exv10w5



 







EXHIBIT 10.5



SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT

FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY

FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED

AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).




NATURAL GAS LIQUIDS EXCHANGE AGREEMENT




By and Between




ONEOK HYDROCARBON, L.P.




and




ONEOK TEXAS FIELD SERVICES, L.P.




Dated: December 1, 2005




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	Article I., Definitions
	 	 	1	 
	Article II., Term
	 	 	4	 
	Article III., Quantity, Delivery of NGLs, Exchange of Products, Exchange Differentials
	 	 	5	 
	Section 3.1, Dedicated Plants
	 	 	5	 
	Section 3.2, Deliveries, Receipts
	 	 	5	 
	Section 3.3, Customer’s Deliveries
	 	 	6	 
	Section 3.4, Linefill, Product Volumes
	 	 	7	 
	Section 3.5, Exchange Points
	 	 	8	 
	Section 3.6, Exchange Differential
	 	 	9	 
	Section 3.7, CO2 Quality Adjustment Fees
	 	 	10	 
	Section 3.8, Alternative Connections
	 	 	11	 
	Article IV., Statements and Payments
	 	 	11	 
	Article V., Termination of Prior Agreement
	 	 	12	 
	Article VI., Notices
	 	 	12	 
	Article VII., General
	 	 	12	 
	Article VIII., Measurement, Sampling and Analysis
	 	 	12	 
	Article IX., Quality
	 	 	16	 
	Article X., Records
	 	 	16	 
	Article XI., Custody and Title
	 	 	17	 
	Article XII., Warranties, Indemnification
	 	 	17	 
	Article XIII., Taxes
	 	 	18	 
	Article XIV., Remedies for Breach
	 	 	18	 
	Article XV., Government Edicts
	 	 	19	 
	Article XVI., Force Majeure
	 	 	20	 
	Article XVII., Interpretation
	 	 	20	 
	Article XVIII., Assignment
	 	 	21	 
	Article XIX., Credit
	 	 	21	 
	Article XX., Processor’s System Shutdown
	 	 	22	 
	Article XXI., Miscellaneous
	 	 	22	 
	Section 21.1, Headings, Articles and Sections
	 	 	22	 
	Section 21.2, No Third Party Beneficiary
	 	 	22	 
	Section 21.3, Severability
	 	 	22	 
	Section 21.4, Setoffs and Counterclaims
	 	 	22	 






1









 






	 	 	 	 	 
	Section 21.5, No Partnership or Association
	 	 	22	 
	Section 21.6, No Commissions, Fees or Rebates
	 	 	23	 
	Section 21.7, Joint Action
	 	 	23	 
	Section 21.8, Safe Handling
	 	 	23	 
	Section 21.9., Processor’s Safety Regulations
	 	 	23	 
	Section 21.10., Use of Products
	 	 	23	 






2









 





NATURAL GAS LIQUIDS EXCHANGE AGREEMENT




     THIS NATURAL GAS LIQUIDS EXCHANGE AGREEMENT (“Agreement”) is made on this 1st day
of December, 2005 by and between ONEOK TEXAS FIELD SERVICES, L.P., a Texas limited partnership,
Tulsa, Oklahoma, (“Customer”), and ONEOK HYDROCARBON, L.P., a Delaware limited liability company,
Tulsa, Oklahoma (“Processor”).



     WHEREAS, Customer and its Affiliates (defined below) are in the business of producing and
marketing NGLs (defined below), and Owns or Controls raw natural gas liquid production from various
gas processing plants as hereinafter set forth; and



     WHEREAS, Customer wishes to exchange all NGLs Owned or Controlled by Customer and/or its
Affiliates from such plants for Products (defined below).



     NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, and
other good and valuable consideration, Customer and Processor agree as follows:



ARTICLE I

DEFINITIONS




     Section 1.1 Definitions. In this Agreement, each of the terms set forth
hereinafter shall have the meanings stated in this Section.




	A.	 	“Adjusted Base Exchange Differential” shall have the meaning specified in Section 3.6 of this
Agreement.
	 
	B.	 	“Affiliate” of a corporation, partnership, company, or other business enterprise or entity
(collectively “Person”) means a Person which directly or indirectly controls, is controlled
by, or is under common control with such Person. As used herein, the term “control”
(including its derivatives and similar terms) means (i) owning, directly or indirectly, at
least fifty percent (50%) of the voting rights attributable to the outstanding shares of the
controlled Person if such voting rights confer upon the shareholder the power, directly or
indirectly, to direct, or cause to be directed, the management and policies of the controlled
Person, or (ii) with respect to a Person that is not a corporation, having the power, directly
or indirectly, to direct, or cause to be directed, the management and policies of the
controlled Person through the ownership of voting securities, other ownership interests, by
contract, or otherwise.
	 
	C.	 	“Alternative Term” shall have the meaning specified in Section 2.1 of this Agreement.
	 
	D.	 	“Barrel” shall be forty-two U.S. Gallons.
	 
	E.	 	“Base Exchange Differential” shall have the meaning specified in Section 3.6 of this
Agreement.
	 
	F.	 	“CO2” shall have the meaning specified in Section 3.7 of this Agreement.




1









 






	G.	 	“CO2 Content” shall have the meaning specified in Section 3.7 of this Agreement.
	 
	H.	 	“Contract Year” shall be each twelve (12) Month period during the term hereof ending on June
30, provided that the first such period shall commence on the Effective Date and end on June
30, 2006, and each subsequent period thereafter through the term of this Agreement shall be
for a full twelve (12) Months, including any renewal terms.
	 
	I.	 	“Controlled” means, when referring to NGLs, NGLs that Customer or its Affiliates, as the case
may be, has the right, directly or indirectly, to have fractionated or exchanged into
Products.
	 
	J.	 	“Current Linefill Requirement” shall have the meaning specified in Section 3.4 of this
Agreement.
	 
	K.	 	“Day” shall be a period of twenty-four (24) consecutive hours commencing at 7:00 A.M. Central
Time.
	 
	L.	 	“Dedicated Plants” or “Dedicated Plant” shall have the meanings specified in Section 3.1 of
this Agreement.
	 
	M.	 	“Delivery Point” or “Delivery Points” shall have the meaning specified in Section 3.3 of this
Agreement.
	 
	N.	 	“Effective Date” shall have the same meaning as the term “Closing Date” in that certain
Agreement and Plan of Merger by and among ONEOK Field Services Company, ONEOK Field Services
Holdings, L.L.C., Eagle Rock Gas Gathering & Processing, Ltd., and Eagle Rock Field Services,
L.P.
	 
	O.	 	“Exchange Point” and “Exchange Points” shall have the meanings specified in Section 3.5 of
this Agreement.
	 
	P.	 	“Force Majeure” shall have the meaning specified in Section 16.2 of this Agreement.
	 
	Q.	 	“Fractionator” shall mean Processor’s fractionation facilities located at or near Medford,
Oklahoma.
	 
	R.	 	“Fuel Gas Cost” as used in Article III, shall mean the sum of (i) and (ii) below:






	 	(i).	 	The price of natural gas for the Month prior to the Month in question obtained by
referencing the Williams Natural Gas Index, Texas, Oklahoma, Kansas, as published in
Inside F.E.R.C.’s Gas Market Report (McGraw-Hill Inc.); and,
	 
	 	(ii).	 	The maximum transportation rate (including fuel and loss) for natural gas
delivered to Medford, Oklahoma (or the nearest point thereto served by the pipeline at
issue), for the Month prior to the Month in question, obtained by referencing the maximum
transportation rate to such destination for the Williams Pipeline. The maximum
transportation rate referred to in this paragraph shall be obtained from the Williams
Pipeline approved natural gas tariff.





2









 






	 	 	If the Inside F.E.R.C.’s Gas Market Report, or its successor publication, ceases to be
published, or if it ceases to publish the above described index, then the price(s) shall, if
available, be obtained from an alternative industry publication (private or government) which
publishes the same pricing information. If the above index prices are no longer available,
then Processor and Customer shall, within sixty (60) Days of the first Day of the Month that
the cessation occurred, agree upon an alternative pricing mechanism which will reflect the
fair market price of natural gas utilized as fuel in Processor’s Fractionator. The
alternative pricing mechanism agreed upon shall apply retroactively to the first Day of the
Month that the posting terminated. If the parties cannot agree upon an alternate pricing
mechanism within the period stipulated above, then the issue of how to determine the fair
market price of natural gas utilized as fuel in Processor Fractionator shall be submitted to
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration
Association.
	 
	S.	 	“Gallon” shall be a U.S. Gallon of 231 cubic inches of liquid corrected for temperature to
sixty degrees (60°) Fahrenheit, and at the equivalent vapor pressure of the liquid.
	 
	T.	 	“Gas Producers” shall mean corporations, partnerships, companies, or other business
enterprises or entities that supply natural gas to the Dedicated Plant(s) at issue for the
extraction of NGLs therefrom. A “Gas Producer” at a particular Dedicated Plant shall not be
deemed a “Gas Producer” at other Dedicated Plants unless the “Gas Producer” actually delivers
natural gas for processing in the other Dedicated Plant in question.
	 
