.1                               Issue of Documents

 

The following documents shall form a part of this specification to the extent
specified herein. Unless a specific issue is specified, the latest revision
shall apply.

 

2.1.1  American Society of Testing and Materials

 

Available from American Society for Testing and Materials, 1916 Race Street,
Philadelphia, PA 19103.

 

ASTM D1192                       Equipment for Sampling and Steam

 

ASTM D1293                       Tests for pH of Water

 

ASTM D4191                       Tests for Sodium in Water by atomic Absorbtion
Spectography

 

ASTM D4192                       Tests for Potassium in Water by Atomic
Absorbtion Spectography

 

ASTM D5907                       Tests for Filterable and Non-Filterable Matter
in Water

 

ASTM D3370                       Practices for Sampling Water

 

3.                                      Requirements

 

3.1                               Sampling Requirements

 

The sampling shall be in accordance with ASTM D1192 and ASTM D3370. A

 

1

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MID-TD-0000-4

 

GE Marine & Industrial Engines

May 1996

 

 

 

minimum sample of one (1) gallon or four (4) liters shall be supplied.

 

3.2                               Chemical Requirements

 

The water shall meet the following requirements when tested in accordance with
the designated test method.

 

3.3                               Filtration Requirements

 

The water shall contain no particles larger than 100 microns absolute.

 

 

 

Limit

 

Test Method

Total matter, ppm, max

 

100

 

ASTM D5907

pH

 

6.5 - 8.5

 

ASTM D1293

Sodium+ potassium, ppm, max

 

25

 

ASTM D4191 &

 

 

 

 

ASTM D4192

 

2

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MID-TD-0000-1

Revised, November 2001

 

 

g

GE Energy

 

Process Specification

Fuel Gases For Combustion In AeroDerivative Gas Turbines

 

These instructions do not purport to cover all details or variations in
equipment or to provide for every possible contingency to be met in connection
with installation, operation or maintenance. Should further information be
desired or should particular problems arise which are not covered sufficiently
for the purchaser’s purposes the matter should be referred to the GE Company.

 

© 2001 GENERAL ELECTRIC COMPANY

 

 

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Fuel Gases for Combustion in AeroDerivative Gas Turbines

 

TABLE OF CONTENTS

 

1

GENERAL

 

1

 

 

 

 

2

FUEL GAS CLASSIFICATION

 

3

2.1

Natural and Liquefied Petroleum Gas (LPG)

 

3

2.2

Gasification Fuels

 

3

2.3

Process Gases

 

4

2.4

Refinery Gases

 

5

 

 

 

 

3

FUEL PROPERTIES

 

5

3.1

Heating Values

 

5

3.2

Modified Wobbe Index Range

 

5

3.3

Superheat Requirement

 

6

3.4

Flammability Ratio

 

6

3.5

Gas Constituent Limits

 

6

3.6

Gas Fuel Supply Pressure

 

6

 

 

 

 

4

CONTAMINANTS

 

6

4.1

Particulate

 

7

4.2

Liquids

 

7

4.3

Sulfur

 

7

 

 

 

Appendix 1 DEFINITIONS

 

9

 

 

 

 

LIST OF TABLES

 

 

 

 

 

Table 1.

Fuel Gas Usability

 

1

Table 2.

Test Methods for Gaseous Fuels

 

2

 

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1                                         GENERAL

 

GE AeroDerivative gas turbines have the ability to burn a wide range of gaseous
fuels as shown in Table 1. These gases present a broad spectrum of properties
due to both active and inert components. This specification is designed to
define guidelines that must be followed in order to burn these fuels in an
efficient, trouble-free manner, while protecting the gas turbine and supporting
hardware.

 

Table 2 identifies the acceptable test methods to be used in determining gas
fuel properties.

 

TABLE 1
FUEL GAS USABLILITY

 

 

 

LHV
Btu/SCF

 

Wobbe

 

 

 

Operational

 

Applicability

Fuel Type

 

(kJ/NM3)

 

Number

 

Major Components

 

Comments

 

SAC

 

DLE

Pipeline Natural Gas

 

850-1200
(33383-
47128)

 

45-60

 

Methane

 

No Restrictions

 

Yes

 

Yes

Medium BTU Natural Gas

 

400 - 850
(15709-
33838)

 

20-45

 

Methane, Hydrocarbons (HC), carbon dioxide, Nitrogen

 

Requires > 700 BTU/scf (27492 kJ/NM3) for starting. May require modified fuel
nozzles. Contact GE

 

Yes

 

No,
See
Note 8.

Liquefied Petroleum Gas (LPG)

 

2300-
3200
(90330-
125676)

 

70-75

 

Propane, Butane

 

May require specific fuel nozzles. Contact GE

 

Yes

 

No

Gasification Gases

· Air Blown

 

 

 

 

· Oxygen Blown

 

150-200
(5891-
7855)

200- 400
(7855-
15709)

 

6-8

8-20

 

Carbon monoxide,
Hydrogen, HC,
Nitrogen, Water Vapor

Carbon monoxide,
Hydrogen, HC, Water
Vapor

 

Contact GE

Contact GE

 

Yes

Yes

 

No

No

Process Gases

 

300-1000
(11782-
39274)

 

15-50

 

Methane, Hydrogen,
Carbon monoxide,
Carbon dioxide

 

Requires >700
BTU/scf (27492
kJ/NM3) for starting. Restricted transient operation.

 

Yes

 

See
Note 8

Refinery Gases

 

1000-
1300
(39274-
51056

 

45-60

 

Methane, Hydrogen,
Carbon monoxide,
Ethylene, Propylene,
Butylene

 

No restrictions.
Hydrogen content
should be reviewed
by GE.

 

Yes

 

See
Note 8

 

Notes:

 

1.               When considering the use of alternate fuels, provide details of
the fuel constituents, fuel temperature, and expected engine usage conditions
and operating characteristics to GE for evaluation and recommendations.

 

2.               Values and limits apply at the inlet of the gas fuel control
module.

 

1

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Fuel Gases for Combustion in AeroDerivative Gas Turbines

 

3.               Heating value ranges shown are provided as guidelines. Specific
fuel analysis must be furnished to GE for evaluation. The standard configured
single annular combustor (SAC) gas turbines require a fuel with a LHV no less
than of 6500 BTU/pound. The Dry Low Emissions (DLE) combustion system requires a
minimum LHV of 18000 BTU/pound. (Reference Section 3.1)

 

4.               The quantity of sulfur in gas fuels is not limited by this
specification. Experience has shown that oxidation/corrosion rates are not
significantly affected by fuel sulfur levels up to 1.3% sulfur. Hot corrosion of
hot gas path parts is affected by the presence of the specified trace metals.
Sulfur levels shall be considered when addressing HRSG Corrosion, selective
catalytic reduction (SCR) deposition, exhaust emissions, system material
requirements, elemental sulfur deposition and iron sulfide. (Reference
Section 4.3)

 

5.               The fuel gas supply shall be 100% free of liquids. Admission of
liquids can result in combustion and/or hot gas path component damage.
(Reference Section 3.3)

 

6.               Wobbe Number, or Modified Wobbe Number Index, is described in
3.2.

 

7.               Gases with Wobbe Number Index greater than 40 may be applicable
for DLE. Contact GE.

 

8.               Process and refinery gases with <5% hydrogen content and low CO
and CO2 content may be acceptable for DLE application. Contact GE.

 

NM3 is at 0°C, 101.325kPa (sea level)

 

TABLE 2
TEST METHODS FOR GASEOUS FUELS

 

PROPERTY

 

ASTM METHOD

Gas Composition to C6+

 

D1945 - Standard method for constituents of gases by gas chromatography

Heating Value

 

D3588 - Procedure for calculating calorific value and specific gravity of
gaseous fuels

Specific Gravity

 

D3588 - Procedure for calculating calorific value and specific gravity of
gaseous fuels

Compressibility Factor

 

D3588 - Procedure for calculating calorific value and specific gravity of
gaseous fuels

Dew Point (see note 1)

 

D1142 - Water vapor content of gaseous fuels by measurement of dew point
temperature

Sulfur

 

D1072 - Test for total sulfur in fuel gases (see note 2)

D3246 - Test for total sulfur in fuel gases

Chemical Composition

 

D2650 - Standard method for chemical composition of gases by mass spectrography

 

Notes:

 

1.                           Hydrocarbon and water dew points shall be
determined by direct dew point measurement (Chilled Mirror Device). If dew point
cannot be measured, an extended gas analysis, which identifies hydrocarbon
components from C1 through C14, shall be performed. This analysis must provide
an accuracy of greater

 

2

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MID-TD-0000-1

 

than 10 ppmv. A standard gas analysis to C6+ is normally not acceptable for dew
point calculation unless it is known that heavier hydrocarbons are not present,
as is most often the case with liquefied natural gases.

 

2.                             This test method will not detect the presence of
condensable sulfur vapor. Specialized filtration equipment is required to
measure sulfur at concentrations present in vapor form. Contact GE for more
information.

 

2                                         FUEL GAS CLASSIFICATION

 

2.1                               Natural and Liquefied Petroleum Gas (LPG)

 

Natural gases are predominantly methane with much smaller quantities of the
slightly heavier hydrocarbons such as ethane, propane and butane. Liquefied
petroleum gas is propane and/or butane with traces of heavier hydrocarbons.

 

2.1.1                     Pipeline Natural Gas

 

Natural gases normally fall within the calorific heating value range of 850 to
1200 Btu/SCF (33383-47128 kJ/NM3) (LHV). Actual calorific heating values are
dependent on the percentages of hydrocarbons and inert gases contained in the
gas.

 

2.1.2                     Medium BTU Natural Gas

 

Natural gases are found in and extracted from underground reservoirs. These “raw
gases” may contain varying degrees of nitrogen, carbon dioxide, hydrogen
sulfide, and contain contaminants such as salt water, sand and dirt. Processing
by the gas supplier normally reduces and/or removes these constituents and
contaminants prior to use in the gas turbine. A gas analysis must be performed
to ensure that the fuel supply to the gas turbine meets the requirements of this
specification.

 

2.1.3                     Liquefied Petroleum Gases

 

The heating values of Liquefied Petroleum Gases (LPGs) normally fall between
2300 and 3200 Btu/SCF (90330-125676 kJ/NM3) (LHV). Based on their high
commercial value, these fuels are normally utilized as a back—up fuel to the
primary gas fuel for gas turbines. Since LPGs are normally stored in a liquid
state, it is critical that the vaporization process and gas supply system
maintains the fuel at a temperature above the minimum required superheat value.
Fuel heating and heat tracing is required to ensure this.

 

2.2                               Gasification Fuels

 

Other gases that may be utilized as gas turbine fuel are those formed by the
gasification of coal, petroleum coke or heavy liquids. In general, the heating
values of gasification fuel are substantially lower than other fuel gases. These
lower heating value fuels require that the fuel nozzle gas flow passages be
larger than those utilized for fuels of higher heating values.

 

Gasification fuels are produced by either an Oxygen Blown or Air Blown
gasification process.

 

2.2.1                     Oxygen Blown Gasification

 

The heating values of gases produced by oxygen blown gasification fall in the
range of 200 to 400 Btu/SCF (7855-15709 kJ/NM3). The Hydrogen (H2) content of
these fuels is normally above 30% by volume and have H2/CO mole ratio between
0.5 to 0.8. Oxygen blown gasification fuels are often mixed with steam for
thermal NOx control, cycle efficiency improvement and/or power augmentation.
When utilized, the steam is injected into the combustor by an independent
passage. The current guideline for Hydrogen plus CO constituent is limited to
75% by volume for LM6000 and to 85% for the other AeroDerivative gas turbines.
Due to high hydrogen content of these fuels, oxygen blown gasification fuels are
normally not suitable for Dry Low Emissions (DLE) applications, for which the
Hydrogen content is limited to 5% by volume.. The high flame speeds resulting
from high hydrogen fuels can result in flashback or primary zone re–ignition on
DLE pre–mixed combustion systems. Utilization of these fuels shall be reviewed
by GE.

 

3

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Fuel Gases for Combustion in AeroDerivative Gas Turbines

 

2.2.2                     Air Blown Gasification

 

Gases produced by air blown gasification normally have heating values between
150 and 200 BTU/ SCF (5891- 7855 kJ/NM3) LHV. The Hydrogen (H2) content of these
fuels can range from 8% to 20% by volume and have a H2/CO mole ratio 0.3 to 3:1.
The use and treatment of these fuels are similar to that identified for oxygen
blown gasification.

 

For Gasification fuels a significant part of the total turbine flow comes from
the fuel. In addition, for oxygen blown fuels there is a diluent addition for
NOx control. Careful integration of the gas turbine with the gasification plant
is required to assure an operable system. Due to the low volumetric heating
value of both oxygen an air blown gases, special fuel system and fuel nozzles
are required.

 

2.3                               Process Gases

 

Many chemical processes generate surplus gases that may be utilized as fuel for
gas turbines. (i.e. tail or refinery gases). These gases often consisting of
methane, hydrogen, carbon monoxide, and carbon dioxide that are normally
byproducts of petrochemical processes. Due to the hydrogen and carbon monoxide
content, these fuels have large rich to lean flammability limits. These types of
fuels often require inerting and purging of the gas turbine gas fuel system upon
unit shutdown or a transfer to a more conventional fuel. When process gas fuels
have extreme flammability limits such that the fuel will auto ignite at turbine
exhaust conditions, a more “conventional” start–up fuel, such as methane, is
required.

 

Additional process gases utilized as gas turbine fuels are those which are
byproducts of steel production. These are:

 

2.3.1                     Blast Furnace Gases (BFGs)

 

Blast Furnace Gases (BFGs), alone, have heating values below minimal allowable
limits. These gases must be blended with other fuel to raise the heating value
to above the required limit. Coke Oven and/or Natural Gases or hydrocarbons such
as propane or butane can be utilized to accomplish this.

 

2.3.2                     Coke Oven Gases

 

Coke oven gases are high in H2 and H4C and may be used as fuel for single
annular combustion (SAC) systems, but are not suitable for Dry Low Emissions
(DLE) combustion applications. These fuels often contain trace amounts of heavy
hydrocarbons, which when burned could lead to carbon buildup on the fuel
nozzles. The heavy hydrocarbons must be “scrubbed” or removed from the fuel
prior to delivery to the gas turbine.

 

2.3.3                     COREX Gases

 

COREX gases are similar to oxygen blown gasified fuels, and may be treated as
such. They are usually lower in H2 content and have lower heating values than
oxygen blown gasified fuels. Further combustion related guidelines could be
found in Bureau of Mines Circulars 503 and 622.

 

2.3.4                     Hydrogen

 

The presence of gaseous hydrogen in the fuel can present special problems due to
the high flame speed and high temperatures associated with combustion, and the
very wide flammability limits of this gas. Treatment of fuels containing
hydrogen are separated into three categories, less than 5% by volume, 6% to 30%
by volume and over 30%. If the hydrogen fuel content is 5% or less, no special
precautions are necessary and starting on this fuel mixture can be permissible,
assuming there are no other restrictive substances in the mix.

 

For fuels containing more than 5%, but 30% or less hydrogen, an alternative
starting fuel may be required by local safety codes and a special exhaust system
purge cycle is incorporated into the gas turbine start sequence to eliminate
accumulated fuels from an aborted start. In addition, special high point venting
is required for both the fuel gas and turbine compartments since the fuel
constituents are normally lighter than air. The vents hold the compartment at a
slight vacuum relative to local ambient. Special precautions must also be taken
to completely seal the fuel delivery system from leaks. Consult the local
authorities for specific local safety codes.

 

4

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Fuel Gases for Combustion in AeroDerivative Gas Turbines

 

MID-TD-0000-1

 

If the fuel contains more than 30% hydrogen, electrical devices used in the fuel
gas and turbine compartments should be certified for use in Group B (explosive)
atmospheres. Consult the local authorities for specific local safety codes.

 

2.4                               Refinery Gases

 

Many hydrocarbon fuels contain olefin hydrocarbon compounds which have been
thought to prohibit their use in aeroderivative gas turbines.

 

Fuel temperature is also a consideration in order to use standard fuel nozzles
and to avoid the possibilities of fuel polymerization. Maximum fuel temperature
of 125°F (52° C) is recommended. It may be possible to go as high as 190°F (88°
C), but this may require non-standard fuel nozzle sizing and should be
considered on a case by case basis. Please contact GE for assistance.

 

Because refinery gas fuels usually have significant higher hydrocarbon and
olefin content the combustor flame temperatures are typically higher, resulting
in higher than normal (high methane gas) NOx emissions. Contact GE for effect on
emissions.

 

3                                         FUEL PROPERTIES

 

3.1                               Heating Value

 

A fuel’s heat of combustion, or heating value, is the amount of energy,
expressed in Btu (British thermal unit), generated by the complete combustion,
or oxidation, of a unit weight of fuel. The amount of heat generated by complete
combustion is a constant for a given combination of combustible elements and
compounds.