	U.	 	“High CO2 NGLs” shall have the meaning specified in Section 3.7 of this Agreement.
	 
	V.	 	“Linefill” shall have the meaning specified in Section 3.4 of this Agreement.
	 
	W.	 	“Location A” shall have the meaning specified in Section 3.5 of this Agreement.
	 
	X.	 	“Location B” shall have the meaning specified in Section 3.5 of this Agreement.
	 
	Y.	 	“Location C” shall have the meaning specified in Section 3.5 of this Agreement.
	 
	Z.	 	“Location D” shall have the meaning specified in Section 3.5 of this Agreement.
	 
	AA.	 	“Material Variance” shall have the meaning specified in Section 3.5 of this Agreement.
	 
	BB.	 	“Month” shall be a period of time commencing on the first Day of a calendar Month,
and ending on the first Day of the next calendar Month.
	 
	CC.	 	“NGLs” shall mean the mixture of liquid hydrocarbons and non-hydrocarbon components that are condensed, and/or absorbed
from or separated out of gas currently and subsequently processed in the Dedicated Plant(s). NGLs shall not include field
condensate recovered in gas gathering systems, unless and until Processor delivers written notice to Customer stating that
it is able and willing to exchange such condensate from any one or more of the Dedicated Plants pursuant to the terms of
this Agreement, and upon delivery of such notice, NGLs shall include all condensate delivered from





3









 






	 	 	such Dedicated Plants. As used herein, “condensate” means liquid hydrocarbons that separate from natural gas due to temperature and/or pressure
changes upstream of a gas plant.
	 
	DD.	 	“Option Term” shall have the meaning specified in Section 2.1 of this Agreement.
	 
	EE.	 	“Owned” or “Owns” means, when referring to NGLs, NGLs to which Customer or its Affiliates, as the case may be, have title.
	 
	FF.	 	“Products” shall be fractionated NGLs, consisting of E/P, HD5 propane, I-Grade isobutane, D-Grade normal butane and M-Grade
14# Reid Vapor Pressure (RVP) natural gasoline, in conformity with the specifications attached hereto as Exhibits A, B, C,
D, and E, respectively. HD5 propane, I-Grade isobutane, D-Grade normal butane, and M-Grade 14# RVP natural gasoline may be
referred to herein as “Propane Plus”, or as “C3+”.
	 
	GG.	 	“Quality Adjustment Fee” shall have the meaning specified in Section 3.7 of this Agreement.
	 
	HH.	 	“Take-In-Kind-Rights” shall mean the right of a Gas Producer to receive, and the obligation of Customer to deliver, at or
near the tailgate of the Dedicated Plant in question, the NGLs extracted from natural gas owned and delivered by such Gas
Producer to the Dedicated Plant at issue.
	 
	II.	 	“Year” shall be a period of three hundred sixty-five (365) consecutive Days; provided, however, that any Year which
contains three hundred sixty-six (366) consecutive Days shall also constitute one “Year.”





ARTICLE II

TERM




     Section 2.1 Term. This Agreement shall be effective as of the Effective Date and
shall continue in full force and effect through (**) (the “Primary Term”), and (a) the
effectiveness may be extended until (**) (the “Option Term”) in accordance with the terms
and conditions contained herein, if the Processor and Customer mutually agree to such Option Term
and such agreement is evidenced by a writing signed by both Processor and Customer, or (b), if the
Option Term is not agreed upon, the effectiveness will be extended (the “Alternative Term”) upon
other terms and conditions to be negotiated in good faith by Processor and Customer prior to the
expiration of the Primary Term; provided that such negotiations (i) shall be conducted exclusively
between Processor and Customer, (ii) shall be based on and take into account Processor’s costs,
overhead, and capital expenditures required to continue performance hereunder, and (iii) shall
provide Processor with a rate of return based on the greater of Processor’s historical rates of
return under this Agreement or twelve percent after taxes. If the parties hereto have not agreed
to the Option Term at least ninety (90) Days prior to the conclusion of the Primary Term, they
shall promptly enter into good faith negotiations to determine the Alternative Term, and shall use
commercially reasonable efforts to agree upon an Alternative Term prior to the expiration of the
Primary Term. This Agreement shall continue in full force and effect after the Option Term or
Alternative Term, as applicable, from Contract Year to Contract Year unless or until terminated
either by Customer or Processor upon ninety (90) Days advance written notice to the other party
hereto specifying a termination date at the end of the Option Term or Alternative Term, as
applicable, or of any Contract Year thereafter.



4









 





ARTICLE III

QUANTITY, DELIVERY OF NGLS, EXCHANGE OF PRODUCTS, EXCHANGE DIFFERENTIALS




     Section 3.1 Dedicated Plants.




	A.	 	Subject to the provisions herein, Customer shall deliver to Processor all of the NGLs that
Customer or its Affiliates Own or Control from the following plants (hereinafter the
“Dedicated Plants”), such volume of NGLs from each Dedicated Plant estimated to be the
following (the “Estimated Production”):





	 	 	 	 	 
	Dedicated Plants	 	BPD
	(**)
	 	 	(**)	 
	 
	 	 	 	 
	Total:

	 	 	(**)	 







	B.	 	Notwithstanding the foregoing provisions of this Section, Customer may elect to exempt from
delivery hereunder any Propane extracted and fractionated at the Cargray Plant, and sold by
Customer at the tailgate of such Plant.
	 
	C.	 	Except as otherwise provided herein, and except for any Take-In-Kind Rights that the Gas
Producers have or may have, it is understood and agreed that Customer shall not enter into any
agreement that would call for or allow any NGLs Owned or Controlled by Customer or its
Affiliates to be marketed by a party other than Customer unless that party agrees in writing
that all such NGLs shall be subject to this Agreement for its remaining term, including any
extensions or renewals of this Agreement pursuant to the terms hereof. Subject to Article
XVIII, ASSIGNMENT, this Agreement shall not be construed to limit or otherwise constrain
Customer’s right to grant Take-In-Kind Rights to the Gas Producers. Customer shall exercise
commercially reasonable efforts to continue to Own or Control NGLs which are Owned or
Controlled at the time this Agreement is entered into or which it may subsequently Own or
Control during the term of this Agreement.





     Section 3.2 Deliveries, Receipts.




	A.	 	Subject to the following provisions, Processor shall accept the NGLs from Customer tendered
hereunder during the term of this Agreement. Although it is the intention of both parties to
this Agreement for Processor to receive, and Customer to deliver, the entire production of
NGLs from the Dedicated Plants, notwithstanding anything herein however, Processor shall not
be required to accept NGLs in excess of 110% of the Estimated Production from any Dedicated
Plant if such excess volumes are not economical for Processor to accept and fractionate, in
Processor’s sole discretion, and Processor provides written notice of such determination to Customer. If
Customer




5









 






	 	 	provides notice to Processor of its desire to amend this Agreement to adjust the
Estimated Production during the term of this Agreement, Processor shall not unreasonably
refuse such request. If Processor refuses to so amend this Agreement, then upon thirty (30)
days notice to Processor, Customer shall have the right to terminate this Agreement with
respect to only the volume of NGLs actually produced from such Dedicated Plant(s) which is
in excess of 110% of the then-effective Estimated Production for such Dedicated Plant(s).






	B.	 	If, for any period of one hundred and eighty (180) consecutive Days (commencing on or after
one (1) Year following the Effective Date), Customer fails to deliver at least ninety percent
(90%) of the then-effective Estimated Production from any Dedicated Plant (excluding periods
of Force Majeure), then Processor shall have the right, within thirty (30) Days immediately
after the expiration of such 180 consecutive Day period, by providing written notice to
Customer, to reduce the then-effective Estimated Production to the average daily NGL volume
actually delivered from the Dedicated Plant at issue during such 180 consecutive Day period
(excluding periods of Force Majeure). Such reduction is to be effective as of the date of
Processor’s notice. If the volume of Customer’s NGLs available to be delivered hereunder from
a particular Dedicated Plant or Dedicated Plants increases to a level which is in excess of
the then-effective Estimated Production, then Customer may request an increase in the
then-effective Estimated Production to the volume of NGLs Customer estimates to be available
from a Dedicated Plant or Dedicated Plants, which such request will be in writing and detail
the basis for the increase or anticipated increase in the NGL volume. Processor shall
respond, in writing, to Customer’s request within fifteen (15) Days of Processor’s receipt of
Customer’s request. If Processor declines to increase the then-effective Estimated Production
applicable to a particular Dedicated Plant or Dedicated Plants then upon thirty (30) days
notice to Processor, Customer shall have the right to terminate this Agreement with respect to
only the volume of NGLs actually produced from such Dedicated Plant(s) which is in excess of
110% of the then-effective Estimated Production of such Dedicated Plant(s).






	C.	 	Processor recognizes that, from time to time, Customer, by virtue of its agreements with
owners of a Dedicated Plant(s), or otherwise may acquire title to or obtain the right under
operating, processing or similar agreements to dispose of or market NGLs recovered from
natural gas belonging to third parties not a party to this Agreement. To the extent Customer
so acquires title or obtains such rights, and subject to the foregoing provisions of this
Section, Customer agrees to deliver and Processor agrees to receive such NGLs under the terms
and conditions of this Agreement. If any party other than Customer is entitled, under
Customer’s agreement with such other party or otherwise, to have redelivered to it Products
fractionated from such NGLs, Customer or its representative shall advise Processor each Month
of the division of such Products among all such parties, and Processor shall be entitled to
rely on such advice in making Product redeliveries, disbursements and accounting.





  Section 3.3 Customer’s Deliveries. Customer shall deliver, or cause to be
delivered, the NGLs committed hereunder to the interconnection between Processor’s (or its
Affiliate’s) facilities and each respective Dedicated Plant’s facilities (“Delivery Point”).
Customer has installed or shall cause to be installed and shall operate or cause to be operated, at
its cost and expense, any facilities or equipment necessary to deliver the NGLs from the Dedicated
Plants to the Delivery Points. Customer shall use all reasonable efforts to deliver such NGLs to
Processor at a



6









 







consistent and continuous flow over a twenty-four (24) hour period, and Processor shall use all
reasonable efforts to deliver Products at the Exchange Points at a consistent and continuous flow.
Customer shall deliver the NGLs (i) at temperatures set forth in Exhibit “Y”, and (ii) at pressures
sufficient to deliver the NGLs into Processor’s or its Affiliate’s facilities at the Delivery
Points which shall be greater than or equal to 600 psig and less than 1440 psig. Processor shall
exchange Products with Customer for the NGLs Processor receives at the applicable exchange
differentials specified below.



     Section 3.4 Linefill, Product Volumes.




	A.	 	“Linefill” shall mean a volume of Products equal to the daily mean of the volume of Products
fractionated from NGLs produced at the Dedicated Plants, times seven (7).






	B.	 	During the first Contract Year, Linefill shall be calculated using the 18 Month period
immediately prior to the Effective Date as the basis for such calculation. During the first
Contract Year, beginning on the Effective Date, Processor shall retain the first Barrels of
Products otherwise deliverable to Customer pursuant to this Agreement until the Linefill
requirement has been satisfied. After the Linefill requirement has been satisfied, Processor
shall deliver all additional Products as required pursuant to the other terms and conditions
of this Agreement.






	C.	 	At the beginning of each succeeding Contract Year, the parties will calculate a then-current
linefill requirement (the “Current Linefill Requirement”) for such Contract Year which shall
mean the daily mean of the volume of Products fractionated from NGLs produced at the Dedicated
Plants during the 12 Month period immediately prior to the Contract Year, times seven (7).
Linefill will remain unchanged unless the calculation of the Current Linefill Requirement is
at least twenty-five percent (25%) greater than, or at least twenty-five percent (25%) less
than the Linefill (a “Material Variance”). In the event of a Material Variance then: i) the
Linefill for the Contract Year under consideration will be adjusted to equal the Current
Linefill Requirement and ii) Processor shall, over the three month period immediately
following of the Contract Year under consideration, ratably redeliver on a daily basis or
ratably withhold on a daily basis the volume of Products necessary to balance the imbalances
of the Linefill provision of this exchange.






	D.	 	At all times, Processor shall retain title to and possession of a volume of Linefill as
security for Customer’s performance of its obligations herein. Except as provided for in both
the immediately preceding and next sentences of this Section, Processor shall exchange with
Customer, during the Month of delivery of NGLs by Customer, a number of Barrels of each
Product calculated according to the number of Barrels of each hydrocarbon component contained
in the NGLs delivered by Customer to Processor. For purposes of calculating the amount of
Products to be exchanged with Customer hereunder, methane delivered up to the limits set forth
in Exhibit “Y” shall be deemed to be ethane, but no credit will be given anywhere for methane
delivered in excess of the limits set forth in Exhibit “Y”, or for carbon dioxide or other
non-hydrocarbon components contained in the NGLs delivered to Processor. Upon termination of
this Agreement, and provided that Customer has performed all of its obligations herein,
Processor shall return and deliver Linefill to Customer after ninety days from the date that
Customer has performed all of its obligations herein.




7









 











     Section 3.5 Exchange Points. Subject to the other provisions of this
Agreement, Processor shall exchange Products with Customer at the following destinations
(collectively referred to as the “Exchange Points” or individually as an “Exchange Point”) as
designated from time to time by Customer, as set forth below:




(**)




	A.	 	(**) of the E/P attributable to all the Dedicated Plants shall be delivered by
Processor to Customer at Location B each Month. The remainder shall be delivered to Location
A. Notwithstanding, however, Customer shall have the right to request delivery of the lesser
of: i) (**) barrels or ii) (**) of E/P attributable to all the Dedicated Plants at Location
C. Such request from Customer must be in writing, be received at least ten (10) Days prior to
the beginning of each Month’s redeliveries, and shall contain the volume so requested.






	B.	 	The C3+ attributable to all the Dedicated Plants shall be delivered by Processor to Customer
at Location A, C and/or Location D as designated by Customer. Customer shall advise Processor
in writing of the desired Exchange Point for the C3+ due Customer at least ten (10) Days prior
to the beginning of each Month’s redeliveries. Customer may elect to have part of a Product
constituting C3+ delivered to Location A, and the remainder of such Product constituting C3+
to Location D and/or C. Notwithstanding anything to the contrary contained herein, Customer
may not: i) nominate C3+ Products other than Iso Butane and Natural Gasoline to Location D;
ii) nominate in any Month more than (**) Barrels of Iso Butane; and iii) nominate in any
Month more than (**) Barrels of Natural Gasoline.






	C.	 	During and after the Option Term, if applicable, Location B shall not be available as an
Exchange Point, and Processor shall have no obligation to make deliveries of any kind at
Location B after the Primary Term.




8









 











     Section 3.6 Exchange Differential. For each Gallon of
NGLs delivered to Processor, Customer shall pay Processor an exchange differential (“Base Exchange
Differential”) as set forth below and as adjusted pursuant to Subsection 3.6.B below:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Base Exchange
	 	 	Originating	 	 	 	 	 	Differential,
	Exchange Point Location	 	Dedicated Plant	 	Product	 	$/Gal.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	(**)	 	 	 	 	 	 	 	 	 	 	 








 




			
	*	 	Each applicable Base Exchange Differential shall be increased by (**) per Gallon after the
Primary Term, such increase to be applicable during and after the Option Term, if applicable.






	A.	 	In addition to any other fees and charges due hereunder, the parties agree that if any third
party charges a fee for receiving Products (whether in connecting pipelines or in storage
facilities), Customer shall pay such charges either by: i) reimbursing Processor therefor, or
ii) paying such charges directly to such third party; with i) or ii) being at Processor’s
option.
	 
	B.	 	Adjustment to Base Exchange Differential.






	 	(i)	 	Fuel Gas Adjustment. The Base Exchange Differential shall be
adjusted at the beginning of each Month commencing with the Month of initial
deliveries hereunder by an amount attributable to the change in Processor’s Fuel Gas
Cost incurred during the Month prior to the Month in question, and compared to the
Base Rate, all as more fully described in Appendix 1 hereto, and using the
Efficiency Levels set forth therein. The Base Rate for actual Fuel Gas Costs shall
equal the amount set forth in Appendix 1.
	 
	 	(ii)	 	Electrical Adjustment. The Base Exchange Differential shall be
adjusted at the beginning of each Month commencing with the Month of initial
deliveries hereunder by an amount attributable to the change in Processor’s actual
electrical power costs, for the Fractionator and Processor’s gathering system
connected to the Fractionator, incurred during the Month prior to the Month in
question, and compared to the Base Rate, all as more fully described in Appendix 1
hereto. The Efficiency Levels and Base Rates for actual electrical power costs
shall equal the amount set forth in Appendix 1.




9









 












	 	(iii)	 	CPIU Adjustment. The Base Exchange Differential shall be adjusted at the
beginning of each Contract Year by multiplying the Base Exchange Differential by a
fraction, the numerator of which is the Consumer Price Index for All Urban Consumers
(U.S. city average, all items, not seasonally adjusted, the “CPI”) for the last
Month of the just concluded Contract Year, and the denominator of which is CPI for
the last Month of the prior Contract Year. Notwithstanding the foregoing, if the
CPI has declined from the prior Contract Year, then the adjustment provided for in
the prior sentence shall not be performed.
	 
	 	(iv)	 	Adjusted Base Exchange Differential. The Base Exchange Differential, as
adjusted in accordance with this Section, shall be referred to herein as the
“Adjusted Base Exchange Differential.” Notwithstanding anything herein to the
contrary, in no event shall such adjustments reduce the Adjusted Base Exchange
Differential below the Base Exchange Differential. An example, for illustrative
purposes only, of the above adjustments is attached as Appendix 1.





     Section 3.7 Quality Adjustment Fees. In addition to the Adjusted Base Exchange
Differential specified above, Customer shall pay Processor the quality adjustment fees specified
below.