 

For most gaseous fuels, the heating value is determined by using a constant
pressure, continuous type calorimeter. This is the industry standard. In these
units, combustible substances are burned with oxygen under essentially constant
pressure conditions. In all fuels that contain hydrogen, water vapor is a
product of combustion, which impacts the heating value. In a bomb calorimeter,
the products of combustion are cooled to the initial temperature and all of the
water vapor formed during combustion is condensed. The result is the HHV, or
higher heating value, which includes the heat of vaporization of water. The LHV,
or lower heating value, assumes all products of combustion including water
remain in the gaseous state, and the water heat of vaporization is not
available.

 

3.2                               Modified Wobbe Index Range

 

While gas turbines can operate with gases having a very wide range of heating
values, the amount of variation that a single specific fuel system can
accommodate is much less. Variation in heating value as it affects gas turbine
operation is expressed in a term identified as modified Wobbe Index (Natural
Gas, E. N. Tiratsoo, Scientific Press Ltd., Beaconsfield, England, 1972). This
term is a measurement of volumetric energy and is calculated using the Lower
Heating Value (LHV) of the fuel, specific gravity of the fuel with respect to
air at ISO conditions, and the fuel temperature, as delivered to the gas
turbine. The mathematical definition is as follows:

 

Modified Wobbe Index =LHV/(SGgas x T)1/2

 

This is equivalent to:

 

Modified Wobbe Index =LHV/[(MWgas/28.96) x T] 1/2

 

Where:

 

 

LHV

=

Lower Heating Value of the Gas Fuel (Btu/scf)

SGgas

=

Specific Gravity of the Gas Fuel relative to Air

MWgas

=

Molecular Weight of the Gas Fuel

T

=

Absolute Temperature of the Gas Fuel (Rankine)

28.96

=

Molecular Weight of Dry Air

 

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Fuel Gases for Combustion in AeroDerivative Gas Turbines

 

The allowable modified Wobbe Index range is established to ensure that required
fuel nozzle pressure ratios be maintained during all combustion/turbine modes of
operation. When multiple gas fuels are supplied and/or if variable fuel
temperatures result in a Modified Wobbe Index that exceed the ± 10% limitation,
independent fuel gas trains, which could include control valves, manifolds and
fuel nozzles, may be required for standard combustion systems. For DLE
applications the Wobbe Index range must be between 40 and 60. An accurate
analysis of all gas fuels, along with fuel gas temperature profiles shall be
submitted to GE for proper evaluation.

 

3.3                               Superheat Requirement

 

The superheat requirement is established to ensure that the fuel gas supplied to
the gas turbine is 100% free of liquids. Dependent on its constituents, gas
entrained liquids could cause degradation of gas fuel nozzles, and for DLE
applications, premixed flame flashbacks or re-ignitions. A minimum of 50°F (28°
C) of superheat is required and is specified to provide enough margin to
compensate for temperature reduction due to pressure drop across the gas fuel
control valves.

 

3.4                               Flammability Ratio

 

Fuel gases containing hydrogen and/or carbon monoxide will have a ratio of rich
to lean flammability limits that is significantly larger than that of natural
gas. Typically, gases with greater than 5% hydrogen by volume fall into this
range and require a separate startup fuel. Consult the local authorities for
specific local safety codes.

 

Fuel gases with large percentage of an inert gas such as nitrogen or carbon
dioxide will have a ratio of rich—to—lean flammability limits less than that of
pure natural gas. Flammability ratios of less than 2.2 to 1 as based on volume
at ISO conditions (14.696 psia and 59°F (101.325 kPa and 15°C)), may experience
problems maintaining stable combustion over the full operating range of the
turbine.

 

3.5                               Gas Constituent Limits

 

Gas constituents are not specifically limited except to the extent described in
Fuel Gas Classification. These limitations are set forth to assure stable
combustion through all gas turbine loads and modes of operation. Limitations are
more stringent for DLE combustion systems where “premixed” combustion is
utilized. A detailed gas analysis shall be furnished to GE for proper
evaluation.

 

3.6                               Gas Fuel Supply Pressure

 

Gas fuel supply pressure requirements are dependent on the gas turbine model and
combustion design, the fuel gas analysis and unit specific site conditions.
Minimum and maximum supply pressure requirements can be determined by GE for
specific applications.

 

4                                         CONTAMINANTS

 

Dependent on the type of fuel gas, the geographical location and the forwarding
means there is the potential for the “raw” gas supply to contain one or more of
the following contaminants:

 

1. Tar, lamp black, coke

2. Water, salt water

3. Sand, clay

4. Rust

5. Iron sulfide

6. Scrubber oil or liquid

7. Compressor Lube oil

8. Naphthalene

9. Gas Hydrates

 

It is critical that the fuel gas is properly conditioned prior to being utilized
as gas turbine fuel. This conditioning can be performed by a variety of methods.
These include but are not limited to media filtration, inertial separation,

 

6

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Fuel Gases for Combustion in AeroDerivative Gas Turbines

 

MID-TD-0000-1

 

coalescing and fuel heating. Trace metal, particulate and liquid contamination
limits are given below. These limits are given in parts per million by weight
(ppmw) corrected to the actual heating value of the fuel. It is critical that
fuel gas conditioning equipment be designed and sized so that these limits are
not exceeded.

 

4.1                               Particulate

 

Contamination limits for particulates are established to prevent fouling and
excessive erosion of hot gas path parts, erosion and plugging of combustion fuel
nozzles and erosion of the gas fuel system control valves. The utilization of
gas filtration or inertial separation is required. The filtration level should
be a beta ratio of 200 minimum (efficiency of 99.5%) at 5µ or less. The total
particulate should not exceed 30 ppm by weight. GE requires the use of stainless
steel piping downstream of this last level of filtration.

 

4.2                               Liquids

 

No liquids are allowed in the gas turbine fuel gas supply. Liquids contained in
the fuel can result in nuisance and/or hardware damaging conditions. These
include rapid excursions in firing temperature and gas turbine load, primary
zone re-ignition and flashback of premixed flames, and when liquids carry over
past the combustion system, melting of hot gas path components. When liquids are
identified in the gas supply, separation and heating is employed to achieve the
required superheat level.

 

4.3                               Sulfur

 

There is no specific limit on natural gas fuel sulfur content if the engine is
used in an application where both the fuel and environment are free of alkali
metals. There are several concerns relative to the levels of sulfur contained in
the fuel gas supply. Many of these are not directly related to the gas turbine
but to associated equipment and emissions requirements. These concerns include
but are not limited to:

 

4.3.1                     Hot Gas Path Corrosion

 

Typically, use of sulfur bearing fuels will not be limited by concerns for
corrosion in the turbine hot gas path unless alkali metals are present. Sodium,
potassium and other alkali metals are not normally found in natural gas fuels,
but are typically found to be introduced in the compressor inlet air in marine
environments, as well as in certain adverse industrial environments. The total
amount of sulfur and alkali metals from all sources shall be limited to form the
equivalent of 0.6 ppm of alkali metal sulfates in the fuel. Unless sulfur levels
are extremely low, alkali levels are usually limiting in determining hot
corrosion of hot gas path materials. For low Btu gases, the fuel contribution of
alkali metals at the turbine inlet is increased over that for natural gas and
the alkali limit in the fuel is therefore decreased. The total amount of alkali
metals (a) in gas fuels used with engines having marinized (corrosion-resistant)
coatings on the high pressure turbine blading shall not exceed 0.2 ppm (b).

 

--------------------------------------------------------------------------------

(a)                                       Sodium, potassium, and lithium.
Experience has shown that sodium is by far the preponderant alkali metal, if
any, found in gaseous fuels.

 

(b)                                      This limit assumes zero alkali metals
in the inlet air or injected water or steam. When actual levels are above zero,
the maximum allowable sodium content of the fuel must be reduced in accordance
with the following relationship:

 

ppm sodium inlet air x Air/Fuel Ratio

 

=

ppm sodium in water or steam x

 

 

 

Water or Steam ratio

 

=

 

Fuel

 

 

 

 

 

ppm sodium in fuel

 

=

Total fuel equivalence for sodium from all

 

 

 

 

sources not to exceed

 

 

0.2 ppm

 

 

7

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4.3.2                     HRSG Corrosion

 

If heat recovery equipment is used, the concentration of sulfur in the fuel gas
must be known so that the appropriate design for the equipment can be specified.
Severe corrosion from condensed sulfuric acid results if a heat recovery steam
generator (HRSG) has metal temperatures below the sulfuric acid dew point.
Contact the HSRG supplier for additional information.

 

4.3.3                     Selective Catalytic Reduction (SCR) Deposition

 

Units utilizing ammonia injection downstream of the gas turbine for NOx control
can experience the formation of deposits containing ammonium sulfate and
bisulfate on low temperature evaporator and economizer tubes. Such deposits are
quite acidic and therefore corrosive. These deposits, and the corrosion that
they cause, may also decrease HRSG performance and increase backpressure on the
gas turbine. Deposition rates of ammonium sulfate and bisulfate are determined
by the sulfur content of the fuel, ammonia content in the exhaust gas, tube
temperature and boiler design. Fuels having sulfur levels above those used as
odorants for natural gas should be reported to GE . In addition, the presence of
minute quantities of chlorides in the inlet air may result in cracking of AISI
300 series stainless steels in the hot gas path. Contact the SCR supplier for
additional information.

 

4.3.4                     Exhaust Emissions

 

Sulfur burns mostly to sulfur dioxide, but 5% to 10% oxidizes to sulfur
trioxide. The latter can result in sulfate formation, and may be counted as
particulate matter in some jurisdictions. The remainder will be discharged as
sulfur dioxide. To limit the discharge of acid gas, some localities may restrict
the allowable concentration of sulfur in the fuel.

 

4.3.5                     Elemental Sulfur Deposition

 

Solid elemental sulfur deposits can occur in gas fuel systems downstream of
pressure reducing stations or gas control valves under certain conditions. These
conditions may be present if the gas fuel contains elemental sulfur vapor, even
when the concentration of the vapor is a few parts per billion by weight.
Concentrations of this magnitude cannot be measured by commercially available
instrumentation and deposition cannot therefore be anticipated based on a
standard gas analysis. Should deposition take place, fuel heating will be
required to maintain the sulfur in vapor phase and avoid deposition. A gas
temperature of 130°F (54°C) or higher may be required at the inlet to the gas
control valves to avoid deposition, depending on the sulfur vapor concentration.
The sulfur vapor concentration can be measured by specialized filtering
equipment. If required, GE can provide further information on this subject.

 

8

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APPENDIX 1 – DEFINITIONS

 

Dew Point

 

This is the temperature at which the first liquid droplet will form as the gas
temperature is reduced. Common liquids found in gas fuel are hydrocarbons, water
and glycol. Each has a separate and measurable dew point. The dew point varies
considerably with pressure and both temperature and pressure must be stated to
properly define the gas property. Typically, the hydrocarbon dew point will peak
in the 300 to 600 psia (2068 to 4137 kPa) range.

 

Dry Saturated Conditions

 

The gas temperature is at, but not below or above, the dew point temperature. No
free liquids are present

 

Gas Hydrates

 

Gas hydrates are semi–solid materials that can cause deposits that plug
instrumentation lines, control valves and filters. They are formed when free
water combines with one or more of the C1 through C4 hydrocarbons. Typically the
formation will take place downstream of a pressure reducing station where the
temperature drop is sufficient to cause moisture condensation in a region of
high turbulence. Because hydrates can cause major problems in the gas
distribution network, the moisture content is usually controlled upstream at a
dehydration process station.

 

Gas Hydrate Formation Line

 

This is similar to the dew point line except the temperature variation with
pressure is much less. The hydrate line is always below or at the moisture dew
point line as free water must exist in order for hydrates to form. Maintaining
50°F of superheat above the moisture dew point will eliminate hydrate formation
problems.

 

Glycol

 

Glycol is not a natural constituent of natural gas but is introduced during the
dehydration process. Various forms of glycol are used, diethylene and
triethylene glycol being two most common. In some cases glycol is injected into
the pipeline as a preservative. In most cases, glycol may only be a problem
during commissioning of a new pipeline or if an upset has taken place at an
upstream dehydration station.

 

Superheat

 

This is defined as the difference between the gas temperature minus the liquid
dew point. The difference is always positive or zero. A negative value implies
that the value is being measured at two differing states of pressure and
temperature and is not valid. A measured gas temperature below the theoretical
dew point means that the gas is in a wet saturated state with free liquids
present.

 

Saturation Line

 

This is the same as the dew point line.

 

Wet Saturated Conditions

 

A point where a mixture consists of both vapor and liquids.

 

9

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GE Energy

MID-TD-0000-6

 

October 2007

 

Lubricating Oil Specification for GE

Aircraft Derivative Gas Turbines

 

This document provides the requirements and application guidelines for selection
of lubricating oils which can be satisfactorily utilized in GE Marine and
Industrial Aeroderivative Applications. It is recommended that the lubricating
oil selected be reviewed with GE prior to its use.

 

1.0          Oil Specifications

 

Oils conforming to the US Department of Defense (DoD) Specifications shown in
paragraph 2.1 are acceptable for use in GE Aircraft Derivative gas turbines,
provided they are listed on the Qualified Product List (QPL) for the specific
Specification.

 

1.1          Commercial Specifications

 

Commercially available synthetic based lubricating oils, per the Supplier’s
Specification, are acceptable for use in GE Aircraft Derivative gas turbines,
provided they are listed in Section 4 of this document. Such oils largely
conform to the primary requirements of the oils in Section 1.0, but certain
variations have been approved. Such oils have been qualified by the Supplier to
meet the requirements of this document.

 

2.0          Applicable Documents

 

The following documents shall form a part of this document to the extent
specified herein. Unless a particular issue is specified, the latest revision
shall apply.

 

2.1          US DoD Specifications

 

MIL-PRF-23699

 

Lubricating Oil, Aircraft Turbine Engines, Synthetic Base, Class STD

 

 

 

MIL-L-7808

 

Lubricating Oil, Aircraft Turbine Engines, Synthetic Base, Type 1

 

2.2          American Society of Testing and Materials.

 

The following documents are available from American Society for Testing and
Materials, Customer Service, 100 Barr Harbor Drive, West Conshohocken, PA
19428-2959:

 

ASTM D2532

 

Low Temperature Viscosity

 

 

 

ASTM D97

 

Pour Point

 

 

 

ASTM D445

 

Kinetic Viscosity

 

1

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MID-TD-0000-6

GE Energy

May 2004

 

 

3.0          Requirements

 

The lubricating oil shall conform to the requirements of MIL- PRF -23699,
however, exceptions to the following requirements will be considered:

 

·                  Low temperature Viscosity when tested per ASTM D2532.

 

·                  Pour Point when tested per ASTM D97.

 

·                  Viscosity at 40°C and 100°C when tested per ASTM D445

 

·                  Base Stock Composition

 

The specific variations to MIL-PRF-23699 shall be provided by the oil supplier,
along with performance difference impacts, for review by GE.

 

3.1          Material Compatibility

 

The lubricating oil shall be compatible with the same elastomer seal and
metallic materials as the MIL-PRF-23699 compliant lubricating oils are.

 

The lubricating oil shall be mixable with MIL-PRF-23699 or MIL-L-7808 compliant
oil in a ratio of up to 5% of either oil, without adversely affecting the
property integrity of the majority, or operating, oil. Mixing of oils is not
intended, but will result due to engine location changes.

 

4.0          Qualification

 

Lubricating oil shall be considered qualified and acceptable for use in GE
Aircraft Derivative gas turbines demonstrating conformance to the requirements
and after being listed in paragraph 4.4. The qualification program shall be
carried out by the oil supplier in conjunction with a sponsoring gas turbine
owner/operator. GE’s participation will be limited to technical consultation,
review and final approval only.

 

4.1          Performance Tests

 

The oil supplier shall conduct tests in accordance with the requirements of
MIL-PRF-23699 and compare the results with the requirements stated therein. All
results, and specifically the variations to MIL-PRF-23699 requirements, shall be
reviewed with GE prior to initiation of Service Evaluation Testing.
Specifically, the material presented for review shall include, as minimum, the
following:

 

·                  Physical/Chemical Properties and variations to MIL-PRF-23699

 

·                  Expected impact to operating systems due to Property
variations

 

·                  Material Compatibility Lists & Test results

 

·                  Oil Coking Test Results

 

2

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GE Energy

MID-TD-0000-6

 

October 2007

 

4.2          Service Evaluation Tests

 

The oil shall undergo service evaluation testing in a LM Series gas turbine
application(s). The sponsoring operator will accept total responsibility for all
results related to operating with the candidate lubricating oil. The service
evaluation engine shall have a known hardware condition baseline, based on depot
inspection or new delivery, immediately prior to the service evaluation test.

 

Service evaluation testing shall be conducted on a minimum of three LM series
gas turbines, each accumulating at least 8,000 operating hours, at a baseload
operating site, prior to inspection. During operation, periodic oil samples
shall be tested and trended for physical and chemical property changes.
Inspection shall be performed at an authorized depot, and shall be in accordance
with the applicable repair manual.