	A.	 	CO2 Quality Adjustment Fees. In addition to the Base Exchange
Differential, as adjusted, Customer shall pay Processor a CO2 quality adjustment fee (“Non-S&P
CO2 Quality Adjustment Fee”) for each Dedicated Plant as specified below in this Section 3.7.A
(i). For purposes of determining the Non-S&P CO2 Quality Adjustment Fees for each plant, the
term “CO2 Content” shall mean the liquid volume percentage ratio of the Carbon Dioxide (“CO2”)
to the ethane contained in the NGLs delivered hereunder. As further specified in Exhibit “Y”,
if Customer tenders NGLs to Processor with a CO2 Content of greater than two and one-half
percent (2.5%) by liquid volume of the ethane (hereinafter referred to as “Non-S&P High CO2
NGLs”), Processor shall have the right to reject such Non-S&P High CO2 NGLs from any Dedicated
Plant. In such event, Processor shall, as soon as reasonably possible, notify Customer of its
election to reject such Non-S&P High CO2 NGLs. If Processor accepts Non-S&P High CO2 NGLs, no
additional CO2 quality fees other than the fees set forth in this Section shall be charged to
Customer. Failure of Processor to exercise its right to refuse Non-S&P High CO2 NGLs from
time to time shall not constitute a waiver of said right with respect to future deliveries of
Non-S&P High CO2 NGLs pursuant to this Agreement. In addition, Customer shall use reasonable
efforts to notify Processor when they have or expect to produce or deliver Non-S&P High CO2
NGLs.





	 	 	 
	 	 	CO2 Quality Adjustment Fee, per Barrel of NGLs
	CO2 Content	 	Delivered hereunder at the Delivery Point(s).
	 
	 	 
	 
	(**) 	 








 




			
	*	 	Each applicable CO2 Quality Adjustment fee shall be increased by 1.3 times
after the Primary Term, such increase to be applicable during and after the Option
Term, if applicable.




10









 







			
	B.	 	Excess Methane Quality Adjustment Fees. If the ratio of the methane to the ethane
delivered hereunder in the NGLs is equal to or greater than (**) on a liquid
volume basis, then Processor shall charge Customer or deduct from the payments due Customer
hereunder an Excess Methane Quality Adjustment Fee equal to (**)* per Barrel of
NGLs delivered at the Delivery Point at issue. As further specified in Exhibit Y, if Customer
tenders NGLs to Processor with an methane to ethane ratio of (**) or more, Processor shall
have no obligation to accept such NGLs.




 




			
	*	 	The Excess Methane Quality Adjustment fee shall be increased by (**) after the Primary
Term, such increase to be applicable during and after the Option Term, if applicable.





     Section 3.8 Alternative Connections. Notwithstanding anything to the contrary
contained herein, if any of the Dedicated Plants are shut down or the natural gas and NGLs
previously being processed in such Dedicated Plant(s) are diverted to another gas plant(s) that is
not a Dedicated Plant (“Non-dedicated Plant(s)”), Processor (or its Affiliate) shall have the
right, at its option, to connect to the Non-dedicated Plant(s) in order to receive the NGLs
Customer or its Affiliates Own or Control that would have otherwise been extracted at the Dedicated
Plants. In the event of such a diversion, Customer shall, within thirty (30) Days prior to such
diversion, notify Processor of the diversion. If Processor wishes to exercise its option, it shall
so notify Customer, within thirty (30) Days of its receipt of Customer’s notice, of Processor’s
intent (or its Affiliate’s) to so connect to the Non-dedicated Plant(s), and shall, at Processor’s
(or its Affiliate’s) own cost and expense, connect the Non-dedicated Plant(s) as soon as is
reasonably practicable, but in no event to exceed three hundred and sixty-five (365) days. Upon
such connection, the NGLs Owned or Controlled by Customer or its Affiliates which were so diverted
and are produced at such Non-dedicated Plant(s) shall be delivered under the terms and conditions
of this Agreement. If Processor (or its Affiliate) does not so connect the Non-dedicated Plant(s)
for delivery hereunder, the NGLs Owned or Controlled by Customer or its Affiliates which were
diverted and are produced at such Non-dedicated Plant(s) shall be released from this Agreement.
Provided, however, NGLs which are diverted to another gas plant connected and flowing NGLs to
Processor or its Affiliate shall continue to be delivered hereunder pursuant to the terms and
conditions of this Agreement. The interconnection between Processor’s, or its Affiliate’s,
facilities and the Non-dedicated Plant(s) facilities shall be deemed an additional Delivery Point
under this Agreement.



ARTICLE IV

STATEMENTS AND PAYMENTS




     Section 4.1 On a Monthly basis, Processor shall prepare and transmit to Customer an invoice
reflecting exchange activity that describes receipts, deliveries, differentials, quality adjustment
fees, and other charges due and owing for NGLs and Products exchanged hereunder. Customer shall
pay the amount of the invoice within ten (10) Days after Customer’s receipt of such invoice. Such
invoice shall be transmitted by electronic mail or facsimile from Processor to Customer. Said
invoice shall be sent and be deemed received as set forth in Article VI below.



11









 





ARTICLE V

TERMINATION OF PRIOR AGREEMENTS




     Section 5.1 On the Effective Date, all previous contracts and agreements between Customer
(and/or its Affiliates) and Processor (and/or its Affiliates) pertaining to the exchange of NGLs
from the Dedicated Plants shall terminate with respect to such Dedicated Plants and be superseded
by this Agreement.



ARTICLE VI

NOTICES




     Section 6.1 Notices, demands and statements shall be in writing, directed as follows:



	 	 	 
	Processor:	 	Customer:
	ONEOK Hydrocarbon, L.P.

	 	ONEOK Texas Field Services, L.P.
	 
	 	 
	100 West Fifth Street

	 	100 West Fifth Street
	P.O. Box 871

	 	Tulsa, Oklahoma 74103
	Tulsa, Oklahoma 74102-0871
	 	 
	Attn:

	 	Attn:
	Telephone:

	 	Telephone:
	Fax:

	 	Fax:







	A.	 	Notices, demands, and statements shall be deemed received the Day after the Day of mailing if
mailed by United States express or certified mail, return receipt requested, and in all other
cases deemed received upon actual Day of delivery or, if transmitted by facsimile, on the Day
the transmission is sent, if sent during normal business hours. Either party may change its
address shown above by notifying the other party, in writing, of such change.





ARTICLE VII

GENERAL




     Section 7.1 The provisions of the attached Appendix 1, Exhibits A, B, C, D, E, and Y are
hereby incorporated in and made a part of this Agreement.



ARTICLE VIII

MEASUREMENT, SAMPLING AND ANALYSIS




     Section 8.1 The NGLs delivered hereunder shall be measured on a mass basis by means of
mass measurement stations equipped with a turbine-type liquid meter(s), continuous composite
sampler gated proportional to flow, a pressure transmitter, vibrating element densitometer, on-line
flow computer, a back pressure controller, and a temperature transmitter, all generally accepted in
the industry, and installed or caused to be installed and operated by Processor or Processor’s
designee, at Processor’s expense; however, Customer, at Customer’s costs and expense, shall provide
any necessary electrical



12









 







power to operate such meter, sampler, transmitter, and any other concomitant equipment related to the measurement
facility. The measurement facilities shall be capable of measuring the volume of NGLs delivered
hereunder up to 1,440 psig. If at any time during the term hereof a new method or technique is
developed with respect to liquid measurement, such new method or technique may be substituted for
the methods set forth in this Agreement if mutually agreed upon by the parties. Mass measurement
stations shall be installed, maintained, operated, and calibrated, and the mass of the hydrocarbon
streams calculated, in accordance with the latest edition of the American Petroleum Institute (API)
Manual of Petroleum Measurement Standards and the latest edition of the Gas Processors Association
(GPA) Standards including, but not limited to the following:




	 	•	 	API Chapter 1, Vocabulary;
	 
	 	•	 	API Chapter 4, Proving Systems: Section 2-Conventional Pipe Provers; Section 3-Small
Volume Provers;
	 
	 	•	 	API Chapter 5, Metering: Section 3-Measurement of Liquid Hydrocarbon by Turbine Meters;
Section 4-Accessory Equipment for Liquid Meters;
	 
	 	•	 	API Chapter 14, Natural Gas Fluids Measurement: Section 6-Continuous Density
Measurement; Section 7-Mass Measurement of Natural Gas Liquids; Section 8-Liquefied
Petroleum Gas Measurement;
	 
	 	•	 	GPA Standard 8182-Tentative Standard for the Mass Measurement of Natural Gas Liquids;
	 
	 	•	 	GPA Standard 2174-Obtaining Liquid Hydrocarbon Samples for Analysis by Gas
Chromatography;
	 
	 	•	 	GPA Standard 2177-Analysis of Demethanized Hydrocarbon Liquid Mixtures Containing
Nitrogen and Carbon Dioxide by Gas Chromatography;
	 
	 	•	 	GPA Standard 2186-Tentative Method for the Extended Analysis of Hydrocarbon Liquid
Mixtures Containing Nitrogen and Carbon Dioxide by Temperature Programmed Gas
Chromatography;
	 
	 	•	 	GPA Standard 2145-Physical Constants for Paraffin Hydrocarbons and Other Components of
Natural Gas;
	 
	 	•	 	GPA Standard 8173-Method for Converting Mass Natural Gas Liquids and Vapors to
Equivalent Liquid Volumes. (English Units.)
	 
	 	•	 	GPA TP-17-Table of Physical Properties of Hydrocarbons for Extended Analysis of Natural
Gases.





     Section 8.2 Customer, or its representative, may, at its option and expense, install and
maintain check measurement equipment, which shall not interfere with the use of Processor’s
measurement equipment, or that of its designee, and which installation and operation of such
equipment shall also not interfere with the flow of NGLs or other natural gas liquids through
Processor’s fractionation facility of other facilities. Customer, or its representative, shall
have access during normal business hours to observe the equipment of Processor’s measurement
stations, or that of Processor’s designees, but the reading, calibrating and adjusting thereof
shall be done only by the employees, agents, representatives, or designees of Processor.
Similarly, should Customer exercise its option to install check measurement equipment, Customer
will comply with all directions of Processor relative to environmental, health and safety while on
the premises of Processor’s fractionation, or other, facilities. Processor shall have access at all
reasonable times to the check measuring equipment, but the reading, calibrating and adjusting
thereof shall be done only by the employees, agents, or representatives of Customer. Customer may
also install, at its sole option and its sole cost and expense, equipment that will receive
electronic information generated




13









 






by Processor’s on-line flow computer. The electronic information may be either
electronic analog or streaming digital. Such electronic information obtained by Customer may be
used for internal business purposes only. Customer’s equipment will not interfere with, and will be
sufficiently isolated to protect, Processor’s equipment. Processor may also install, at its sole
option and at its sole cost and expense, equipment that will receive electronic information
generated by Customer’s on-line analyzer (Gas Chromatograph used for the analysis of demethanized
liquid hydrocarbon). The electronic information may be either electronic analog or streaming
digital. Processor’s equipment will not interfere with, and will be sufficiently isolated to
protect, Customer’s equipment. Such electronic information obtained by Processor may be used for
internal business purposes only.




     Section 8.3 Meter tickets shall be written once at the end of the accounting period.
Processor, or its designee, shall promptly provide Customer a copy of each such meter ticket. On a
scheduled Day of each Month, or at other mutually agreeable intervals, Processor, or Processor’s
designee, shall test and verify the accuracy of its measurement equipment in accordance with the
appropriate above-referenced standards. Processor, or its designee, shall give Customer notice of
the date and time of each such test sufficiently in advance to permit Customer to have a
representative present to witness such test. Processor or its designee shall promptly provide
Customer a copy of each test result. If either party to this Agreement shall notify the other
party that it desires a special test of the measurement equipment, the parties shall cooperate to
secure a prompt verification of such equipment.



     Section 8.4 Meter and Density Factor Deviation. The determined meter and density
factors shall be applied to the daily registered volume and mass for that measurement station until
the next applicable correction is determined. If any test shows the meter or density factor is not
in error more than 0.25%, such equipment will be considered as correct; but such equipment or
correction factors will be properly adjusted at once to zero error. If any test shows the meter or
densitometer factor then in use, are in error by more than 0.25% but less than 0.50%, it shall be
the decision of the concerned field personnel as to the scope and corrective action taken towards
the repair of the equipment, if any. Deviation of factor(s) greater than 0.50% will not be
acceptable and Processor shall proceed with diligence to effect the required maintenance, repairs
or replacement. If any test shows the meter or densitometer is not in error more than a total of
one-quarter of one percent (0.25%), previous readings of such equipment will be considered as
correct; but such equipment or correction factors will be properly adjusted at once to zero error.




     Section 8.4.1 Volume Adjustments. If any test shows the meter or
densitometer factor then in use is in error by more than one-quarter of one percent (0.25%),
such equipment or correction factor will be properly adjusted at once to zero error and the
previous readings of such equipment will be corrected for any prior period of inaccuracy
which is known definitely or agreed upon. For any error not known or agreed upon for the
period in which the equipment was inaccurate or out of service, the volume of NGLs shall be
determined by the first of the following methods that is applicable:




	 	A.	 	Using measurements from accurate check meters which were in operation during
the period to be corrected;
	 
	 	B.	 	by correcting the error if the percentage of error is ascertainable by
calibration test or calculation; or




14









 












	 
	 	C.	 	by a method to be agreed upon by both parties.






The correction shall be retroactive for one-half (1/2) of the period affected, but not to
exceed 16 Days.



     Section 8.5 NGLs delivered by truck, if any, shall be measured by Processor’s scales, or
that of its designee. Scales must be designed and calibrated in accordance with Industry standard
GPA 8186 (latest edition) —  Measurement of Liquid Hydrocarbons by Truck Scale. Volumes shall be
calculated in accordance with API 14.7  —  Mass Measurement of Natural Gas Liquids.



     Section 8.6 The automatic flow proportional sampling equipment installed at the Delivery
Points shall be operated by Processor or that of its designee, and shall be designed to accumulate
a representative sample proportional to the flow of the NGLs passing through the measurement
facilities, shall be designed to prevent Product vaporization, and shall be equipped with mixing
facilities to eliminate any stratification. All sampling shall be conducted in accordance with GPA
Standard 2174 (latest edition) — Obtaining Liquid Hydrocarbon Samples for Analysis by Gas
Chromatography. The sampling equipment shall collect a liquid volume to be agreed during the
sampling period. Processor or its designee shall fill sample transportation containers from the
sampler, for subsequent analysis, at a mutually agreeable time. The number of samples to be taken
may be changed by agreement in writing between Processor and Customer. Each sample collected shall
be divided into three identical samples. One sample shall be shipped to Processor’s central
laboratory in Medford, Oklahoma, for analysis. Such sample shall be analyzed in accordance with
GPA Standard 2177 (latest edition) and Processor shall provide Customer a copy of the results of
each such analysis within five (5) working Days from the end of the Month in which the production
occurred. The molecular weight and pounds per Gallon of the hexane and heavier fraction shall be
determined analytically in accordance with GPA Standard 2186 (latest edition). Customer may, at
its option, analyze one of the remaining samples to verify the accuracy of Processor’s analysis.
Unless contested by Customer, the analysis so determined by Processor shall be used as the official
analysis for accounting purposes. The remaining sample shall be retained by Processor for a period
of at least thirty (30) Days. If Customer and Processor are unable to mutually agree on the
analysis, the retained sample shall be sent to a mutually agreeable independent laboratory for
analysis. In the event the liquid volume percentage for any laboratory is less than ninety-five
(95%) percent or more than one hundred five (105%) percent of the percentage determined by
Processor for these same components, the commercial analysis shall be used rather than Processor’s
analysis, and Processor shall bear the cost of the analysis conducted by the laboratory; otherwise,
however, the analysis conducted by Processor shall be used exclusively and Customer shall bear the
cost of the commercial laboratory’s analysis. In the event that a sample is not available for a
particular period, the parties shall determine an analysis based on the most recent mutually
accepted data.



     Section 8.7 Volumes of the NGLs delivered at the Delivery Point, and each component
thereof, shall be calculated according to GPA Standard 8173 (latest edition).



15









 





ARTICLE IX

QUALITY




     Section 9.1 Customer shall deliver NGLs which (a) are merchantable, (b) meet Processor’s
specifications as such specifications may change from time to time to meet pipeline and other
downstream requirements, the most current of which are contained in Exhibit Y, and (c) are free
from dust, free of entrained water, and other impurity, as determined by Processor, in its sole
discretion. Processor shall have the right, but not the obligation, to modify such specifications
to meet or conform to downstream pipeline or market revisions or requirements with thirty (30) Days
prior notice to Customer. All NGLs shall be received subject to Processor’s inspection and
rejection. If Processor determines Customer has delivered NGLs that have contaminated the common
fungible stream, Processor may treat or otherwise dispose of the contaminated stream in any
reasonable commercial manner at Customer’s sole cost and expense. Customer shall indemnify,
reimburse and hold Processor harmless from and against all claims, penalties, treating or blending
fees, losses, costs, expenses, liabilities or damages of any kind or nature (including reasonable
attorney’s fees and court costs associated therewith) (collectively “Losses”) arising out of or
related to Customer’s delivery to Processor of NGLs not meeting the aforementioned quality
standards and/or specifications on Exhibit “Y”.



     Section 9.2 All NGLs shall be received subject to Processor’s (i) inspection, and (ii)
rejection if such NGLs fail to meet the quality specifications of this Agreement. Failure of
Processor to exercise its right of rejection from time to time shall not constitute a waiver of
said right with respect to future deliveries of NGLs pursuant to this Agreement.



     Section 9.3 All Products shall be redelivered subject to Customer’s (i) inspection, and
(ii) rejection if such Products fail to meet the quality specifications of this Agreement. Failure
of Customer to exercise its right of rejection from time to time shall not constitute a waiver of
said right with respect to future redeliveries of Products pursuant to this Agreement.



ARTICLE X

RECORDS




     Section 10.1 All accounting records and documents related to this Agreement prepared by
either party shall be retained for a period of not less than two (2) Years from the end of each
Contract Year during which such record and documents originate. As a condition precedent to either
party’s right to challenge the correctness of any invoice or payment under this Agreement, the
challenging party must, within two (2) Years following the end of each Contract Year in which any
such invoice was received by Customer or payment was made by a party, whichever is later, notify
the other party in writing of the basis for such challenge. With respect to all invoices or
payments for which such notice is not timely given, such invoices and payments shall conclusively
be presumed correct.