 

Inspection shall be focused on the oil wetted parts, including the bearings,
gears, elastomer seals, sump oil seals, actuators, and lube/hydraulic pumps. GE
will be permitted to witness any of the inspections, at the discretion of GE.

 

4.3          Qualification Report

 

The oil supplier, and/or operator, shall prepare and submit a Final
Qualification Report to GE. The report shall include, as a minimum, the
following:

 

·                  Oil Brand Description including the complete formulation

 

·                  Certified physical, chemical and performance test results

 

·                  Material Safety Data Sheets

 

·                  Service evaluation test history including all significant
operational and maintenance events

 

·                  Service evaluation oil sample trending results

 

·                  Final depot engine inspection results

 

Upon final review and approval of the Final Qualification Report by GE, the
candidate oil will be included on the approved oils list.

 

Formulation changes affecting any approved performance characteristics must be
reviewed with GE for impact on qualification results.

 

4.4          Approved Lubricating Oils

 

In addition to the oils listed on QPL-23699 (Class STD) and QPL-7808, (Qualified
Products List), the following lubricating oils are approved for use in GE Aero
Derivative gas turbines and gas generators:

 

1.             None at this time.

 

3

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GE Energy

MID-TD-0000-3

 

June 2004

 

Requirements for Water and Steam Purity for

Injection in Aero Derivative Gas Turbines

 

1.1                              Scope

 

This document establishes the purity requirements for water for NOx suppression
and SPRINT® injection into gas turbine engines and for Steam for injected into
the gas turbine whether for NOx suppression or power augmentation.

 

1.2                              Definitions

 

For the purpose of this specification, the following definitions shall apply:

 

NOx Suppression Water - Water introduced into the engine combustor for the
purpose of suppressing the oxides of nitrogen (NOx) in the engine exhaust gases.

 

SPRINT® Water – Water introduced into the engine inlet or into the high pressure
compressor inlet for purpose of power enhancement.

 

2.                                     Applicable Documents

 

2.1                              American Society of Testing and Materials
Publications.

 

ASTM D512

 

Standard Test Method for Chloride Ion in Water

 

 

 

ASTM D516

 

Standard Test Method for Sulfate Ion in Water

 

 

 

ASTM D859

 

Standard Test Method for Silica in Water

 

 

 

ASTM D1066

 

Standard Practice for Sampling Steam

 

 

 

ASTM D1125

 

Standard Test Method for Electrical Conductivity and Resistivity of Water

 

 

 

ASTM D3370

 

Standard Practices for Sampling Water from closed Conduits

 

 

 

ASTM D4191

 

Standard Test Method for Sodium in Water by Atomic Absorbtion Spectography

 

 

 

ASTM D4192

 

Standard Test Method for Potassium in Water by Atomic Absorbtion Spectography

 

 

 

ASTM D5907

 

Standard Test Method for Filterable and Non-Filterable Matter in Water

 

 

 

ASTM D5464

 

Standard Test Method for pH of Water with Low Conductivity

 

1

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MID-TD-0000-4

GE Energy

June 2004

 

 

2.2                              Environmental Protection Agency (EPA) Test
Methods

 

EPA 160.3

 

Residue, Non-Filterable and Total Suspended Solids

 

 

 

EPA 150.1

 

pH Electrometric

 

 

 

EPA 120.1

 

Conductance, Specific Conductance at 25°C

 

 

 

EPA 200.7

 

Metals & Trace Elements

 

 

 

EPA 325.3

 

Chloride, Titrimetric Mercuric Nitrate

 

 

 

EPA 375.4

 

Sulfate, Turbidimetric

 

3.                                     Water Requirements

 

3.1                              Water Sampling Requirements

 

The sampling shall be in accordance with ASTM D3370. A minimum of one (1) gallon
or four (4) liters shall be supplied.

 

3.2                              Water Purity Requirements

 

The water shall meet the following requirements when tested in accordance with
the designated test method:

 

 

 

Limit

 

Test Method

Total Suspended Solids and Total
 Dissolved Solids, mg/L, max

 

5

 

ASTM D5907 or
EPA 160.3

pH

 

6.0 - 8.0

 

ASTM D5464 or
EPA 150.1

Conductivity, µS/cm at 25°C

 

<1.0

 

ASTM D1125 or
EPA 120.1

Sodium + potassium, ppm, max

 

See 3.3

 

ASTM D4191 and D4192 or
EPA 200.7

Silica (SiO2), mg/L, max.

 

0.1

 

ASTM D859 or
EPA 200.7

Chlorides, mg/L, max

 

0.5

 

ASTM D512 or
EPA 325.3

Sulfates, mg/L, max

 

0.5

 

ASTM D516 or
EPA 375.4

 

2

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GE Energy

MID-TD-0000-3

 

June 2004

 

3.3          Sodium & Potassium Limits in Water or Steam

 

The maximum amount of NA + K allowed in the water or steam injected into the
engine depends upon the total NA + K contamination from all sources; i.e., from
the fuel, air, water and steam. The maximum Na + K allowed is determined from
the equation:

 

(ppmFuel) + (ppmAir)*A/F + (ppmWater)*W/F + (ppmSteam)*S/F = 0.2 ppm

 

Where:

 

 

 

 

 

ppmFuel

=

Parts per million Na + K in fuel

 

 

 

ppmAir

=

Parts per million Na + K in Air

 

 

 

ppmWater

=

Parts per million Na + K in water

 

 

 

ppmSteam

=

Parts per million Na + K in steam

 

 

 

A/F

=

Air/Fuel Ratio (Wt. Basis)

 

 

 

W/F

=

Water/Fuel Ratio (Wt. Basis)

 

 

 

S/F

=

Steam/Fuel Ratio (Wt. Basis)

 

3.4          Water Filtration Requirements

 

The water shall contain no particles larger than 20 microns absolute.

 

3

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MID-TD-0000-4

GE Energy

June 2004

 

 

4.0          Steam Requirements

 

4.1          Steam Purity

 

The Steam shall meet the following requirements when tested in accordance with
the designated test method:

 

·                  Sodium + Potassium (Na +K) – See paragraph 3.3

 

·                  Total Conductivity (Cation + Anion)

 

Normal:                                  <1.5 µS/cm (95% of operation time)

Abnormal:                             < 2.0 µS/cm (5% of operating time)

 

·                  Total Solids

 

The maximum total solids depends on the steam/fuel weight ratios at which the
gas turbine is to operate in the specific application. The value is determined
form the following figure. Contaminant size shall not exceed 250 microns. With
the exception of silica, there is no differentiation between types of solids as
long as other limitations of this section are met. Silica in the steam is
limited to 20 ppb.

 

[g256131kg17i001.jpg]

 

4.2          Steam Sampling

 

Steam samples should be taken in accordance with ASTM D1066.

 

4

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Attachment 2 - Schedule Options

 

60

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Schedule of Options

 

This schedule of options is designed to describe only those options that have
either been quoted separately to the Buyer or have not yet been elected by the
Buyer as of the Effective Date of this Contract.  The Buyer shall have the right
to select the below options in accordance with the provisions set forth below.
If elected, the Parties shall execute a Change Order and the price for these
options shall be added to the Contract Price set forth in Article 3 of the
Contract.

 

Proposal
Reference

 

Description

 

Addition to
Contract Price
US Dollars

 

Deadline for Exercise
Of Option

 

 

 

 

 

 

 

Lineside Cubicle Entry

 

Top Bus Duct Entry

 

$0

 

On or before either the
Order Definition Meeting or
October 15, 2008

 

 

 

 

 

 

 

Lineside Cubicle Entry

 

Top Cable Entry

 

$0

 

On or before either the
Order Definition Meeting or
October 15, 2008

 

 

 

 

 

 

 

Attachment 1

 

Optional Gas Turbine Generator Set

 

$18,082,000

 

On or before January 31, 2009

 

 

 

 

 

 

 

Section 14.1

 

6-month Passive Warranty Extension

 

$90,000 / Unit

 

On or before either the
Order Definition Meeting or
October 15, 2008

 

Optional Lineside Cubicle Entry Configuration

 

Top Bus Duct Entry

 

The standard lineside cubicle is configured for bottom cable entry.  With this
option, the lineside cubicle is configured for top bus duct entry.

 

Top Cable Entry

 

The standard lineside cubicle is configured for bottom cable entry.  With this
option, the lineside cubicle is configured for top cable entry.

 

Optional Gas Turbine Generator Set

 

The Buyer shall have a one-time option to purchase One (1) additional Unit at
the pricing provided for in the above table.  This option, if executed in
accordance with these provisions, is subject to prior sale.  The Buyer may elect
to exercise this option at the Buyer’s sole discretion, provided that the Buyer
executes a Change Order on or before January 31, 2009.  The purchase of an
additional Unit pursuant to the exercise of such option will be subject to the
terms and

 

61

--------------------------------------------------------------------------------

 

conditions of this Contract, except as otherwise provided herein, and shall be
done in accordance with the Change Order provisions of this Contract.  The
Scheduled Delivery Date for the optional Unit will be within the timeframe of
July 1, 2010 and September 30, 2010 and will be at Seller’s discretion. 
Provided that the Scheduled Delivery Date for the optional Unit is set no later
than September 30, 2010, then the Contract Price of such Unit will be as set
forth above.

 

6-Month Passive Warranty Extension

 

Seller has an option to extend the 30-month duration in Section 14.1 (iii) to
36-months by executing a Change Order in accordance with the provisions of this
Contract for the price in the above table.

 

62

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Attachment 3 - Lien Waiver Form

 

63

--------------------------------------------------------------------------------

 

Waiver of Lien

 

The undersigned, GE Packaged Power, Inc. (Seller), for and in consideration of
payments for work performed and materials furnished to
                                     (Buyer), pursuant to the Contract between
the Seller and the Buyer dated                             , hereby waives and
releases any and all liens and claims or right to liens on the assets of the
Buyer, including, but not limited to the work performed and the materials
furnished pursuant to the Contract, provided that Buyer remits payment for the
following outstanding invoices:

 

All bills or accounts for labor, material and services furnished in performance
with the Contract will be paid by Seller to its Suppliers in accordance with the
contractual terms of the agreements between the relevant Suppliers and Seller
and Seller shall indemnify Buyer against any such failure of Seller to pay its
debts to Suppliers when due.

 

Dated this                    day of
                                                            200  .

 

 

 

Seller

 

 

 

 

 

(GE Packaged Power, Inc.)

 

 

 

 

 

(Signature of Officer)

 

 

 

 

 

(Printed Name Of Officer)

 

64

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Attachment 4 - Scheduled Delivery Date(s)

 

65

--------------------------------------------------------------------------------

 

Unit Number

 

Equipment Description

 

Scheduled Delivery Date

 

 

 

 

 

Unit #1

 

LM6000 Gas Turbine Generator (GTG) Package

 

18 September 2009

 

 

 

 

 

Unit #2

 

LM6000 Gas Turbine Generator (GTG) Package

 

23 October 2009

 

 

 

 

 

Unit #3

 

LM6000 Gas Turbine Generator (GTG) Package

 

27 November 2009

 

66

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Attachment 5 - Test Procedures and Protocol

 

67

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GE Energy

 

SPECIFICATION FOR GAS TURBINE GENERATOR PERFORMANCE TEST MEASUREMENT (SGTGPTM) -
LM6000PD SPRINT

 

I.                                        INTRODUCTION

 

An Owner’s acceptance of a gas turbine power generation facility is usually
preceded by proof of compliance with specific performance requirements for the
gas turbine generator set(s).  GE Energy provided a performance guarantee of
Gross Power Output and Gross Heat Rate that is passed through to the Owner.

 

If the Customer plans to use the results of the field test as a basis to
determine the fulfillment of contractual requirements, a manufacturer’s
representative will provide the following field services:

 

·                  Supervise collection of data by owners, operators, engineers
or other qualified parties for the gas turbine generator set.

·                  Validate calibration of pertinent instruments.

·                  Reduce the recorded data in accordance with the manufacturing
site performance data correction procedure.

·                  Issue a field performance test report.

 

II.                                    SCOPE AND PURPOSE

 

The primary purpose of this test shall be to demonstrate the guaranteed
generator electrical output and heat rate for GE Aeroderivative Gas Turbine
Generator (GTG).  The guarantee power level will be achieved without exceeding
specified engine control limits: High-pressure rotor speed, high-pressure
compressor discharge pressure and temperature, and low-pressure turbine inlet
temperature.  In addition the guarantee power and heat rate will be achieved
while ensuring that the GTG is not running with any vibration alarms present.

 

Other tests, such as emissions and noise, are typically identified by the
permitting regulatory agency and, therefore, not covered in this document.

 

The scopes of responsibilities, for all parties involved in the performance
test, are as follows:

 

·                  One GE ENERGY Test Engineer who is responsible for
supervising all aspects of the test.

·                  GE ENERGY and Customer representatives will be responsible
for recording the data that is being collected.

·                  The GE ENERGY test engineer performs the computations of the
test results.

·                  Personnel are to be provided by Customer to assist in logging
manual data or collecting fuel samples.

·                  One operator representing the Customer will be responsible
for operating the unit. The operator maybe assisted by GE ENERGY Controls
Technician.

·                  A compressor cleaning crew will be utilized for an offline
compressor water wash. This

 

1

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GE Energy

 

procedure is to be conducted no more than three days prior to the performance
test.

·                  In addition to the above, CUSTOMER, independent engineers,
and GE ENERGY may have observers on the site during the test.

 

III.                                TEST PROCEDURE

 

GE Energy testing procedures are in general compliance with ASME PTC 22-1997. 
Comments to ASME PTC 22-1997 are available for review.

 

A.                                  Test Setup

 

The customer will make every effort to insure the test takes place before 200
fired hours have elapsed on each gas turbine engine. Furthermore, the GTG must
operate at steady base load and in new and clean condition for 24 cumulative
hours prior to commencing the test.  GE Energy representatives shall determine,
in their sole discretion, whether the GTG meets these criteria.

 

If more than 200 fired hours have elapsed before the test, GE Energy shall have
the right to inspect the turbine to determine the condition of the unit. If, at
GE Energy’s sole discretion, the subject unit is not in new and clean condition,
appropriate action shall be taken to put the unit in new and clean condition.
After 200 fired hours, degradation factors, for gross power and gross heat rate,
may be applied.

 

B.                                    Preparation

 

An off-line water wash is to be conducted on the unit, no more than 3-days prior
to the scheduled performance test of initial unit.

 

Test instruments used for determinations shall be calibrated in accordance to
the National Institute of Standards and Technology. GE Energy will provide
calibration certificates for instruments brought to site for the performance
test. GE Energy on package instrumentation providing signals to the unit’s
Turbine Control Panel will be checked and properly adjusted prior to testing. 
NOTE:  Additional details of the instrument requirements are provided in Table 1
–Accuracy of Required Instruments at the end of this document.

 

C.                                    Conduct of the Test

 

1.              Definition of Test Boundary

 

The test boundary establishes the equipment to be included in the test. All
input and output energy streams must be determined with reference to the point
at which they cross the test boundary.

 

The test boundary for this test includes the Gas Turbine Generator and Control
Limits.

 

2

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g

GE Energy

 

2.             Determination of GTG Steady State Condition

 

Test data will be recorded only when the GTG is operating at a steady state base
load condition as defined by the following parameters:

 

·

Compressor Inlet Temperature, T2

±4.0°F

·

Barometric Pressure

±0.5%

·

POWER OUTPUT

±2.0%

 

3.             Test Duration and Number of Data Sets

 

One test point will be conducted over a (50) fifty-minute period.  A test point
is defined as six complete sets of instrument readings recorded at
(10) ten-minute intervals.

 

4.             Data Collection Methodology

 

Data collection methodology will be as follows:

 

·                  One GE ENERGY Test Engineer who is responsible for
supervising all aspects of the test.

·                  GE ENERGY and Customer representatives will be responsible
for recording the data that is being collected.

·                  Personnel are to be provided by Customer to assist in logging
manual data or collecting fuel samples.

·                  One operator, representing Customer, will be responsible for
operating the unit. The operator maybe assisted by GE ENERGY Controls Technician

·                  Manually collected data:  Designated personnel provided by
both GE ENERGY and Customer will collect all test data manually.

·                  Automated data collection:  Aside from printed HMI screens,
there is no other automated data collection associated with this test.

·                  Data sampling frequency: A complete data set will be
collected once every ten (10) minutes.

 

The Customer and GE Energy representative will sign all data sheets at the
completion of the test. The Customer will be provided with copies of all data
sheets.  GE Energy will retain the originals for use in preparing the official
test report.

 

5.             Gas Fuel Analysis and Sampling

 

The owner will arrange for sampling and analysis of fuel.  Analysis of fuel
shall give composition of the natural gas in mole %, HHV, LHV (per ASTM D-1945),
and specific gravity (per ASTM D-3588).  See Appendix IV for analysis methods.

 

Three (3) fuel samples are to be collected during the performance test. First
sample at the beginning of the test, second sample approximately 25 minutes into
the test, and the third sample at the conclusion of the test.  Sample bottles
are to be marked with the time, data, unit/sample number, and fuel temperature
at time of test.

 

3

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GE Energy

 

Two (2) of the three (3) samples are to be sealed, labeled and sent off for
analysis by GE Energy.  The third sample is to be held at the site until such
time as the results of the analyzed samples are reviewed and deemed acceptable
by GE Energy and Customer.

 

IV.                                INSTRUMENTS REQUIRED

 

Table 1 gives a general list of the test equipment, recommended accuracies, and
parties responsible for supplying such equipment to conduct the performance
test. GE will also provide the following equipment to supplement any equipment
not supplied by the customer:  power meter, barometer, psychrometer, inlet
plenum manometer, and exhaust duct manometer.

 

A.                                  Generator Power Output

 

Generator output shall be measured by a precision 3-phase wattmeter.

 

GE Energy furnished current transformers are certified to ±0.3% accuracy.  A
total kW monitoring system uncertainty of ±0.5% is attainable with this
calibrated system.

 

B.                                    Fuel Heat Input - Gaseous Fuels

 

The GTG package does not include a fuel meter.  Fuel flow is measured via flow
metering valves.  The accuracy of the flow metering valves will not meet the
required specification for performance test fuel measurement.  Therefore the
owner will need to provide a fuel-measuring device, which will have an accuracy
of ±0.8% or better.

 

Pressure at the fuel gas meter is to be measured with a pressure transducer
having ±0.25% accuracy.  Temperature at the fuel gas meter is to be measured an
accuracy of ±1°F.  Flow is to be converted from Actual line conditions to
Standard conditions. Compressibility of the fuel will be determined using the
performance test fuel analysis.

 

C.                                    Engine Inlet Air Conditions

 

Ambient Dry, and Wet Bulb are to be measured with a psychrometer shielded from
direct sunlight. Relative Humidity is to be determined using a psychometric
chart.

 

Compressor Inlet Temperature (T2) will be measured using the two RTDs located at
the inlet of the compressor. Expected uncertainty relative to true mean engine
inlet temperature is ±1.0 F.

 

Barometric pressure at the test site shall be measured with a barometer accurate
to ±0.01 inches of mercury.

 

The engine inlet air relative humidity will be equivalent to the ambient
relative humidity.  If the inlet air to the unit is evaporative cooled, the
engine inlet humidity shall

 

4

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g

GE Energy

 

then be determined using the ambient dry and wet bulb temperatures, the
compressor inlet temperature and a psychometric chart. A total accuracy of
±0.001-inlet water/air ratio is expected.

 

Engine inlet pressure loss shall be measured with a slack tube manometer with
one line installed on the calibration valve of the P0 pressure transmitter and
the other open to atmosphere.  A total accuracy of ±0.25 inches of water is
assumed.  Alternately, inlet pressure loss may be calculated by taking the
difference of barometric pressure and the P0 value.

 

D.                                   Engine Exhaust Static Pressure

 

For exhaust loss measurement a slack tube manometer will be utilized if a
connection port is made available.  The customer is responsible for supplying a
¼” test port connection for exhaust loss measurement.  GE does not provide test
ports between the turbine exhaust and exhaust stack, SCR, or boiler.

 

Engine exhaust static pressure shall be measured at the discharge of the engine
exhaust collector upstream of any heat recovery, catalytic converter or sound
attenuation equipment. A total accuracy of ±0.25 inches of water is assumed

 

Typically the measurements taken between the exhaust duct and stack will
fluctuate greatly due to the short length of duct and turbulent flow.  Due to
the fluctuating reading, an accurate exhaust loss reading may not be
achievable.  Should this be the case, the design value for exhaust loss will be
used.

 

V.                                   ENGINE LIMIT ASSESSMENT

 

The following Unit Control Limit Parameters are to be recorded during the
performance test for engine limit assessment:

 

·                  High Pressure Rotor speed, XN25

·                  Compressor Discharge Pressure, PS3

·                  Compressor Discharge Temperature, T3

·                  Low Pressure Turbine Inlet Temperature, T48

 

VI.                               TEST EXECUTION

 

The GE ENERGY Performance Engineer has the overall responsibility for starting
and stopping test, for directing plant operation and the test personnel, and for
all other aspects of the test execution. However, the test director may not
deviate from the test plan without prior mutual agreement by all parties to the
test.

 

5

--------------------------------------------------------------------------------

 

g

GE Energy

 

A.                             Unit Operating Conditions

 

1.             Permissible Mode of Unit Control:

 

All Unit components will be operating within the respective manufacturer’s
specified continuous operating limits at base load. Test data will be recorded
only when GTG is at base load and at a control limit (T3, PS3, and/or T48), and
all test instrumentation are functioning satisfactory and in steady state
condition for at lease 30 minutes prior to testing.  Please Note: If unit is in
XNSD control, MW Limit Control, and/or Maximum or Minimum Fuel Control, then the
performance test will not be conducted.

 

2.             Operating Status of GTG Package Auxiliary Loads:

 

The test should be conducted with normal auxiliary package service loads in
operation. All GTG Package Auxiliary and BOP equipment loads are to be excluded
from the test.

 

3.             Emissions:

 

Combustion Mapping must be completed prior to the performance test to insure the
GTG meets the guarantee emission requirements.  The performance test will not be
conducted if emissions are in excess of the guaranteed limits.

 

B.                             Permissible Variable Deviations During Test Runs

 

1.             Typical Performance Test Restart Situation:

 

Any deviation outside of the following limits will require at restart of the
performance test from that point forward until a complete 50-minute test has
been completed and the permissible variable deviations are with in the limits
listed.

 

·

Compressor Inlet Temperature

±4.0°F

·

Barometric Pressure

±0.5%

·

POWER OUTPUT

±2.0%

 

2.              Typical Performance Test Abort Situation:

 

·                  SPRINT must be online for the performance test, if SPRINT
flow goes offline during the performance test, then the test will be aborted.

·                  The unit must be at base load with all systems operating
(Inlet Heater if required, Inlet Chiller if applicable, gas compressors if
required, etc…). If any of these systems go offline during the performance test,
the test will be aborted.

·                  If the unit trips offline for any reason, then the test will
be aborted.

·                  Unit goes into Maximum or Minimum Fuel Control.

 

The performance test will be restarted as soon as the problem leading up to the
abort situation is rectified.

 

6

--------------------------------------------------------------------------------

 

g

GE Energy

 

VII.                           EVALUATION OF TEST RESULTS

 

The Gas Turbine Generators are designed and guaranteed to produce a certain
output with a certain heat rate for a given set of ambient and operating
conditions. As the ambient conditions deviate from the design values, the actual
performance of the GTG changes. The ambient conditions at the time of testing
are likely to be different from the values stated in the basis of guarantee. To
account for these deviations from design ambient conditions, site-specific
correction will be applied to the raw data to derive equivalent design condition
results.

 

A.                                  Methodology for Data Reduction

 

Procedure to be used in the calculation of corrected results:

 

Where,

 

Gross Corrected Power  = Measured Power at GT Generator Terminals Corrected for
the Parameters Listed Appendix II, Section A

 

Gross Corrected Heat Rate = Calculated Heat Rate Corrected for the Parameters
Listed Appendix II, Section A

 

B.                                    Method and criteria for evaluation of test
results with regard to guaranteed performance

 

GE ENERGY will evaluate test data once test fuel analyses are received.  Test
data correction is performed in accordance with this document along with site
specific correction curves.

 

When compliance decisions are required based on the test, the parties involved
must recognize the total tolerance due to measurement uncertainties associated
with each particular test result.

 

Each measured test parameter’s tolerance is defined as twice the estimated
standard deviation (2 sigma).  The uncertainty in the compliance parameter
resulting from this tolerance is calculated for each measured test parameter. 
These uncertainties are then combined by root-sum-square analysis to obtain the
total uncertainty for that compliance parameter.  Table 2 illustrates typical
uncertainty calculations. The unit will be considered acceptable when the
corrected test results are equal or better than the guaranteed value with
allowance for test uncertainty.

 

A full test report will be issued to the customer two weeks after the fuel
analysis has been received.

 

7

--------------------------------------------------------------------------------

 

g

GE Energy

 

TABLE 1: ACCURACY OF REQUIRED INSTRUMENTS

 

Instruments

 

Customer

 

GE ENERGY

 

Recommended

 

 

 

 

 

 

 

 

 

Dry Engine Operation

 

 

 

 

 

 

 

Recording wattmeter

 

X

 

 

 

+0.5%

 

Potential transformers

 

X

 

 

 

+0.3%

 

Current transformers

 

 

 

X

 

+0.3%

 

GT thermocouple system

 

 

 

X

 

+3.0°F

 

Primary fuel gas meter

 

X

 

 

 

+0.8%

 

Fuel gas sampling device

 

X

 

 

 

Lab

 

Fuel gas pressure sensor

 

X

 

 

 

+0.25%

 

Fuel gas temperature sensor

 

X

 

 

 

+1.0°F

 

Engine inlet temperature (2)

 

 

 

X

 

+1.°F

 

Ambient air thermocouples

 

X

 

 

 

+1.°F

 

Barometer

 

X

 

 

 

+0.015 in Hg.

 

Ambient air psychrometer

 

X

 

 

 

+1.°F

 

Inlet plenum manometer

 

X

 

 

 

+0.25in. H2O

 

Exhaust duct manometers

 

X

 

 

 

+0.25in. H2O

 

 

8

--------------------------------------------------------------------------------

 

g

GE Energy

 

TABLE 2: INSTRUMENT UNCERTAINTY

 

VARIABLE

 

UNITS

 

UNC

 

Ni

 

RSC

 

Fi²

 

RSS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

POWER AT TEST

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

WATT-HOUR METER

 

%

 

0.5

 

1

 

1

 

0.2500

 

 

 

PTs

 

%

 

0.3

 

3

 

1

 

0.0300

 

 

 

CTs

 

%

 

0.3

 

3

 

1

 

0.0300

 

 

 

MEASURED POWER UNC

 

 

 

 

 

 

 

 

 

0.3100

 

0.5568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CORRECTED POWER

 

 

 

 

 

 

 

 

 

 

 

 

 

MEASURED POWER

 

 

 

 

 

 

 

 

 

0.3100

 

 

 

COMP INLET TEMP

 

°F

 

1

 

2

 

0.303

 

0.0459

 

 

 

BAROMETER

 

PSIA

 

0.007

 

1

 

0.043

 

0.0000

 

 

 

INLET LOSS

 

inH20

 

0.25

 

1

 

0.086

 

0.0005

 

 

 

EXHAUST LOSS

 

inH20

 

0.25

 

1

 

0.025

 

0.0000

 

 

 

SPEC. HUMIDITY

 

lb/lb

 

0.001

 

1

 

0.092

 

0.0000

 

 

 

CONTROL TEMP

 

°F

 

2.00

 

8

 

0.237

 

0.0281

 

 

 

CORRECTED POWER UNC

 

 

 

 

 

 

 

 

 

0.3845

 

0.6201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HEAT RATE (GAS FUEL)

 

 

 

 

 

 

 

 

 

 

 

 

 

AT TEST CONDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

FLOW METER

 

%

 

0.50

 

1

 

1

 

0.2500

 

 

 

FUEL TEMP

 

%

 

0.20

 

1

 

1

 

0.0400

 

 

 

FUEL PRESSURE

 

%

 

0.25

 

1

 

1

 

0.0625

 

 

 

FUEL ANALYSIS

 

%

 

0.50

 

1

 

1

 

0.2500

 

 

 

MEASURED POWER

 

%

 

 

 

 

 

 

 

0.3100

 

 

 

MEASURED HEAT RATE UNC

 

 

 

 

 

 

 

 

 

0.9125

 

0.9552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CORRECT HEAT RATE

 

 

 

 

 

 

 

 

 

 

 

 

 

MEASURED HEAT RATE

 

 

 

 

 

 

 

 

 

0.9125

 

 

 

COMP INLET TEMP

 

°F

 

1

 

2

 

0.055

 

0.0015

 

 

 

BAROMETER

 

PSIA

 

0.007

 

1

 

0.006

 

0.0000

 

 

 

INLET LOSS

 

inH20

 

0.25

 

1

 

0.027

 

0.0000

 

 

 

EXHAUST LOSS

 

inH20

 

0.25

 

1

 

0.021

 

0.00

 

 

 

SPEC. HUMIDITY

 

lb/lb

 

0.001

 

1

 

0.050

 

0.0000

 

 

 

CORRECT HEAT RATE UNC

 

 

 

 

 

 

 

 

 

0.9141

 

0.9561

 

 

Legend - UNC = measurement uncertainty; Ni = number of instruments; RSCi =
sensitivity coefficient;

Fi = (RSCi * UNCi/sqrtNi)^2; RSS = Root sum square

 

9

--------------------------------------------------------------------------------

 

Attachment 6 - Stamped Guarantee Sheet

 

68

--------------------------------------------------------------------------------

 

[g256131kg23i001.jpg]

 

GE ENERGY

 

GUARANTEE
PROJECT: BPZ CALETA CRUZ POWER PLANT
LOCATION: PERU

 

KW AT GEN TERMS

47925

 

EMISSIONS ARE VALID FOR T2 WITHIN 20F-100F

BTU/KW-HR, LHV

  8355

 

AND A GTG LOAD DOWN TO 75%

(KJ/KW-HR, LHV)

  8815

 

NOX:

 

25 PPMVD AT 15% O2

 

 

 

 

 

(51 mg/Nm3)

 

[g256131kg23i002.jpg]

 

CO:

 

25 PPMVD AT 15% O2

(31 mg/Nm3)

 

 

 

VOC:

 

3 PPMVD AT 15% O2

 

Daniele Marcucci

 

 

 

(2 mg/Nm3)

 

Performance Engineer

 

PM10:

 

4 LB/HR

 

Date: 07/24/08

 

 

 

(2 kg/hr)

 

 

 

 

 

 

 

 

 

 

 

 

NOT VALID WITHOUT SIGNATURE

 

 

 

VALID UNTIL 10/22/08

 

BASIS OF GUARANTEE:

 

BASE LOAD, GAS FUEL NOZZLE SYSTEM

 

 

NO BLEED OR EXTRACTED POWER

ENGINE:

 

(1) GE LM6000PD-SPRINT DLE GAS TURBINE

FUEL:

 

21237Btu/lb / (49397 kJ/kg) LHV, GAS FUEL (#900-1883)

FUEL SPEC:

 

MID-TD-0000-1 LATEST REVISION

FUEL TEMP:

 

SITE FUEL TEMPERATURE OF 126.0°F(52.2°C)

 

 

 

GENERATOR:

 

MEID 800LL04

GENERATOR OUTPUT

 

13.8kV, 60 Hz

POWER FACTOR:

 

> 0.9

AMBIENT TEMP:

 

89.8°F / (32.1°C)

AMBIENT RH:

 

60.4%

INLET CONDITIONING:

 

CHILL TO 46.0°F / (7.8°C) AT 95.0% RH

ALTITUDE:

 

120.0ft / (36.6m)

INLET FILTER LOSS:

 

< 5.00 inH2O / (127.0 mmH2O)

EXHAUST LOSS:

 

< 6.00 inH2O / (152.4 mmH2O)

 

 

 

SPRINT WATER FLOW:

 

NOT TO EXCEED 10505 lb/hr

NOX CONTROL:

 

DLE

 

 

 

ENGINE CONDITION:

 

NEW AND CLEAN < 200 SITE FIRED HOURS

FIELD TEST METHODS

 

 

PERFORMANCE:

 

GE ENERGY SGTGPTM

NOX:

 

EPA METHOD 20

CO:

 

EPA METHOD 10

VOC:

 

EPA METHOD 25A/18

PM10:

 

EPA METHOD 5 / 202

 

BASIS OF GUARANTEE IS NOT FOR DESIGN, REFER TO PROJECT DRAWINGS FOR DESIGN
REQUIREMENTS. SI VALUES ARE FOR REFERENCE PURPOSES ONLY.