     Section 10.2 Subject to Section 10.1 above and upon providing fifteen (15) Days written
notice to the other party, each party shall have the right at mutually agreeable and reasonable
hours to examine copies of relevant portions of the books and records of the other to the extent
necessary to verify the accuracy of charges made, and volumes allocated hereunder. Any costs
associated with such examination shall be at the sole expense of the party requesting such
examination. Except as required by law or to enforce its rights under this Agreement, each party
agrees not to divulge any of its findings resulting from



16









 




such examination to any other person, firm, corporation or other entity, other than the parties to
this Agreement. Each party agrees to (i) be responsible for enforcing the confidentiality of such
examination and of this Agreement, and (ii) to take such action as necessary to prevent any
disclosure by any of its agents, consultants, or employees. In the event a party is compelled by
legal process to disclose any of such information, such party shall (i) provide the other party
with timely notice of such legal process so that such party may seek a protective order or other
appropriate remedy, (ii) furnish only that portion of the information to which the compelling party
is legally entitled, and (iii) make reasonable efforts to protect the confidential nature of the
information furnished.




ARTICLE XI

CUSTODY AND TITLE




     Section 11.1 Possession, title, and risk of loss to the NGLs shall pass from Customer
to Processor and vest in Processor at the inlet flange connection at the Delivery Point(s) and
possession , title, and risk of loss to the Products shall pass from Processor to Customer and vest
in Customer at the inlet flange connection at the Exchange Point(s). Upon receipt of the NGLs or
Products, as the case may be, the receiving party will be deemed to have exclusive ownership and
control of said NGLs or Product and shall be responsible for any injuries or damages caused
thereby.



ARTICLE XII

WARRANTIES, INDEMNIFICATION




     Section 12.1 Customer warrants merchantable title to the NGLs delivered to Processor
hereunder and the right to exchange the same pursuant to this Agreement, and further warrants that
all such NGLs are, at the time of delivery, free from all and charges, liens, encumbrances, defects
and adverse claims. Customer agrees to indemnify and hold Processor harmless from and against any
and all claims, causes of action, judgments or liabilities brought by or awarded to third parties
arising out of or connected with any allegation that Customer or its Affiliate did not have title
or the authority to exchange and convey title to the same or to cause such NGLs to be fractionated
and redelivered hereunder. Said indemnity includes payments of reasonable attorney’s fees and
expenses incurred in defense of said claims or causes of action. Said indemnity shall survive the
expiration or termination of this Agreement.



     Section 12.2 Processor warrants title to the Products redelivered to Customer hereunder
and the right to exchange the same pursuant to this Agreement, and further warrants that all such
Products are, at the time of redelivery, free from all charges, liens, encumbrances, defects and
adverse claims, except to the extent that Processor may breach its warranty of title by reason of
Customer breaching its warranty of title at paragraph 12.1 with respect to NGLs actually delivered
to Processor. Processor agrees to indemnify and hold Customer harmless from and against any and
all claims, causes of action, judgments or liabilities brought by or awarded to third parties
arising out of or connected with any allegation that Processor or its Affiliate did not have title
or the authority to exchange and convey title to the same or to cause such Products to be
redelivered hereunder. Said indemnity includes payments of reasonable attorney’s fees and expenses
incurred in defense of said claims or causes of action. Said indemnity shall survive the
expiration or termination of this Agreement.



17









 





     Section 12.3 Processor and Customer each assume liability for and shall indemnify, defend
and hold harmless the other party, and that party’s partners and Affiliates, and their officers,
employees, and agents, from and against all liability, loss, claims, strict liability claims,
demands, lawsuits, judgments, orders, penalties, expenses (including but not limited to reasonable
attorneys’ fees), costs, and causes of action (collectively referred to as “Claims”) asserted by
any person or entity (including but not limited to the employees of either Customer or Processor)
for personal injury or death, for compliance with environmental laws, regulations, orders, or
guidelines, or for loss or damage to property, arising from or relating to, or claimed to arise
from or relate to, the activities of the indemnifying party pursuant to this Agreement, but only to
the extent that such Claims are caused by the negligence or willful misconduct of the indemnifying
party or its agents or contractors.



ARTICLE XIII

TAXES




     Section 13.1 Customer shall assume liability for, and pay all taxes, including all new taxes
or increases in existing taxes including excise taxes (but excluding net income, excess profits, or
corporate franchise taxes) imposed by any governmental authority upon the processing, severance,
manufacture, sale, use, delivery, or receipt of the NGLs delivered or Products received. If
Customer is exempt from the payment of such taxes, fees or other charges, Customer shall furnish
Processor proper exemption certificates to cover the NGLs delivered or Products received hereunder.
Customer agrees to indemnify and hold Processor harmless from and against any and all claims,
causes of action, proceedings, judgments, interest, penalties, fees or other liabilities brought by
or awarded to third parties arising out of or connected with any taxes to be paid by Customer
pursuant to this Section. Said indemnity includes payments of reasonable attorney’s fees and
expenses incurred in defense of said claims, proceedings or causes of action.



     Section 13.2 Without limiting anything in Section 13.1 and for further clarification of
Section 13.1, with respect to the Superfund Petroleum tax imposed on natural gasoline, Customer
hereby agrees to reimburse Processor if, and to the extent, such tax is levied against the delivery
of natural gasoline pursuant to this Agreement.



ARTICLE XIV

REMEDIES FOR BREACH




     Section 14.1 If Customer is late in making any payment due hereunder, Processor may charge
Customer, and Customer shall pay, interest on late payments from the due date to the date of
payment in full at a rate equal to the then-current one-month LIBOR rate (as reported in the Wall
Street Journal), plus 1% per annum until Processor receives payment from Customer; provided,
however, such interest rate shall not exceed the maximum lawful rate permitted by applicable law.



18









 





     Section 14.2 If Customer disputes an invoiced amount, Customer shall nevertheless pay the
undisputed portion of the invoice on a timely basis, as set forth in Article IV, STATEMENTS AND
PAYMENTS. Except for the portion of any invoice disputed in good faith by Customer, if Customer
has not remedied late payments to the reasonable satisfaction of Processor within thirty (30) Days
of receipt of written notice from Processor to do so, Processor may in addition to other remedies
it may have at law or herein, and at its option, upon thirty (30) Days advance written notice to
Customer, terminate this Agreement. The election by Processor of any of the courses of action
hereto shall in no way limit any other remedies available to Processor in law or in equity.



     Section 14.3 If either party shall:




	A.	 	Voluntarily petition under or otherwise seek the benefit of any bankruptcy, reorganization,
arrangement or insolvency law; or






	B.	 	Make a general assignment for the benefit of creditors, or






	C.	 	Be adjudicated bankrupt or insolvent; or






	D.	 	Allow a receiver or trustee of the business to be appointed; or






	E.	 	Fail to perform any part of this Agreement (except where such failure is excused under the
terms of this Agreement) and upon written notice of such failure by the other party fail to
either remedy the same within thirty (30) Days of such notice or fail to take reasonable steps
within thirty (30) Days to remedy the same;




then, should any of events listed in A through E above occur, this Agreement may be terminated
forthwith by written notice at the option of the other party with such other party retaining all
its other rights and remedies at law or equity.




     Section 14.4 No waiver by either party of any breach by the other party of any of the
terms of this Agreement shall be construed as a waiver of any subsequent breach, whether of the
same or of a different term of Agreement.



ARTICLE XV

GOVERNMENT EDICTS




     Section 15.1 This Agreement is in all respects subject to all state and federal laws and
all directives, regulations and orders issued or published by any state or federal boards,
commission or agency, but nothing contained herein shall be construed as a waiver of any right to
question or contest any such order, law, rule or regulation. The parties shall be entitled to
regard all such laws, rules, regulations and orders as valid and may act in accordance therewith
until such time as the same may be invalidated by final judgment in a court of competent
jurisdiction.



19









 





ARTICLE XVI

FORCE MAJEURE




     Section 16.1 If either party is rendered unable by Force Majeure to carry out its
obligations under this Agreement (other than the obligation to make payments of monies due
hereunder), then that party shall give prompt written notice of the Force Majeure stating facts
supporting such claim of inability to perform. Thereupon, the obligation to deliver or receive the
quantities so affected shall be suspended during the continuation of an inability so caused, but
for no longer period, but this Agreement shall otherwise remain unaffected. The party claiming
Force Majeure shall use due diligence to remove the cause with all reasonable dispatch; provided,
however, that this provision shall not require the settlement of strikes, lockouts, or other labor
difficulty of the party involved, when such course is determined inadvisable by the party having
the difficulty.