 

THIS GUARANTEE SUPERSEDES ANY
PREVIOUS GUARANTEES PRESENTED

 

705100-100-CGER-N/A-4

 

1

--------------------------------------------------------------------------------

 

[g256131kg23i001.jpg]

 

GE ENERGY

 

GUARANTEE

PROJECT: BPZ CALETA CRUZ POWER PLANT

LOCATION: PERU

 

 

 

 

NEAR FIELD NOISE:

KW AT GEN TERMS

 

47925

85 DB(A) ARITHMETIC AVERAGE SOUND

BTU/KW-HR, LHV

 

  8355

PRESSURE LEVEL (dB REF 20

(KJ/KW-HR, LHV)

 

  8815

 

[g256131kg23i003.jpg]

 

Daniele Marcucci

Performance Engineer

MICROPASCALS, RMS) OF LOCATIONS AROUND THE PACKAGE (VERTICAL DISTANCE OF 5FT.
(1.5M) ABOVE PACKAGE BASE AT A HORIZONTAL DISTANCE OF 3FT. (1M) FROM THE
EXTERIOR PLANE OF EQUIPMENT AS TESTED IN A FREE-FIELD CONDITION

 

 

Date: 07/24/08

OVER A HARD REFLECTING GROUND

 

 

 

PLANE, OPERATING AT BASE LOAD)

THIS GUARANTEE COINCIDES WITH

 

 

 

THE PREVIOUS GUARANTEE ISSUED

 

 

 

ON 07/24/2008

 

 

 

 

 

 

 

705100-100-CGER-N/A-0

 

 

 

 

 

 

 

NOT VALID WITHOUT SIGNATURE

 

 

VALID UNTIL 10/22/08

 

BASIS OF GUARANTEE:

 

BASE LOAD, GAS FUEL NOZZLE SYSTEM

 

 

NO BLEED OR EXTRACTED POWER

ENGINE:

 

(1) GE LM6000PD-SPRINT DLE GAS TURBINE

FUEL:

 

21237Btu/lb / (49397 kJ/kg) LHV, GAS FUEL (#900-1883)

FUEL SPEC:

 

MID-TD-0000-1 LATEST REVISION

FUEL TEMP:

 

SITE FUEL TEMPERATURE OF 126.0°F(52.2°C)

 

 

 

GENERATOR:

 

MEID 800LL04

GENERATOR OUTPUT

 

13.8kV, 60 Hz

POWER FACTOR:

 

> 0.9

AMBIENT TEMP:

 

89.8°F / (32.1°C)

AMBIENT RH:

 

60.4%

INLET CONDITIONING:

 

CHILL TO 46.0°F / (7.8°C) AT 95.0% RH

ALTITUDE:

 

120.0ft / (36.6m)

INLET FILTER LOSS:

 

< 5.00 inH2O / (127.0 mmH2O)

EXHAUST LOSS:

 

< 6.00 inH2O / (152.4 mmH2O)

 

 

 

SPRINT WATER FLOW:

 

NOT TO EXCEED 10505 lb/hr

NOX CONTROL:

 

DLE

 

 

 

ENGINE CONDITION:

 

NEW AND CLEAN < 200 SITE FIRED HOURS

FIELD TEST METHODS

 

 

NEAR FIELD NOISE:

 

GE ACOUSTIC TESTING PROCEDURE AND ASME PTC-36-2004

 

BASIS OF GUARANTEE IS NOT FOR DESIGN, REFER TO PROJECT DRAWINGS FOR DESIGN
REQUIREMENTS. SI VALUES ARE FOR REFERENCE PURPOSES ONLY.

 

THIS GUARANTEE SUPERSEDES ANY
PREVIOUS GUARANTEES PRESENTED

 

705100-100-CGER-N/A-4

 

2

--------------------------------------------------------------------------------

 

Estimated Average Engine Performance NOT FOR GUARANTEE, REFER TO PROJECT F&ID
FOR DESIGN

 

[g256131kg23i001.jpg]

 

GE Energy

 

Performance By:

 

Daniele Marcucci

 

Project Info:

 

BPZ Caleta Cruz Power Plant

 

 

 

 

 

Engine:

 

LM6000 PD-SPRINT

 

Deck Info:

 

G0125O - 8g8.scp

Date:

 

07/24/2008

Generator:

 

MEID 800LL04 60Hz, 13.8kV, 0.9PF (14849)

Time:

 

12:54:44 PM

Fuel:

 

Site Gas Fuel#900-1883, 21237 Btu/lb,LHV

Version:

 

3.7.3

 

Case #

 

100

 

 

 

Ambient Conditions

 

 

 

 

 

Dry Bulb, °F

 

89.8

 

 

 

Wet Bulb, °F

 

78.3

 

 

 

RH,%

 

60.4

 

 

 

Altitude, ft

 

120.0

 

 

 

Ambient Pressure, psia

 

14.633

 

 

 

 

 

 

 

 

 

Engine Inlet

 

 

 

 

 

Comp Inlet Temp, °F

 

46.0

 

 

 

RH,%

 

95.0

 

 

 

Conditioning

 

CHILL

 

 

 

Tons or kBtu/hr

 

2128

 

 

 

 

 

 

 

 

 

Pressure Losses

 

 

 

 

 

Inlet Loss, inH20

 

5.00

 

 

 

Volute Loss, inH20

 

4.00

 

 

 

Exhaust Loss, inH20

 

6.00

 

 

 

 

 

 

 

 

 

kW, Gen Terms

 

47925

 

 

 

Est. Btu/kW-hr, LHV

 

8188

 

 

 

Guar. Btu/kW-hr, LHV

 

8355

 

 

 

 

 

 

 

 

 

Fuel Flow

 

 

 

 

 

MMBtu/hr, LHV

 

392.4

 

 

 

lb/hr

 

18477

 

 

 

 

 

 

 

 

 

NOx Control

 

DLE

 

 

 

 

 

 

 

 

 

SPRINT

 

LPC

 

 

 

lb/hr

 

8766

 

 

 

 

 

 

 

 

 

Control Parameters

 

 

 

 

 

HP Speed, RPM

 

10312

 

 

 

LP Speed, RPM

 

3600

 

 

 

PS3 - CDP, psia

 

457.4

 

 

 

T3CRF - CDT, °F

 

943

 

 

 

T48IN, °R

 

2027

 

 

 

T48IN, °F

 

1567

 

 

 

 

 

 

 

 

 

Exhaust Parameters

 

 

 

 

 

Temperature, °F

 

836.7

 

 

 

lb/sec

 

292.8

 

 

 

lb/hr

 

1054088

 

 

 

Energy, Btu/s- Ref 0 °R

 

96723

 

 

 

Energy, Btu/s- Ref T2 °F

 

60019

 

 

 

Cp, Btu/lb-R

 

0.2720

 

 

 

 

 

 

 

 

 

Emissions (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

NOx ppmvd Ref 15% O2

 

25

 

 

 

NOx as NO2, lb/hr

 

39

 

 

 

CO ppmvd Ref 15% O2

 

25

 

 

 

CO, lb/hr

 

24

 

 

 

CO2, lb/hr

 

51015

 

 

 

HC ppmvd Ref 15% O2

 

15

 

 

 

HC, lb/hr

 

8

 

 

 

SOX as SO2, lb/hr

 

0.00

 

 

 

 

--------------------------------------------------------------------------------

 

Estimated Average Engine Performance NOT FOR GUARANTEE, REFER TO PROJECT F&ID
FOR DESIGN

 

[g256131kg23i001.jpg]

 

GE Energy

 

Performance By:

 

Daniele Marcucci

 

 

Project Info:

 

BPZ Caleta Cruz Power Plant

 

 

 

 

 

 

 

Engine:

 

LM6000 PD-SPRINT

 

 

Deck Info:

 

G0125O - 8g8.scp

 

Date:

 

07/24/2008

Generator:

 

MEID 800LL04 60Hz, 13.8kV, 0.9PF (14849)

 

Time:

 

12:54:44 PM

Fuel:

 

Site Gas Fuel#900-1883, 21237 Btu/lb,LHV

 

Version:

 

3.7.3

 

Case #

 

100

 

 

 

 

 

 

 

 

 

Exh Wght% Wet (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

AR

 

1.2465

 

 

 

N2

 

73.0910

 

 

 

O2

 

15.5104

 

 

 

CO2

 

4.8397

 

 

 

H20

 

5.3068

 

 

 

SO2

 

0.0000

 

 

 

CO

 

0.0023

 

 

 

HC

 

0.0008

 

 

 

NOX

 

0.0026

 

 

 

 

 

 

 

 

 

Exh Mole% Dry (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

AR

 

0.9645

 

 

 

N2

 

80.6469

 

 

 

O2

 

14.9830

 

 

 

CO2

 

3.3992

 

 

 

H20

 

0.0000

 

 

 

SO2

 

0.0000

 

 

 

CO

 

0.0025

 

 

 

HC

 

0.0015

 

 

 

NOX

 

0.0025

 

 

 

 

 

 

 

 

 

Exh Mole% Wet (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

AR

 

0.8840

 

 

 

N2

 

73.9165

 

 

 

O2

 

13.7326

 

 

 

CO2

 

3.1155

 

 

 

H20

 

8.3455

 

 

 

SO2

 

0.0000

 

 

 

CO

 

0.0023

 

 

 

HC

 

0.0014

 

 

 

NOX

 

0.0023

 

 

 

 

 

 

900-1883 (BPZ Energy)

 

Aero Energy Fuel Number

 

Volume%

 

Weight %

 

Hydrogen

 

0.0000

 

0.0000

 

Methane

 

97.9000

 

93.6587

 

Ethane

 

0.7800

 

1.3986

 

Ethylene

 

0.0000

 

0.0000

 

Propane

 

0.2500

 

0.6574

 

Propylene

 

0.0000

 

0.0000

 

Butane

 

0.1600

 

0.5546

 

Butylene

 

0.0000

 

0.0000

 

Butadiene

 

0.0000

 

0.0000

 

Pentane

 

0.0500

 

0.2151

 

Cyclopentane

 

0.0000

 

0.0000

 

Hexane

 

0.0300

 

0.1542

 

Heptane

 

0.4100

 

2.4499

 

Carbon Monoxide

 

0.0000

 

0.0000

 

Carbon Dioxide

 

0.2200

 

0.5774

 

Nitrogen

 

0.2000

 

0.3341

 

Water Vapor

 

0.0000

 

0.0000

 

Oxygen

 

0.0000

 

0.0000

 

Hydrogen Sulfide

 

0.0000

 

0.0000

 

Ammonia

 

0.0000

 

0.0000

 

 

 

 

 

 

 

Btu/lb, LHV

 

21237

 

 

 

Btu/scf, LHV

 

941

 

 

 

Btu/scf, HHV

 

1043

 

 

 

Btu/lb, HHV

 

23536

 

 

 

Fuel Temp, °F

 

126.0

 

 

 

NOx Scalar

 

1.038

 

 

 

Specific Gravity

 

0.58

 

 

 

 

 

 

 

 

 

Engine Exhaust

 

 

 

 

 

Exhaust Avg. Mol. Wt., Wet Basis

 

28.3

 

 

 

Exhaust Flow, ACFM

 

580605

 

 

 

Exhaust Flow, SCFM

 

225151

 

 

 

Exhaust Flow, Btu/lb

 

330

 

 

 

Exhaust Flow, Calories/s

 

24374226

 

 

 

 

 

 

 

 

 

Inlet Flow Wet, pps

 

288.9

 

 

 

Inlet Flow Dry, pps

 

287.1

 

 

 

 

 

 

 

 

 

Shaft HP

 

65387

 

 

 

 

--------------------------------------------------------------------------------

 

Estimated Average Engine Performance NOT FOR GUARANTEE, REFER TO PROJECT F&ID
FOR DESIGN

 

[g256131kg23i001.jpg]

 

GE Energy

 

 

Performance By:

 

Daniele Marcucci

 

 

 

 

 

 

 

 

 

Project Info:

 

BPZ Caleta Cruz Power Plant

 

 

 

 

 

 

 

 

 

Engine:

 

LM6000 PD-SPRINT

 

 

 

Deck Info:

 

G0125O - 8g8.scp

Date:

 

07/24/2008

Generator:

 

MEID 800LL04 60Hz, 13.8kV, 0.9PF (14849)

Time:

 

12:55:18 PM

Fuel:

 

Site Gas Fuel#900-1883, 21237 Btu/lb,LHV

Version:

 

3.7.3

 

Case #

 

100

 

 

 

Ambient Conditions

 

32.1

 

 

 

Dry Bulb, °C

 

25.7

 

 

 

Wet Bulb, °C

 

60.4

 

 

 

RH,%

 

36.6

 

 

 

Altitude, m

 

100.888

 

 

 

Ambient Pressure, kPa

 

 

 

 

 

 

 

 

 

 

 

Engine Inlet

 

7.8

 

 

 

Comp Inlet Temp, °C

 

95.0

 

 

 

RH,%

 

CHILL

 

 

 

Conditioning

 

2128

 

 

 

Tons or kBtu/hr

 

 

 

 

 

 

 

 

 

 

 

Pressure Losses

 

127.00

 

 

 

Inlet Loss, mmH2O

 

101.60

 

 

 

Volute Loss, mmH2O

 

152.40

 

 

 

Exhaust Loss, mmH2O

 

 

 

 

 

 

 

47925

 

 

 

kW, Gen Terms

 

8638

 

 

 

Est. kJ/kWh, LHV

 

8815

 

 

 

Guar. kJ/kWh, LHV

 

 

 

 

 

 

 

 

 

 

 

Fuel Flow

 

414.0

 

 

 

GJ/hr, LHV

 

8381

 

 

 

kg/hr

 

 

 

 

 

 

 

DLE

 

 

 

NOx Control

 

 

 

 

 

 

 

LPC

 

 

 

SPRINT

 

3976

 

 

 

kg/hr

 

 

 

 

 

 

 

 

 

 

 

Control Parameters

 

10312

 

 

 

HP Speed, RPM

 

3600

 

 

 

LP Speed, RPM

 

3153.8

 

 

 

PS3 - CDP, kPa

 

506

 

 

 

T3CRF - CDT, °C

 

1126

 

 

 

T48IN, °K

 

853

 

 

 

T48IN, °C

 

 

 

 

 

 

 

 

 

 

 

Exhaust Parameters

 

447.1

 

 

 

Temperature, °C

 

132.8

 

 

 

kg/sec

 

478131

 

 

 

kg/hr

 

102049

 

 

 

Energy, KJ/s- Ref 0 °K

 

63324

 

 

 

Energy, KJ/s- Ref T2 °C

 

1.1386

 

 

 

Kj/kg-R

 

 

 

 

 

 

 

 

 

 

 

Emissions (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

NOx mg/Nm3 Ref 15% O2

 

51

 

 

 

NOx as NO2, kg/hr

 

18

 

 

 

CO mg/Nm3 Ref 15% O2

 

31

 

 

 

CO, kg/hr

 

11

 

 

 

CO2, kg/hr

 

23140

 

 

 

HC mg/Nm3 Ref 15% O2

 

11

 

 

 

HC, kg/hr

 

4

 

 

 

SOX as SO2, kg/hr

 

0.00

 

 

 

 

--------------------------------------------------------------------------------

 

Estimated Average Engine Performance NOT FOR GUARANTEE, REFER TO PROJECT F&ID
FOR DESIGN

 

[g256131kg23i001.jpg]

 

GE Energy

 

 

Performance By:

 

Daniele Marcucci

 

 

 

 

Project Info:

 

BPZ Caleta Cruz Power Plant

 

 

 

 

 

 

 

 

 

 

 

Engine:

 

LM6000 PD-SPRINT

 

 

 

 

Deck Info:

 

G0125O - 8g8.scp

 

Date:

 

07/24/2008

Generator:

 

MEID 800LL04 60Hz, 13.8kV, 0.9PF (14849)

 

Time:

 

12:55:18 PM

Fuel:

 

Site Gas Fuel#900-1883, 21237 Btu/lb,LHV

 

Version:

 

3.7.3

 

Case #

 

100

 

 

 

 

 

 

 

 

 

Exh Wght% Wet (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

AR

 

1.2465

 

 

 

N2

 

73.0910

 

 

 

O2

 

15.5104

 

 

 

CO2

 

4.8397

 

 

 

H20

 

5.3068

 

 

 

SO2

 

0.0000

 

 

 

CO

 

0.0023

 

 

 

HC

 

0.0008

 

 

 

NOX

 

0.0026

 

 

 

 

 

 

 

 

 

Ext. Mole% Dry (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

AR

 

0.9645

 

 

 

N2

 

80.6469

 

 

 

O2

 

14.9830

 

 

 

CO2

 

3.3992

 

 

 

H20

 

0.0000

 

 

 

SO2

 

0.0000

 

 

 

CO

 

0.0025

 

 

 

HC

 

0.0015

 

 

 

NOX

 

0.0025

 

 

 

 

 

 

 

 

 

Ext. Mole% Wet (NOT FOR USE IN ENVIRONMENTAL PERMITS)

 

AR

 

0.8840

 

 

 

N2

 

73.9165

 

 

 

O2

 

13.7326

 

 

 

CO2

 

3.1155

 

 

 

H20

 

8.3455

 

 

 

SO2

 

0.0000

 

 

 

CO

 

0.0023

 

 

 

HC

 

0.0014

 

 

 

NOX

 

0.0023

 

 

 

 

 

 

900-1883 (BPZ Energy)

 

Aero Energy Fuel Number

 

Volume %

 

Weight %

 

Hydrogen

 

0.0000

 

0.0000

 

Methane

 

97.9000

 

93.6587

 

Ethane

 

0.7800

 

1.3986

 

Ethylene

 

0.0000

 

0.0000

 

Propane

 

0.2500

 

0.6574

 

Propylene

 

0.0000

 

0.0000

 

Butane

 

0.1600

 

0.5546

 

Butylene

 

0.0000

 

0.0000

 

Butadiene

 

0.0000

 

0.0000

 

Pentane

 

0.0500

 

0.2151

 

Cyclopentane

 

0.0000

 

0.0000

 

Hexane

 

0.0300

 

0.1542

 

Heptane

 

0.4100

 

2.4499

 

Carbon Monoxide

 

0.0000

 

0.0000

 

Carbon Dioxide

 

0.2200

 

0.5774

 

Nitrogen

 

0.2000

 

0.3341

 

Water Vapor

 

0.0000

 

0.0000

 

Oxygen

 

0.0000

 

0.0000

 

Hydrogen Sulfide

 

0.0000

 

0.0000

 

Ammonia

 

0.0000

 

0.0000

 

kJ/kg, LHV

 

49397

 

 

 

kJ/Nm3, LHV

 

36951

 

 

 

kJ/Nm3, HHV

 

40951

 

 

 

kJ/kg, HHV

 

54744

 

 

 

Fuel Temp, °C

 

52.2

 

 

 

NOx Scalar

 

1.038

 

 

 

Specific Gravity

 

0.58

 

 

 

 

 

 

 

 

 

Engine Exhaust

 

 

 

 

 

Exhaust Avg. Mol. Wt., Wet Basis

 

28.3

 

 

 

Exhaust Flow, ACFM

 

580605

 

 

 

Exhaust Flow, SCFM

 

225151

 

 

 

Exhaust Flow, Btu/lb

 

330

 

 

 

Exhaust Flow, Calories/s

 

24374226

 

 

 

 

 

 

 

 

 

Inlet Flow Wet, kg/sec

 

131.1

 

 

 

Inlet Flow Dry, kg/sec

 

130.2

 

 

 

 

 

 

 

 

 

Shaft HP

 

65387

 

 

 

 

--------------------------------------------------------------------------------

 

[g256131kg23i001.jpg]

 

GE ENERGY

 

Conditions for Near Field Noise Guarantee

 

1.

 

Based on Arithmetic average of sound pressure levels of location around the
package.

 

 

 

2.

 

GTG Auxiliary skids must be placed at or within 6-ft of each other, and within
6-ft of the turbine main unit.

 

 

 

3.

 

If Fin Fan Lube Oil Cooler is to be located broadside to the turbine-generator
main unit, then the locatioin must be a minimum of 25-feet away from the main
unit, measuring nearest edge-to-edge. GE Energy Is to advise best location.

 

 

 

4.

 

If Fin Fan Lube Oil Cooler is to be located behind the generator end of the main
unit, then the location must be a minimum distance of 10-ft behind the generator
end of the package, and off to one side (Measuring nearest edge to edge), to
avoid infringement on the rotor removal area. GE Energy is to advise best
location.

 

 

 

5.

 

Other Ancillary skids must be at least 10-ft away from any fin-fan lube oil
cooler, measuring nearest edge-to-edge.

 

 

 

6.

 

Per unit basis.

 

 

 

7.

 

Baseload operation only.

 

 

 

8.

 

GE Energy GTG packge scope of supply only, no customer supplied equipment is
included.

 

 

 

9.

 

GE Energy GTG packge scope of supply only, GE Energy supplied BOP equipment is
not included.

 

--------------------------------------------------------------------------------

 

[g256131kg23i001.jpg]

 

GE ENERGY

 

Conditions for VOC Emissions Guarantee

 

1.

 

Fuel must meet GE specification MID-TD-000-01.

 

 

 

2.

 

The timing of test to coincide with lowest site ambient VOCs levels.

 

 

 

3.

 

Gas turbine must run for a minimum of 300 total fired hours at base load prior
to testing.

 

 

 

4.

 

Gas turbine inlet and exhaust system must be free of any dirt,sand,mud,rust,oil
or any other contaminates.

 

 

 

5.

 

Re-testing (at purchaser’s expense) must be allowed, if required.

 

 

 

6.

 

GE receives a copy of the final test results.

 

 

 

7.

 

A compressor wash prior to testing is highly recommended.

 

--------------------------------------------------------------------------------

 

[g256131kg23i001.jpg]

 

GE ENERGY

 

Conditions for PM10 Emissions Guarantee

 

1.

 

Fuel must meet GE specification MID-TD-000-01.

 

 

 

2.

 

The timing of test to coincide with lowest site ambient particulate levels.

 

 

 

3.

 

Gas turbine must run for a minimum of 300 total fired hours at base load prior
to testing.

 

 

 

4.

 

Combustion turbine must be run for a minimum of 300 total fired hours prior to
any particulate testing; combustion turbine must be operating a

 

 

 

5.

 

Gas turbine inlet and exhaust system must be free of any dirt,sand,mud,rust,oil
or any other contaminates.

 

 

 

6.

 

Sampling probe internal surfaces must be made of chemically inert and
non-catalytic material such as quartz.

 

 

 

7.

 

The filter material shall be quartz.

 

 

 

8.

 

Probe wash shall be high purity acetone per EPA Method 5.

 

 

 

9.

 

Re-testing (at purchaser’s expense) must be allowed, if required.

 

 

 

10.

 

GE receives a copy of the final test results.

 

 

 

11.

 

A compressor wash prior to testing is highly recommended.

 

 

 

12.

 

The area around the turbine is to be treated (e.g.sprayed down with water) to
minimize airborne dust.

 

--------------------------------------------------------------------------------

 

 

Attachment 7 - Services and Special Conditions For On-Site Services (Technical
Advisory Services Only)

 

69

--------------------------------------------------------------------------------

 

Services Scope of Supply

 

Seller will provide technical advisory supervision services for the Installation
and Commissioning of the combustion turbine package.  Installation services will
include supervising the installation of the combustion turbine package by the
Owner’s construction contractor.  Commissioning services will include flushing
supervision, checkout, and commissioning supervision of combustion turbine
mechanical systems, checkout and commissioning supervision of combustion turbine
electrical systems, and checkout and commissioning of the combustion turbine
package control system.  Seller will provide all general hand tools required for
the commissioning of the unit.  Flushing and calibration kits can also be
provided at GE Energy standard published rates.

 

The personnel required at site for the installation and commissioning of the
combustion turbine packages is as noted below.  The scope of work included in
this proposal assumes that the installation and commissioning schedule of the
combustion turbine package is not impacted by the installation and commissioning
schedules of additional balance of plant equipment that is not provided by
Seller (such as a demineralized water plant, steam turbine, gas compressors,
etc.).

 

Mechanical and Controls TA – Total of 5,160 estimated man-hours between these
individuals.

 

Also included in the services quoted are the various combustion turbine package
vendors will be required to commission specific combustion turbine package
components.  These are as noted below:

 

Generator Specialist – This individual will be responsible for testing of the
generator and commissioning of the automatic voltage regulator system.

 

The normal workweek will be limited to 60 hours (ten (10) hours per day for six
(6) days per week).  Standby time will be billed incremental to the hours noted
above at the effective rates at time of service.  If the Installation and
Commissioning schedule dictates longer working hour durations then additional
resources can be provided on an incremental daily rate basis.

 

GE Energy has provided an estimate, for the field service requirements as
spelled out in this section of the proposal.  In order to provide a man hour
estimate Seller has assumed a construction schedule to arrive at the man-hour
estimates illustrated above. However, the Services will be billed at the rate at
time of service.  Should the Owner’s schedule or the Owner’s construction
contractor’s experience result in an increase in the construction duration
assumed the latest version of the enclosed Service Rates would be applied as
appropriate.

 

70

--------------------------------------------------------------------------------

 

SC-S1. Definitions

 

(B)                                “TECHNICAL ADVISORS” OR “FIELD ENGINEERS”
SHALL MEAN THE PERSONNEL PROVIDED BY THE SELLER WHO WILL PERFORM TECHNICAL
ADVISORY OR FIELD ENGINEERING SERVICES.  TECHNICAL ADVISORS AND FIELD ENGINEERS
PROVIDED BY SELLER SHALL PREFERABLY BE FLUENT IN THE SPANISH LANGUAGE.  BUYER
SHALL HAVE THE RIGHT TO REQUEST THE PROMPT REPLACEMENT OF ANY TECHNICAL ADVISOR
OR FIELD ENGINEER UPON WRITTEN NOTICE TO SELLER. ALL EFFORTS WILL BE MADE TO
HAVE SPANISH SPEAKING TA’S.

 

(C)                                 “TECHNICAL ADVISORY SERVICES” OR “FIELD
ENGINEERING SERVICES” SHALL MEAN TECHNICAL ADVICE AND COUNSEL FROM TECHNICAL
ADVISORS OR FIELD ENGINEERS PROVIDED BY THE SELLER BASED ON THE SELLER’S CURRENT
ENGINEERING, MANUFACTURING, INSTALLATION AND OPERATION PRACTICES AS APPLICABLE
TO THE EQUIPMENT.  SUCH SERVICES MAY INCLUDE TESTING, ADJUSTMENT, PROGRAMMING
AND OTHER SIMILAR SERVICES.  TECHNICAL ADVISORY SERVICES OR FIELD ENGINEERING
SERVICE DO NOT INCLUDE SUPERVISION OR MANAGEMENT OF THE BUYER’S EMPLOYEES,
AGENTS, OR OTHER CONTRACTORS.

 

(D)                                “WORK SCOPE” MEANS THE “TECHNICAL ADVISORY
SERVICES” OR “FIELD ENGINEERING SERVICES” WORK SCOPE INCLUDED IN ATTACHMENT 1,
SCOPE OF SUPPLY.

 

SC-S2.         Service Price Basis

 

The price for Technical Advisory Services is set forth in the Technical Advisory
Rate Sheet at time of service. The attached Technical Advisory Rate sheet is for
information purposes only.

 

SC-S3.         Buyer’s Obligations At The Site

 

The Buyer will render all reasonable assistance to the Seller’s personnel at the
Site, including the following matters at the Buyer’s cost (except as may be
provided in the Contract or otherwise agreed in writing):

 

(A)                                 DESIGNATED REPRESENTATIVE(S) TO COORDINATE
ACTIVITIES BETWEEN THE SELLER, THE BUYER AND THE BUYER’S OTHER CONTRACTORS AT
THE SITE AND TO RESOLVE PROCEDURES FOR CERTAIN ACTIVITIES WHERE QUESTIONS MIGHT
OCCUR.  SUCH COORDINATION SHALL INCLUDE CONSULTATION WITH THE SELLER’S
REPRESENTATIVES PRIOR TO ARRIVAL AT SITE AS TO THE SCHEDULING OF ALL WORK
ASSOCIATED WITH THE SERVICES.  THE BUYER’S REPRESENTATIVE WILL HAVE IMMEDIATE
ACCESS TO THE BUYER’S WAREHOUSING AND SHOP FACILITIES.

 

(B)                                ALL DRAWINGS AND SPECIFICATIONS, TECHNICAL
INFORMATION AND EQUIPMENT MANUALS REQUIRED TO PERFORM THE WORK SCOPE AND ALL
PROTECTIVE RELAYING AND RELAY SETTINGS, AS APPROPRIATE.

 

(C)                                 COMPRESSED AIR AND ALL SITE UTILITIES IN THE
AMOUNTS, PRESSURES, AND VOLTAGES REQUIRED TO PERFORM THE WORK SCOPE, INCLUDING
ADEQUATE LIGHTING FOR NIGHTSHIFT WORK.

 

(D)                                ALL REQUIRED PARTS AND MISCELLANEOUS
MATERIALS (E.G., BOLTS, NUTS, GASKETS, STEEL PLATES, CONSUMABLES, LUBE OIL,
HYDRAULIC OIL, ETC).

 

71

--------------------------------------------------------------------------------

 

(E)                                 HEAVY LIFT EQUIPMENT, HAND AND POWER TOOLS
AND INSTRUMENTS, OXY-ACETYLENE WELDING MACHINES. THE SELLER’S PERSONNEL MAY
BRING CERTAIN TOOLS, WHICH WILL REMAIN SELLER’S PROPERTY. AT THE BUYER’S
REQUEST, THE SELLER MAY MAKE AVAILABLE CERTAIN SPECIAL TEST OR INSTALLATION
INSTRUMENTS/EQUIPMENT UNDER SELLER’S ESTABLISHED RENTAL PROVISIONS.

 

(F)                                   ANY LABOR, INCLUDING LABOR SUPERVISION AND
EQUIPMENT OPERATORS, THAT MAY BE REQUIRED IN CONNECTION WITH THE SERVICES.

 

(G)                                ACCESS TO LAY DOWN SPACE NEXT TO THE
EQUIPMENT UPON WHICH THE SERVICES WILL BE PERFORMED.

 

(H)                                CLIMATE-CONTROLLED AND SECURE OFFICE AND
STORAGE SPACE ADJACENT TO THE WORK AREA AT THE SITE, INCLUDING SECRETARIAL,
CLERICAL AND TRANSLATION ASSISTANCE, COPY MACHINES, OFFICE SUPPLIES AND
EQUIPMENT AND APPROPRIATE TELECOMMUNICATIONS, SUCH AS INTERNATIONAL AND LOCAL
TELEPHONE AND FAX SERVICES.

 

(I)                                    ASSISTANCE IN THE PROCUREMENT OF ALL
NECESSARY VISAS AND TRAVEL DOCUMENTS FOR SELLER PERSONNEL INCLUDING SPONSORSHIP,
IF REQUIRED, OF ALL SELLER PERSONNEL TO OBTAIN ENTRY AND RESIDENT VISAS AS
REQUIRED.

 

(J)                                    NOT USED.

 

(K)                                 ADEQUATE FIRE FIGHTING EQUIPMENT AND
SERVICES AND SITE SECURITY, MEANING THE ACT OF SAFEGUARDING THE JOB SITE AGAINST
SABOTAGE, THEFT, ARSON, OR ANY OTHER DISHONEST OR CRIMINAL ACT BY PHYSICAL
MEANS, SUCH AS GUARDS, FENCING, AND LIGHTING.  THIS INCLUDES THE SAFEGUARDING OF
ALL SELLER TOOLS, CONSUMABLES, EQUIPMENT AND PARTS WHEN PROVIDED.

 

(L)                                    PERSONNEL FOR ERECTION, CALIBRATION AND
SIMILAR MISCELLANEOUS ACTIVITIES ASSOCIATED WITH THE MECHANICAL ERECTION AND
COMMISSIONING OF THE EQUIPMENT.

 

SC-S4.         Health and Safety Matters; Hazardous Materials

 

The Buyer will take all necessary precautions, at all times, for the safety of
the Seller’s personnel at Site.  This includes, but is not limited to,
instruction of the Buyer’s safety practices, proper and safe handling of
hazardous substances and protection of the Seller’s personnel from exposure
thereto, energization/de-energization of all power systems (electrical,
mechanical and hydraulic) using a safe and effective lock-out tag procedure, and
conducting periodic safety meetings during construction and start-up.

 

The Seller may, from time to time, upon reasonable prior written notice, conduct
safety audits to insure safe conditions exist and make recommendations to the
Buyer concerning same.  Neither the conduct or non-conduct of safety audits nor
the making of any recommendation by the Seller shall relieve the Buyer of the
responsibility to provide a safe place to work.  If the Seller’s personnel
require medical attention, local Buyer facilities will be made available to the
Seller’s personnel for the duration of such needs.

 

72

--------------------------------------------------------------------------------

 

If, in the Seller’s reasonable opinion, the safe execution of Services at the
Site is, or is apt to be, imperiled by local conditions, the Seller may remove
some or all of its personnel from the Site and/or supervise performances of all
or any part of its Services and/or evacuate its personnel and the Buyer shall
assist in said evacuation, any of which shall be considered to be an Excusable
Delay.

 

Seller recognizes that Buyer may seek flexibility in Seller’s work schedule in
order to accelerate the delivery of Products or Services.  Seller will seek to
accommodate those requests subject to any limitations on maximum work periods or
minimum rest periods imposed by applicable law, it being understood that Seller
personnel will in any event require at least one Day of rest in any consecutive
seven-Day period, and shall work no longer than 140 hours in any two consecutive
weeks or more than 14 hours in any one Day, even where applicable law may permit
longer working periods or shorter rest periods.  With Seller’s written consent,
however, Seller personnel may in some instances work up to seven Days a week for
a maximum of 14 Days, but only to the extent permitted by applicable law and
required by the nature of the work.

 

The operation of equipment at the Site is the responsibility of the Buyer.  If
the Buyer requires or permits the Seller’s personnel to operate equipment at the
Site, the Buyer shall indemnify and save the Seller, its employees and agents,
harmless from expense and liability (including reasonable attorneys’ fees)
incurred by or imposed upon the Seller, its employees and agents, based upon
injury to persons (including death) or damage to property resulting from
operation of equipment at the Site by the Seller’s personnel, except that caused
by gross negligence or willful misconduct of Seller’s personnel.