     Section 16.2 The term “Force Majeure,” as employed herein, shall include strikes,
lockouts, or other industrial disturbances; wars, sabotage, blockades, insurrections, or acts of
the public enemy; epidemics, landslides, lightning, earthquakes, tornadoes, fires, storms, floods,
washouts, or other acts of God; arrests or restraints of governments and people; compliance
(voluntary or involuntary) with federal, state or local laws, rules or regulations, permits, acts,
orders, directives, requisitions, or requests of any official or agency of the federal, state, or
local governments; rationing of, shortages of, or inability to obtain or use any material or
equipment; riots or civil disturbances, fires, explosions, failures, disruptions, breakdowns, or
accidents to machinery, facilities, or lines of pipe (whether owned, leased or rented); the
testing, making repairs, alterations, enlargements or connections to machinery, facilities, or
lines of pipe (whether owned, leased or rented); the necessity to not operate, or to reduce the
operation of, equipment to protect the safety of the public and/or environment; freezing of lines;
embargoes, priorities, expropriation, or condemnation by government or governmental authorities;
interference by civil or military authorities; any inability to either tender NGLs or exchange
Products that is caused by pipeline prorationing, and any cause which is not reasonably within the
control of the party, or its Affiliates, claiming suspension.



ARTICLE XVII

INTERPRETATION




     Section 17.1 This Agreement sets forth the final and complete agreement between the
parties with respect to this subject matter and supersedes all prior contracts, understandings,
negotiations and dealings between the parties with respect to this subject matter. No modification
of, addition to, or waiver of any of the terms of this Agreement shall be binding upon either party
unless in writing and signed by an authorized representative of such party, nor shall any such
waiver constitute a continuing waiver unless expressly provided in writing by the party to be
charged with such waiver. Neither course of performance, nor course of dealing, nor usage of trade
shall be used to qualify, explain or supplement any of the terms of this Agreement. This Agreement
shall be governed exclusively according to the laws of the State of Oklahoma without giving effect
to its principles regarding conflicts of laws.



20









 





ARTICLE XVIII

ASSIGNMENT




     Section 18.1 The rights and obligations of this Agreement shall bind and inure to the
respective successors and assigns of the parties hereto. However, any assignment or attempted
assignment, except to an Affiliate, shall be void without the prior written consent of the other
party, which consent shall not be unreasonably withheld, conditioned, delayed or denied except for
reasons which may include, but not be limited to the creditworthiness of the assignee. Customer
further agrees that it and its Affiliates will not sell or assign their interest in the NGLs
subject to this Agreement or processed in the Dedicated Plants unless (i) they first obtain
Processor’s prior written consent to such sale or assignment, which shall not be unreasonably
withheld or delayed; (ii) contemporaneously with such sale or assignment, this Agreement is
assigned to such assignee; and (iii) the buyer or assignee agrees, in a writing executed by an
authorized representative of the buyer or assignee and delivered to Processor, that the NGLs so
sold or assigned shall be bound by, and subject to this Agreement. If a Dedicated Plant(s) is
transferred, assigned, conveyed or otherwise disposed of, this Agreement shall be deemed a separate
agreement covering the particular Dedicated Plant(s) so transferred, assigned, conveyed or
otherwise disposed of.



ARTICLE XIX

CREDIT




     Section 19.1 Either party may, from time to time, demand different terms of payment,
assurance of payment, assurances of performance, or other credit terms whenever such party
reasonably determines, in its sole discretion, that a material adverse change in the delivering
party’s financial condition so warrants, or in the event either party grants or attempts to grant
to any third party a security interest or lien in the NGLs or Products to be delivered and
exchanged hereunder. In any such event, and upon written notice specifying the event or events
warranting the change in terms of payment or of credit, assurance of payment, or assurances of
performance, the party may withhold exchange or delivery or refuse acceptance of deliveries pending
agreement to and performance of the revised terms, including, but not limited to, (i) prepayment,
(ii) cash on delivery, and/or (iii) the posting of an appropriate bond, irrevocable letter of
credit or other security to secure the other party’s obligations hereunder in a form and from an
institution satisfactory to the party withholding performance. If the party in question refuses to
give adequate assurance of due or future performance or payment upon demand therefor, the party
demanding such assurance may treat such failure or refusal as a repudiation of this Agreement as to
that portion not yet performed in addition to any other remedy it may have at law or at equity. In
the event that a party fails to make payment when due, files or has filed against it a petition or
complaint in bankruptcy, insolvency or receivership (defaulting party) the party to whom such
payment is owed (nondefaulting party) shall be authorized to sell any NGLs or Products, as the case
may be, the custody to which were theretofore transferred to the nondefaulting party by the
defaulting party (such as linefill, exchange imbalances, and NGLs received but not yet redelivered)
and to setoff and apply the proceeds from such sale to the extent necessary to cover the
nondefaulting party’s damages resulting from the defaulting party’s failure to make payment or
otherwise perform as herein contemplated; and to the extent of the application of the proceeds from
such sale to the nondefaulting party’s damages, the nondefaulting party shall be discharged from
its obligation to deliver or redeliver NGLs or Products to the defaulting party. Any proceeds from
such sale over and above the nondefaulting party’s damages shall be paid to the defaulting party.



21









 





ARTICLE XX

PROCESSOR’S SYSTEM SHUTDOWN




     Section 20.1 If, in the sole discretion of Processor, the continued operation of a
portion of, or all, of Processor’s system becomes uneconomic, then Processor shall have the right
to shut down such uneconomic portion of its system with at least a one (1) Year prior written
notice to Customer. For purposes of this Article, “Processor’s system” includes all NGL pipelines,
fractionation facilities, loading or unloading facilities, or other physical facilities utilized in
the performance of this Agreement. If Processor so notifies Customer and shuts down all or a
portion of Processor’s system, and declines to accept NGLs from a particular Dedicated Plant or
Dedicated Plants, then such Dedicated Plant or such Dedicated Plants shall be released from this
Agreement effective on the date that Processor so declines to accept NGLs from such Dedicated Plant
or Dedicated Plants.



ARTICLE XXI

MISCELLANEOUS




     Section 21.1 Headings, Articles and Sections. All references to “Articles”
and “Sections” herein pertain to Articles and Sections of this Agreement, unless expressly stated
otherwise. Headings are for purposes of reference only and shall not be used to construe the
meaning of this Agreement.



     Section 21.2 No Third Party Beneficiary. This Agreement is for the sole
benefit of the parties hereto and their respective successors and permitted assigns, and shall not
inure to the benefit of any other person whomsoever, it being the intention of the parties that no
third parties, other than Affiliates of the parties hereto, shall be deemed a third party
beneficiary of this Agreement or otherwise have any rights hereunder.



     Section 21.3 Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under the present or future laws effective during the term of
this Agreement, (i) such provision will be fully severable, (ii) this Agreement will be construed
and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of
this Agreement, and (iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision, there will be added automatically as a part of this Agreement a provision similar in
terms to such illegal, invalid, or unenforceable provision as may be possible and as may be legal,
valid, and enforceable. If a provision of this Agreement is or becomes illegal, invalid, or
unenforceable in any jurisdiction, the foregoing event shall not affect the validity or
enforceability in that jurisdiction of any other provision of this Agreement nor the validity or
enforceability in other jurisdictions of that or any other provision of this Agreement.



     Section 21.4 Setoffs and Counterclaims. Except as otherwise provided herein,
each party reserves to itself all rights, offsets, setoffs, counterclaims, and other remedies
and/or defenses which that party is or may be entitled to arising from or out of this Agreement or
as otherwise provided by law.



     Section 21.5 No Partnership or Association. Nothing contained in this
Agreement shall be construed to create an association, trust, partnership, principal./agent, joint
enterprise, or joint venture



22









 




relationship or impose a trust, fiduciary or partnership duty,
obligation, or liability on or with regard to either party. The parties are independent
contractors only.




     Section 21.6 No Commissions, Fees or Rebates. Except as expressly authorized
by this Agreement, no director, employee or agent of either party shall give or receive any
commission, fee, rebate, gift or entertainment of significant cost or value in connection with this
Agreement. Any representative or representative(s) authorized by either party may audit the
applicable records of the other party for the purpose of determining whether there has been
compliance with this Section.



     Section 21.7 Joint Action. The parties acknowledge and agree
that the language used in this Agreement shall be deemed to be chosen by the joint action of the
parties hereto to express their mutual intent, and no rule of strict construction against any one
party shall be applied hereto.



     Section 21.8 Safe Handling. Processor reserves the right, in its sole discretion
to (i) reject any trucks, pipelines, or storage facilities presented or suggested by Customer for
loading/unloading which would present an unsafe or potentially unsafe situation, and (ii) refuse to
load/unload, transfer, or handle any NGLs or Product under any conditions it deems unsafe or
potentially unsafe, which is caused by, including without limitation, drivers, personnel,
equipment, procedures, and/or weather conditions.



     Section 21.9 Processor’s Safety Regulations. With regards to NGLs or Products
delivered to or from Processor’s facilities, Customer agrees that it and its customers, agents and
employees will comply with Processor’s safety regulations and rules when on Processor’s premises.
Customer shall indemnify, defend and hold Processor harmless from and against any and all liability
occurring from or arising out of any non-compliance with such safety regulations and rules or the
negligence of Customer, its agents or customers. Processor shall have the right to require
Customer, its agents and/or customers to execute an access agreement with Processor for truck
loading.