 

To ensure adequate performance of the Services and that the Seller’s personnel
are not extended beyond their capability, the Seller’s personnel will not be
required to work on other projects or equipment during the term of the Contract.

 

If, at the Site, the Seller encounters toxic substances, hazardous substances or
hazardous wastes (as such terms may be defined in any statute or ordinance or
regulations promulgated by any federal, state or local governmental authority of
the United States or the country of the Site) (collectively, the “Hazardous
Materials”) which require special handling and/or disposal, the Buyer shall
immediately take whatever precautions are required to legally eliminate such
hazardous conditions so that the work under the Contract may safely proceed.  If
any such Hazardous Materials cause an increase in the Seller’s cost of or the
time required for performance of any part of the work, an equitable adjustment
shall be made in the price and schedule.  The Buyer agrees to properly dispose
of all Hazardous Materials produced or generated in the course of the Seller’s
work at the Site.  The Buyer shall indemnify the Seller for any and all claims,
damages, losses, causes of action, demands, judgments and expenses arising out
of or relating to:

 

(I)                                    THE PRESENCE OF ANY HAZARDOUS MATERIALS
WHICH ARE PRESENT ON THE SITE PRIOR TO THE COMMENCEMENT OF SELLER’S WORK,

 

(II)                                 IMPROPERLY HANDLED OR DISPOSED OF BY THE
BUYER OR

 

(III)                              BROUGHT ON TO THE SITE OR PRODUCED THEREON BY
PARTIES OTHER THAN THE SELLER.

 

73

--------------------------------------------------------------------------------

 

The Buyer is responsible for providing Site security twenty-four hours a Day,
seven Days a week, from first Delivery until Turbine Completion of the last
Unit.

 

SC-S5.         Miscellaneous

 

Technical Advisors and Field Engineers are not authorized to sign Change Orders
on behalf of Seller.  All Change Orders must be approved by the Project Manager
in advance of work and reduced to a written agreement pursuant to Article 18 of
the Contract.

 

In accordance with Article 6.4 of the Contract, Buyer shall have no right to
offset or backcharge hereunder, except as provided therein.

 

INSERT CURRENT RATE SHEET

 

74

--------------------------------------------------------------------------------

 

Attachment 8 - Drawing List & Schedule

 

75

--------------------------------------------------------------------------------

 

Drawing Title(1)

 

Drawing
Type(2)

 

LD Drawings

 

Group

 

Submittal
Date
(weeks
prior to
RTS)(3),(4),(5)

 

General Arrangement, Main Unit

 

CA

 

*

 

1

 

38

 

One Line Diagram, Generator

 

CA

 

*

 

1

 

38

 

Installation Foot Print, Anchor Bolt & Shear Lug Location, Main Unit

 

CI

 

*

 

1

 

38

 

Lift Arrangement

 

CI

 

 

 

5

 

30

 

Shipping Data

 

CI

 

 

 

5

 

30

 

Flow & Equipment Symbols, Mechanical

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Turbine Fuel System

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Turbine Lube Oil System

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Generator Lube Oil System

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Water Wash System

 

CI

 

 

 

2

 

36

 

 

--------------------------------------------------------------------------------

(1)

Some of the above drawings may not be required on specific jobs.

 

 

(2)

CA – Customer Approval

 

 

 

CI – Customer Information

 

 

 

REF – Reference Drawings supplied with Operation and Maintenance Manuals

 

 

(3)

Custom features for specific project requirements may require additional time.

 

 

(4)

Submittal time is for standard equipment and is shown in weeks prior to notice
of RTS (Ready to Ship) date, after receipt of a mutually agreed upon purchase
order, a fully conformed design specification and following completion of the
post award Order Definition Meeting (ODM).  ODM to take place a minimum of 10
weeks prior to first set (Group 1) of drawing due dates.

 

 

(5)

A drawing is considered submitted when uploaded to the www.projectnet.com site.

 

76

--------------------------------------------------------------------------------

 

Drawing Title(1)

 

Drawing
Type(2)

 

LD Drawings

 

Group

 

Submittal
Date
(weeks
prior to
RTS)(3),(4),(5)

 

Flow & Instrument Diagram, Ventilation& Combustion Air System

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Fire Protection System CO2(6)

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Hydraulic Start System

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Water Injection Pump

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Sprint System Skid

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Turbine Hydraulic System (DLE Only)

 

CI

 

 

 

2

 

36

 

Flow & Instrument Diagram, Sprint System Main Unit

 

CI

 

 

 

2

 

36

 

Instrumentation Diagram, Auxiliary Systems

 

CI

 

 

 

2

 

36

 

General Arrangement, Auxiliary Skid

 

CI

 

*

 

1

 

38

 

General Arrangement, Air Filter

 

CI

 

*

 

1

 

38

 

General Arrangement, Sprint Skid

 

CI

 

 

 

1

 

38

 

General Arrangement, Water Injection Skid

 

CI

 

 

 

1

 

38

 

General Arrangement, Fire Protection Skid(6)

 

CI

 

 

 

1

 

38

 

General Arrangement, Chromatograph (DLE only) (6)

 

CI

 

 

 

1

 

38

 

General Arrangement, Fin Fan Lube Oil Cooler(6)

 

CI

 

*

 

1

 

38

 

 

--------------------------------------------------------------------------------

(6)

Supplier Drawing

 

77

--------------------------------------------------------------------------------

 

Drawing Title(1)

 

Drawing
Type(2)

 

LD Drawings

 

Group

 

Submittal
Date
(weeks
prior to
RTS)(3),(4),(5)

 

Abbr., Symbols & Reference Data, Electrical

 

CI

 

 

 

1

 

38

 

Schematic, Generator Excitation System

 

CI

 

 

 

3

 

34

 

Schematic, Diagram, Circuit Breaker Control

 

CI

 

 

 

3

 

34

 

Schematic Diagram, Motor Control Center

 

CI

 

 

 

3

 

34

 

Three Line Diagram, Generator Metering

 

CI

 

 

 

3

 

34

 

Schedule, Motor Control Center

 

CI

 

 

 

2

 

36

 

Interconnect Plan, Electrical System

 

CI

 

*

 

2

 

36

 

Interconnection Wiring Diagram, Customer

 

CI

 

*

 

4

 

32

 

Interconnect Cable Schedule

 

CI

 

*

 

4

 

32

 

Plan & Elevation, 24V DC Battery System

 

CI

 

 

 

1

 

38

 

Plan & Elevation, 125 V DC Battery System

 

CI

 

 

 

1

 

38

 

Plan & Elevation, Turbine Control Panel

 

CI

 

*

 

3

 

34

 

Plan & Elevation, Lineside Cubicle

 

CI

 

*

 

1

 

38

 

Plan & Elevation, Neutral Cubicle

 

CI

 

*

 

1

 

38

 

Schematic, Lighting & Distribution

 

CI

 

 

 

3

 

34

 

Schematic, Vibration

 

CI

 

 

 

3

 

34

 

Schematic, Communication

 

CI

 

 

 

3

 

34

 

Area Classification Drawing

 

CI

 

 

 

3

 

34

 

Area Classification Report

 

CI

 

 

 

3

 

34

 

Schematic, Diagram, Discrete Control

 

CI

 

 

 

5

 

30

 

 

78

--------------------------------------------------------------------------------

 

Drawing Title(1)

 

Drawing
Type(2)

 

LD Drawings

 

Group

 

Submittal
Date
(weeks
prior to
RTS)(3),(4),(5)

 

Schematic, Diagram, Analog Control

 

CI

 

 

 

5

 

30

 

Generator Protective Relay Settings

 

CI

 

 

 

5

 

30

 

Digital Multi-function Meter Settings

 

CI

 

 

 

5

 

30

 

Digital Synchronizer Settings

 

CI

 

 

 

5

 

30

 

AVR Settings

 

CI

 

 

 

5

 

30

 

Wiring Diagram, Lineside Cubicle

 

M

 

 

 

 

 

 

 

Wiring Diagram, Neutral Cubicle

 

M

 

 

 

 

 

 

 

Wiring Diagram, Turbine Control Panel, Control Cubicle

 

M

 

 

 

 

 

 

 

Wiring Diagram, Turbine Control Panel, Termination Cubicle

 

M

 

 

 

 

 

 

 

Wiring Diagram, Auxiliary Skid

 

M

 

 

 

 

 

 

 

Wiring Diagram, Generator Skid

 

M

 

 

 

 

 

 

 

Wiring Diagram, Turbine Skid

 

M

 

 

 

 

 

 

 

Wiring Diagram, Sprint Skid

 

M

 

 

 

 

 

 

 

Wiring Diagram, Air Filter

 

M

 

 

 

 

 

 

 

Wiring Diagram, Fire & Gas Protection System(6)

 

M

 

 

 

 

 

 

 

Nameplate List, Engraving Schedule and Switch Development

 

M

 

 

 

 

 

 

 

Worksheet, Control System

 

M

 

 

 

 

 

 

 

 

79

--------------------------------------------------------------------------------

 

REFERENCE DRAWINGS (Included in Operation and Maintenance Manuals)

 

Wiring Diagrams

 

Nameplate List, Engraving Schedule, & Switch Development

 

Fuel Control Layout

 

Worksheet, Fuel Control

 

Sequencer Layout

 

Worksheet, Distributed I/O Configuration

 

MANUALS

 

I&C Manuals

 

1 month prior to shipment

 

 

 

O&M Manuals

 

1 month after shipment

 

NOTES:

 

1)                                     Submittal time is for standard equipment
and is shown in weeks after receipt of a mutually agreed upon purchase order, a
fully conformed design specification, and the post award Order Definition
Meeting (ODM).

 

2)                                     Submittal time is for standard
manufacturing cycles for equipment and if delivery timeframe required is in
excess of standard manufacturing cycles then submittal timeframes may be
extended.

 

3)                                     Custom designed features for specific
project requirements may require additional submittal times.

 

Some of the above drawings may not be required on specific jobs.  A drawing is
considered submitted when uploaded to the www.projectnet.com site.

 

Drawing Quantities and Format

 

Seller places customers’ drawings on ProjectNet, a secure internet site,
(www.project-net.com).  On this site the drawings can be viewed, printed and
annotated by the customer.

 

Seller provides all manuals in CD format for convenient access and
distribution.  In addition, by using web-based technology Seller provides
today’s customers with instant and secure access to their unit’s operation and
maintenance documentation with easy updates and “real time” information.

 

80

--------------------------------------------------------------------------------

 

Attachment 9 - Payment Schedule

 

81

--------------------------------------------------------------------------------

 

PAYMENT SCHEDULE

 

Payment* Date

 

Unit #1

 

Unit #2

 

Unit #3

 

Total

 

Inv.

 

Inv. Amounts

 

Price

 

$

17,155,000.00

 

$

17,155,000.00

 

$

17,155,000.00

 

$

51,465,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 26, 2008

 

$

1,715,500.00

 

$

1,715,500.00

 

$

1,715,500.00

 

$

5,146,500.00

 

1

 

$

5,146,500.00

 

October 15, 2008

 

$

1,143,666.67

 

 

 

 

 

$

1,143,666.67

 

2

 

$

1,143,666.67

 

November 15, 2008

 

$

1,143,666.67

 

$

1,143,666.67

 

 

 

$

2,287,333.33

 

3

 

$

2,287,333.33

 

December 15, 2008

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

4

 

$

3,431,000.00

 

January 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

5

 

$

3,431,000.00

 

February 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

6

 

$

3,431,000.00

 

March 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

7

 

$

3,431,000.00

 

April 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

8

 

$

3,431,000.00

 

May 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

9

 

$

3,431,000.00

 

June 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

10

 

$

3,431,000.00

 

July 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

11

 

$

3,431,000.00

 

August 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

12

 

$

3,431,000.00

 

September 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

3,431,000.00

 

13

 

$

3,431,000.00

 

RTS** UNIT 1 September 18 2009

 

$

1,715,500.00

 

 

 

 

 

$

1,715,500.00

 

15

 

$

1,715,500.00

 

October 15, 2009

 

 

 

$

1,143,666.67

 

$

1,143,666.67

 

$

2,287,333.33

 

14

 

$

2,287,333.33

 

RTS** UNIT 2 October 23 2009

 

 

 

$

1,715,500.00

 

 

 

$

1,715,500.00

 

16

 

$

1,715,500.00

 

November 15, 2009

 

 

 

 

 

$

1,143,666.67

 

$

1,143,666.67

 

17

 

$

1,143,666.67

 

RTS** UNIT 3 November 27 2009

 

 

 

 

 

$

1,715,500.00

 

$

1,715,500.00

 

18

 

$

1,715,500.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals

 

$

17,155,000.00

 

$

17,155,000.00

 

$

17,155,000.00

 

$

51,465,000.00

 

TOT

 

$

51,465,000.00

 

 

--------------------------------------------------------------------------------

NOTE:

*Payments shall be made by wire transfer directly to Seller’s bank using wire
transfer information below.

**Payments shall be made no later than 5 Days after issuance of Notice of
Readiness to Ship.

 

GE Packaged Power Inc.

Acc No 00-388615

Deutsche Bank Trust Company America

ABA No 0210010033

SWIFT: BKTRUS33

 

--------------------------------------------------------------------------------

 

Attachment 10 - Form of Comfort Letter

 

82

--------------------------------------------------------------------------------

 

Estimated Average Engine Performance NOT FOR GUARANTEE

 

[g256131kg31i001.jpg]

GE Energy

 

Performance By:

 

Johnny Metcalf

 

 

See Also:

 

Graph Below Data Points

 

 

 

 

 

 

 

Engine:

 

LM6000 PD-SPRINT

Date:

9/11/2008

Deck Info:

 

G0125O - 8g8.scp

Time:

7:51:50 AM

Generator:

 

MEID 800LL04 60Hz, 13.8kV, 0.9PF (14849)

Version:

3.7.3

Fuel:

 

Site Gas Fuel#900-1883, 21237 Btu/lb,LHV

 

 

 

This Deterioration model was generated using the following parameters:

 

Ambient Temp of 89.8°F, 60.4% RH, 120.0ft., Inlet Temp of 46.0°F, 5.00 Inlet
Loss, 6.00 Exhaust Loss and DLE NOx Control at 25ppm.

 

Degradation to be applied after 200 hrs of operation up to 1000. These numbers
apply only when GE operating procedures, and fuel, water and air specifications
are met.

 

NOT FOR GUARANTEE

 

 

 

% Degradation

 

Intervals 5 (hrs)

 

Power

 

Heat Rate

 

0 - 200

 

0.00

 

0.00

 

201 - 400

 

-0.11

 

0.06

 

401 - 600

 

-0.17

 

0.09

 

601 - 800

 

-0.24

 

0.12

 

801 - 1000

 

-0.32

 

0.15

 

 

83

--------------------------------------------------------------------------------

 

Attachment 12 - Termination Schedule

 

84

--------------------------------------------------------------------------------

 

Termination Schedule

 

On or Before the Below Date

 

Unit #1

 

Unit #2

 

Unit #3

 

Total

 

 

 

 

 

 

 

 

 

 

 

September 26, 2008

 

$

1,715,500.00

 

$

1,715,500.00

 

$

1,715,500.00

 

$

5,146,500.00

 

October 15, 2008

 

$

1,143,666.67

 

 

 

 

 

$

6,290,166.67

 

November 15, 2008

 

$

1,143,666.67

 

$

1,143,666.67

 

 

 

$

8,577,500.00

 

December 15, 2008

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

12,008,500.00

 

January 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

15,439,500.00

 

February 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

18,870,500.00

 

March 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

22,301,500.00

 

April 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

25,732,500.00

 

May 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

29,163,500.00

 

June 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

32,594,500.00

 

July 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

36,025,500.00

 

August 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

39,456,500.00

 

September 15, 2009

 

$

1,143,666.67

 

$

1,143,666.67

 

$

1,143,666.67

 

$

42,887,500.00

 

RTS UNIT 1 September 18 2009

 

$

1,715,500.00

 

 

 

 

 

$

44,603,000.00

 

October 15, 2009

 

 

 

$

1,143,666.67

 

$

1,143,666.67

 

$

46,890,333.33

 

RTS UNIT 2 October 23 2009

 

 

 

$

1,715,500.00

 

 

 

$

48,605,833.33

 

November 15, 2009

 

 

 

 

 

$

1,143,666.67

 

$

49,749,500.00

 

RTS UNIT 3 November 27 2009

 

 

 

 

 

$

1,715,500.00

 

$

51,465,000.00

 

 

--------------------------------------------------------------------------------

 

Attachment 13 - Start Up and Commissioning Spares

 

85

--------------------------------------------------------------------------------

 

P/N

 

Description

 

Qty

 

5VX1000

 

Belt, Generator, Supply Fan

 

4

 

5VS1250

 

Belt, Turbine, Exhaust Fan

 

6

 

HC9600FKN13Z

 

Filter Element, Turbine

 

4

 

CONNTECT 5000

 

Waterwash (55 Gal Drum)

 

1

 

HC9606FKS8Z

 

Filter Element, HP Hydraulic

 

2

 

AL1335

 

50 MA Fuses

 

5

 

AL1328

 

2 Amp Fuses

 

5

 

AL1310

 

0.1 Amp Fuse

 

5

 

AL1269

 

4 Amp Fuse

 

5

 

AL1308

 

31 MA Fuse

 

5

 

P13-2582

 

3 Amp Fuse

 

5

 

P13-5712

 

1/4 Amp Fuse

 

5

 

226166-001

 

Calibration, Gas Cylinder

 

1

 

CGI-3L

 

Gasket, Flg.4”-300#

 

5

 

CGI-3p

 

Gasket, Flg.6”-300#

 

5

 

CGI-3Q

 

Gasket, Flg.8”-300#

 

5

 

CGI-6D

 

Gasket, Flg 1”-600#

 

5

 

CGI-6G

 

Gasket, Flg.2”-600#

 

5

 

CGI-6J

 

Gasket, Flg.3”-600#

 

5

 

CGI-6L

 

Gasket, Flg.4”-600#

 

5

 

HC9600FKD13Z

 

Fuel Filter (Liquid)

 

2

 

ACB2442440Y1

 

Filter Element, Turbine Hyd

 

1

 

P16-5659

 

Filter Element, Hyd Start

 

2

 

HUOO157956

 

Filter Element, Charge Pump

 

1

 

 

--------------------------------------------------------------------------------

 

Attachment 14 - GE Parent Guaranty

 

86

--------------------------------------------------------------------------------

 

GUARANTY AGREEMENT

 

This GUARANTY AGREEMENT (the “Guaranty”) is made as of the [Day]th day of
[Month], [Year], by GENERAL ELECTRIC COMPANY, a corporation duly organized and
existing under the laws of the State of New York, U.S.A., with its head office
situated at 3135 Easton Turnpike, Fairfield, Connecticut 06431, U.S.A., and a
place of business at 1333 West Loop South, Houston, TX 77027 U.S.A. (herein
called “Guarantor”), for the benefit of Empressa Electrica Nueva Esperanza
S.R.L., a Peruvian limited liability partnership, with its head office situated
at Av. Larco 1301 - Oficina, 1902 Torre Parque Mar, Miraflores 18, Peru (herein
called “Owner”).  (Guarantor and Owner are individually referred to herein as a
“Party” and collectively as the “Parties”.)

 

RECITALS:

 

WHEREAS, GE Packaged Power, Inc., a corporation duly organized and existing
under the laws of the State of Delaware, U.S.A., with its head office situated
at 1333 West Loop South Houston, TX  77008 (herein called “Contractor”) is a
wholly owned affiliate of Guarantor;

 

WHEREAS, Owner has entered into an agreement with Contractor dated
September 25th, 2008 (together with the schedules, annexes, and exhibits thereto
and as the same may be amended from time to time, herein called the “Contract”),
for the supply of three (3) gas turbine generator to be located in the vicinity
of Caleta Cruz, northwestern Peru;

 

WHEREAS, Guarantor is the ultimate parent company of Seller and the agreement of
Owner to enter into the Contract is of substantial and material benefit to
Guarantor; and

 

WHEREAS, in order to induce Owner to enter into the Contract and pursuant to
Article 35 of the Contract which requires Seller to obtain and deliver a parent
company guaranty of Seller’s performance under the Contract, the Guarantor has
agreed to execute and deliver this Guaranty.

 

NOW, THEREFORE, in consideration of the above premises, the mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby expressly acknowledged, the Parties hereto agree as
follows:

 

1.  Guarantor unconditionally and irrevocably guarantees to Owner that in the
event of Seller failing in any respect to perform or observe any or all the
terms and provisions of the Contract, Guarantor shall immediately upon first
demand in writing by Owner perform or take such steps as are necessary to
achieve performance or observance of such terms and provisions and shall
indemnify and keep indemnified Owner against any and all losses, damages,
claims, costs, charges, and expenses howsoever arising from the said failure.
This Guaranty is an absolute, unconditional and continuing guaranty of payment
and performance and not of collection and Guarantor agrees that its obligations
hereunder are those of primary obligor and not merely of a surety.

 

2.  The liability of Guarantor hereunder shall not be released, reduced,
affected or discharged by (i) any alteration in the relationship between Seller
and Owner which has been consented to by Seller in writing (with or without the
knowledge or consent of Guarantor); (ii) or by any forbearance or indulgence by
Owner towards Seller or Guarantor whether as to payment, time, performance, or
otherwise; (iii) any insolvency, bankruptcy or similar occurrence of the
Contractor; (iv) any amendment, compromise,

 

1

--------------------------------------------------------------------------------

 

settlement, release, change, modification, termination or waiver of or consent
to any departure from the Contract.

 

3.  Guarantor agrees to make any payment due hereunder upon first written demand
without set-off or counterclaim and without any legal formality such as protest
or notice being necessary, and waives all privileges or rights which it may have
as a guarantor, including any right to require Owner to claim payment or to
exhaust remedies against Seller or any other person.

 

4.  The obligations of Guarantor hereunder shall continue in full force and
effect until Contractor shall have fully discharged all of its obligations under
and in accordance with the Contract.

 

5.  Owner may assign, charge, or transfer all or any of its right, title and
interest in this Guaranty, without Guarantor’s consent, upon such terms as Owner
may think fit to any banks and financial institutions providing credit or
guaranty facilities to Owner or an affiliate thereof in connection with the
Contract and any agent or security trustee acting on their behalf, and may
otherwise assign this Guaranty under the same conditions in which it may assign
the Contract.  This Guaranty and the undertakings herein contained shall be
binding upon the successors and assigns of Guarantor and shall extend to and
inure for the benefit of the successors or permitted assignees of Owner.  No
person other than Owner or such permitted assignees as described above is
intended as a beneficiary of this Guaranty nor shall any such person have any
rights hereunder.  Owner may not otherwise assign or otherwise transfer any of
its rights or obligations hereunder.

 

6.  Notwithstanding anything to the contrary above, in the event of any claim
under this Guaranty, Guarantor shall be entitled to assert any defense, set-off
or counterclaim that Seller could assert had such claim been made directly
against any person under the Contract.

 

7. Guarantor hereby waives promptness, diligence, presentment, protest, demand
for payment, notice of default or nonpayment.

 

8.  Guarantor waives any right to require Owner to pursue any right or remedy
first against Contractor or any other person or entity which may be liable in
respect of the guaranteed obligations or against any collateral or guaranty
thereof or right or offset with respect thereto.

 

9.  In the event there is any dispute under the Contract that relates to a sum
being claimed under this Guaranty, the obligations under this Guaranty related
solely to such dispute, shall be suspended pending the resolution of such
dispute either by agreement of Owner and Contractor or by non-appealable final
judicial order.

 

10.  This Guaranty shall be governed by and construed in accordance with the
laws of the State of New York, provided that any provision of such law
invalidating any provision of this Guaranty or modifying the intent of the
Parties as expressed in the terms of this Guaranty shall not apply.

 

11.  Any legal action or proceeding with respect to this Guaranty shall be
brought in the United States District Court for the Southern District of New
York or, if such court lacks jurisdiction, in the Supreme Court of the State of
New York in New York County.  Each of the Parties hereby accepts and consents
to, generally and unconditionally, the jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof.  Each of the Parties irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such Party at the address first set forth in
the Contract.  Each of the Parties hereby irrevocably waives any objection which
it may now or hereafter have to the laying of

 

2

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venue of any of the aforesaid actions or proceedings arising out of or in
connection with this Guaranty brought in the courts referred to above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective authorized representatives as of the date first written
above.

 

 

Empressa Electrica Nueva Esperanza S.R.L.

 

GENERAL ELECTRIC COMPANY

 

 

 

 

 

 

By:

 

 

By:

 

 

 

 

Name:

 

 

Name:

 

 

 

 

Title:

 

 

Title:

 

 

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Attachment 15 - Form of Standby Letter of Credit

 

87

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IRREVOCABLE PERFORMANCE STANDBY LETTER OF CREDIT (REF. NO.)

 

Issuing Bank:

 

GE Relationship bank

 

 

 

Confirming Bank:

 

(no confirmation required if issued by a GE Relationship Bank)

 

 

otherwise - confirmation by GE Relationship bank - NY

 

 

 

 

 

 

Amount:

 

U.S. $

 

 

 

Issue Date:

 

 

 

 

 

Expiration Date:

 

 

 

 

 

Beneficiary:

 

GE Packaged Power, Inc.

 

 

1333 West Loop South

 

 

Houston, TX 77027

 

 

 

Applicant: Empressa Electrica Nueva Esperanza

 

 

 

Gentlemen:

 

By order of our client,                               (Name and Address of
Component) (hereinafter known as “                “) and for account of same, we
hereby establish our Irrevocable Standby Letter of Credit (“Letter of Credit”). 
We hereby authorize you to draw on (Name & Address of Bank) up to an aggregate
amount of  (Written Amount), (USD) to be available to (GE Packaged Power, Inc.)
when accompanied by the following documents:

 

1.               Your sight draft on us;

 

2.               A statement purportedly signed by a corporate officer of GE
stating that:

 

“(Insert name of Applicant)  has failed to fulfill its contractual payment
obligations in accordance with the terms of the Contract dated (insert date)
between (customer) and GE Packaged Power, Inc. and we hereby demand payment in
the amount of  (Written Amount and Figures) ($   ) under your Standby Letter of
Credit No.               ”. ;

 

This Letter of Credit will automatically expire on the earliest of:

 

(i)                                     The date that the Amount of this Letter
of Credit is reduced to zero;

(ii)                                  The date this Letter of Credit is returned
for cancellation;

(iii)                               DD-MM-YYYY

 

Drafts must be drawn and presented at our office at (location) not later than
(expiry date).

 

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The amount of any draft drawn hereunder must be endorsed on this Letter of
Credit and marked: “Drawn under (Issuing Bank Name), Irrevocable Standby Letter
of Credit No.         “and indicate the date drawn.

 

All opening bank charges including, but not limited to fees or commissions shall
be for Applicant’s account.

 

Except as far as otherwise expressly stated herein, this Letter of Credit is
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision) International Chamber of Commerce Publications No. 500.  As to matters
not covered by UCP, this Letter of Credit shall be subject to and governed by
the laws of the State of New York.

 

 

 

Authorized Signatures(s)

 

 

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GUARANTY AGREEMENT

 

This GUARANTY AGREEMENT (the “Guaranty”) is made as of the 29th day of
September, 2008, by GENERAL ELECTRIC COMPANY, a corporation duly organized and
existing under the laws of the State of New York, U.S.A., with its head office
situated at 3135 Easton Turnpike, Fairfield, Connecticut 06431, U.S.A., and a
place of business at 1333 West Loop South, Houston, TX 77027 U.S.A. (herein
called “Guarantor”), for the benefit of Empresa Electrica Nueva Esperanza
S.R.L., a Peruvian limited liability partnership, with its head office situated
at Av. Larco 1301 - Oficina, 1902 Torre Parque Mar, Miraflores 18, Peru (herein
called “Owner”).  (Guarantor and Owner are individually referred to herein as a
“Party” and collectively as the “Parties”.)

 

RECITALS:

 

WHEREAS, GE Packaged Power, Inc., a corporation duly organized and existing
under the laws of the State of Delaware, U.S.A., with its head office situated
at 1333 West Loop South Houston, TX  77008 (herein called “Contractor”) is a
wholly owned affiliate of Guarantor;

 

WHEREAS, Owner has entered into an agreement with Contractor dated
September 25th, 2008 (together with the schedules, annexes, and exhibits thereto
and as the same may be amended from time to time, herein called the “Contract”),
for the supply of three (3) gas turbine generator to be located in the vicinity
of Caleta Cruz, northwestern Peru;

 

WHEREAS, Guarantor is the ultimate parent company of Seller and the agreement of
Owner to enter into the Contract is of substantial and material benefit to
Guarantor; and

 

WHEREAS, in order to induce Owner to enter into the Contract and pursuant to
Article 35 of the Contract which requires Seller to obtain and deliver a parent
company guaranty of Seller’s performance under the Contract, the Guarantor has
agreed to execute and deliver this Guaranty.

 

NOW, THEREFORE, in consideration of the above premises, the mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby expressly acknowledged, the Parties hereto agree as
follows:

 

1.  Guarantor unconditionally and irrevocably guarantees to Owner that in the
event of Seller failing in any respect to perform or observe any or all the
terms and provisions of the Contract, Guarantor shall immediately upon first
demand in writing by Owner perform or take such steps as are necessary to
achieve performance or observance of such terms and provisions and shall
indemnify and keep indemnified Owner against any and all losses, damages,
claims, costs, charges, and expenses howsoever arising from the said failure.
This Guaranty is an absolute, unconditional and continuing guaranty of payment
and performance and not of collection and Guarantor agrees that its obligations
hereunder are those of primary obligor and not merely of a surety.

 

2.  The liability of Guarantor hereunder shall not be released, reduced,
affected or discharged by (i) any alteration in the relationship between Seller
and Owner which has been consented to by Seller in writing (with or without the
knowledge or consent of Guarantor); (ii) or by any forbearance or indulgence by
Owner towards Seller or Guarantor whether as to payment, time, performance, or
otherwise; (iii) any insolvency, bankruptcy or similar occurrence of the
Contractor; (iv) any amendment, compromise,

 

1

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settlement, release, change, modification, termination or waiver of or consent
to any departure from the Contract.

 

3.  Guarantor agrees to make any payment due hereunder upon first written demand
without set-off or counterclaim and without any legal formality such as protest
or notice being necessary, and waives all privileges or rights which it may have
as a guarantor, including any right to require Owner to claim payment or to
exhaust remedies against Seller or any other person.

 

4.  The obligations of Guarantor hereunder shall continue in full force and
effect until Contractor shall have fully discharged all of its obligations under
and in accordance with the Contract.

 

5.  Owner may assign, charge, or transfer all or any of its right, title and
interest in this Guaranty, without Guarantor’s consent, upon such terms as Owner
may think fit to any banks and financial institutions providing credit or
guaranty facilities to Owner or an affiliate thereof in connection with the
Contract and any agent or security trustee acting on their behalf, and may
otherwise assign this Guaranty under the same conditions in which it may assign
the Contract.  This Guaranty and the undertakings herein contained shall be
binding upon the successors and assigns of Guarantor and shall extend to and
inure for the benefit of the successors or permitted assignees of Owner.  No
person other than Owner or such permitted assignees as described above is
intended as a beneficiary of this Guaranty nor shall any such person have any
rights hereunder.  Owner may not otherwise assign or otherwise transfer any of
its rights or obligations hereunder.

 

6.  Notwithstanding anything to the contrary above, in the event of any claim
under this Guaranty, Guarantor shall be entitled to assert any defense, set-off
or counterclaim that Seller could assert had such claim been made directly
against any person under the Contract.

 

7. Guarantor hereby waives promptness, diligence, presentment, protest, demand
for payment, notice of default or nonpayment.

 

8.  Guarantor waives any right to require Owner to pursue any right or remedy
first against Contractor or any other person or entity which may be liable in
respect of the guaranteed obligations or against any collateral or guaranty
thereof or right or offset with respect thereto.

 

9.  In the event there is any dispute under the Contract that relates to a sum
being claimed under this Guaranty, the obligations under this Guaranty related
solely to such dispute, shall be suspended pending the resolution of such
dispute either by agreement of Owner and Contractor or by non-appealable final
judicial order.

 

10.  This Guaranty shall be governed by and construed in accordance with the
laws of the State of New York, provided that any provision of such law
invalidating any provision of this Guaranty or modifying the intent of the
Parties as expressed in the terms of this Guaranty shall not apply.

 

11.  Any legal action or proceeding with respect to this Guaranty shall be
brought in the United States District Court for the Southern District of New
York or, if such court lacks jurisdiction, in the Supreme Court of the State of
New York in New York County.  Each of the Parties hereby accepts and consents
to, generally and unconditionally, the jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof.  Each of the Parties irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such Party at the address first set forth in
the Contract.  Each of the Parties hereby irrevocably waives any objection which
it may now or hereafter have to the laying of

 

2

--------------------------------------------------------------------------------

 

venue of any of the aforesaid actions or proceedings arising out of or in
connection with this Guaranty brought in the courts referred to above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective authorized representatives as of the date first written
above.

 

 

Empressa Electrica Nueva Esperanza S.R.L.

 

GENERAL ELECTRIC COMPANY

 

 

 

 

 

 

By:

/s/ Rafael Zoeger

 

By:

/s/ Darryl Wilson

 

 

 

Name:

RAFAEL ZOEGER

 

Name:

Darryl Wilson

 

 

 

Title:

GENERAL MANAGER

 

Title:

Vice President

 

3

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