     Section 21.10 Use of Products.  Customer acknowledges the hazards associated with the
handling, storage, transportation, use, misuse, disposal or subsequent processing (the “Use”) of
the Products and assumes the responsibility of advising those of its employees, agents,
contractors, and customers, who shall use, work or come in contact with the Products, of the
hazards to human health or human or environmental safety, whether such Products are used singly or
in combination with other substances or in any processes or otherwise. Customer shall indemnify,
defend and hold Processor harmless from and against any and all liability occurring from or arising
out of a breach of Customer’s obligations under this Section and from and against claims, demands
or cause of action for personal injury, damage to the environment or property arising from or
attributable to Customer’s Use of the Products.



23









 





     IN WITNESS WHEREOF, the undersigned parties have executed this Agreement in duplicate
originals as of date first set forth above.



	 	 	 	 	 	 	 	 	 
	CUSTOMER:	 	 	 	PROCESSOR:
	 
	 	 	 	 	 	 	 	 
	ONEOK TEXAS FIELD SERVICES, L.P.	 	 	 	ONEOK HYDROCARBON, L.P.
	 
	 	 	 	 	 	 	 	 
	By: ONEOK Field Services Company, its
general partner	 	 	 	By: ONEOK Hydrocarbon GP, L.L.C.,
its general partner
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ John W. Gibson 	 	 	 	By:	 	/s/ John W. Gibson 
	 

	 	 
	 	 	 	 	 	 
	Printed Name:

	 	John W. Gibson 	 	 	 	Printed Name:	 	John W. Gibson 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	President 	 	 	 	Title:	 	President 
	 

	 	 
	 	 	 	 	 	 






24









 







APPENDIX 1




An example of the computations for Fuel Gas Cost and electric power adjustments.




	 	 	 	 	 	 	 	 	 
	 	 	BASE RATE	 	CURRENT1
	Base Exchange Differential/Bbl.
	 	 	(**)	 	 	(**)
	 
	 	 	 	 	 	 	 	 
	Fractionator Costs:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fuel Gas Cost
	 	 	(**)	 	 	(**)2
	Electrical
	 	 	(**)	 	 	(**)3
	 
	 	 	 	 	 	 	 	 
	Medford Gathering Costs:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Electrical
	 	 	(**)	 	 	(**)3
	 
	 	 	 	 	 	 	 	 
	Efficiency Levels for Fuel and
Electrical:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fuel Gas Cost
	 	Frac. Electrical:	 	Gathering, Electrical:
	(**)
	 	(**)	 	(**)
	 
	 	 	 	 	 	 	 	 
	Computation of Monthly Escalation Adjustment:
	 	 	 	 	 	 	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fuel Gas Cost:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(**)
	 	 	X	 	 	$	(**)	 	 	-	 	 	$	(**)	 	 	 	=	 	 	$	(**)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Medford Electrical Cost:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(**)
	 	 	X	 	 	$	(**)	 	 	-	 	 	$	(**)	 	 	 	=	 	 	$	(**)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Medford Gath. Electrical Cost:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(**)
	 	 	X	 	 	$	(**)	 	 	-	 	 	$	(**)	 	 	 	=	 	 	$	(**)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Escalation Adjustment
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(**)	 
	Base Exchange Differential
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(**)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Base Exchange Differential
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(**)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Payable4
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$(**)	/BBL 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 








 




			
	1	 	“Current” is inserted for illustrative purposes only, and is the hypothetical
actual cost for the prior Month.
	 
	2	 	Fuel Gas Cost for the preceding Month.
	 
	3	 	Actual electrical cost for the preceding Month.
	 
	4.	 	Greater of the Base Exchange Differential or the Adjusted
Base Exchange Differential.
















 







EXHIBIT “A”




SPECIFICATIONS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Test
	80/20 ETHANE/PROPANE MIX	 	Minimum	 	Maximum	 	Procedure
	Ethane Content (Liquid Volume %)
	 	 	75	%	 	 	82	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Composition (Liquid Volume %)
	 	 	 	 	 	 	 	 	 	ASTM D-2163
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Propane
	 	 	11.5	%	 	 	25	%	 	 	 	 
	Methane and Lighter
	 	 	 	 	 	 	1.5	%	 	 	 	 
	Ethylene
	 	 	 	 	 	 	4.0	%	 	 	 	 
	Butane and Heavier
	 	 	 	 	 	 	0.5	%	 	 	 	 
	Propylene
	 	 	 	 	 	 	1.0	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Carbon Dioxide, ppm (Weight)
	 	 	 	 	 	 	1,000	 	 	ASTM D-2505
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total Sulfur, ppm (Weight)
	 	 	 	 	 	 	30	 	 	ASTM D-2784
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Corrosiveness, copper strip at 100o F
	 	 	 	 	 	No. 1	 	 	ASTM D-1838






 









 






EXHIBIT “B”




SPECIFICATIONS




HD5 Propane



Definition — Predominately a liquefiable hydrocarbon with three carbon atoms per molecule.




	 	 	 	 	 	 	 	 	 
	 	 	Test Method	 	Standard Units
	Specification Point	 	(latest issue)	 	Delivery
	(1) Vapor Pressure:
	 	ASTM D-1267	 	 	 	 
	At 100o F psig, maximum
	 	 	 	 	 	 	208	 
	 
	 	 	 	 	 	 	 	 
	(2) Volatility;
	 	ASTM D-1837	 	 	 	 
	Temperature at 95% evaporated,
F, maximum
	 	 	 	 	 	 	-37	 
	 
	 	 	 	 	 	 	 	 
	(3) Residual Matter:
	 	ASTM D-2158	 	 	 	 
	Residue on evaporation,
100o F, m1, maximum
	 	 	 	 	 	 	0.05	 
	Oil stain observed
	 	 	 	 	 	Pass	 
	 
	 	 	 	 	 	 	 	 
	(4) Composition: (Liquid Volume %)
	 	ASTM D-2163	 	 	 	 
	Propane, minimum
	 	 	 	 	 	 	90.0	 
	Propylene, maximum
	 	 	 	 	 	 	5.0	 
	Butane, maximum
	 	 	 	 	 	 	2.5	 
	 
	 	 	 	 	 	 	 	 
	(5) Corrosion:
	 	ASTM D-1838	 	 	 	 
	Copper strip at 100o F
	 	 	 	 	 	No. 1	 
	 
	 	 	 	 	 	 	 	 
	(6) Total Sulfur:
	 	ASTM D-2784	 	 	 	 
	PPM by weight, maximum
	 	 	 	 	 	 	123	 
	 
	 	 	 	 	 	 	 	 
	(7) Hydrogen Sulfide:
	 	ASTM D-2420	 	Pass	 
	 
	 	 	 	 	 	 	 	 
	(8) Dryness:
	 	ASTM D-2713	 	 	 	 
	Freeze Valve, seconds,
minimum
	 	 	 	 	 	 	60	 








 









 







EXHIBIT “C”




SPECIFICATIONS




Iso Butane I-Grade

Conway, Kansas



Definition — Predominately an isomer of normal butane.




	 	 	 	 	 	 	 
	 	 	Test Method	 	Standard Units
	Specification Point	 	(latest issue)	 	Delivery
	(1) Vapor Pressure:
	 	ASTM D-1267	 	 	 	 
	At 100° F psig, minimum
	 	 	 	 	56.0	 
	at 100° F psig, maximum
	 	 	 	 	60.0	 
	 
	 	 	 	 	 	 
	(2) Volatility:
	 	ASTM D-1837	 	 	 	 
	Temperature at 95% evaporated,
F, maximum
	 	 	 	 	16	 
	 
	 	 	 	 	 	 
	(3) Composition: (Liquid Volume %)
	 	ASTM D-2163	 	 	 	 
	Iso Butane, minimum
	 	 	 	 	95.0	 
	Propane, maximum
	 	 	 	 	3.0	 
	Normal Butane, maximum
	 	 	 	 	5.0	 
	 
	 	 	 	 	 	 
	(4) Corrosion:
	 	ASTM D-1838	 	 	 	 
	Copper strip
at 100° F
	 	 	 	No. 1
	 
	 	 	 	 	 	 
	(5) Volatile Sulfur:
	 	ASTM D-2784	 	 	 	 
	PPM by weight, maximum
	 	 	 	 	93	 
	 
	 	 	 	 	 	 
	(6) Hydrogen Sulfide:
	 	ASTM D-2420	 	Pass
	 
	 	 	 	 	 	 
	(7) Dryness:
	 	Inspection	 	 	 	 
	Free Water
	 	 	 	None







 









 






EXHIBIT “D”




SPECIFICATIONS




Normal Butane D-Grade

Conway, Kansas




	 	 	 	 	 	 	 
	 	 	Test Method	 	Standard Units
	Specification Point	 	(latest issue)	 	Delivery
	(1) Vapor Pressure:
	 	ASTM D-1267	 	 	 	 
	At 100° F psig, minimum
	 	 	 	 	36.0	 
	at 100° F psig, maximum
	 	 	 	 	38.0	 
	 
	 	 	 	 	 	 
	(2) Volatility:
	 	ASTM D-1837	 	 	 	 
	Temperature at 95% evaporated,
F, maximum
	 	 	 	 	36	 
	 
	 	 	 	 	 	 
	(3) Composition: (Liquid Volume %)
	 	ASTM D-2163	 	 	 	 
	Normal Butane, minimum
	 	 	 	 	95.0	 
	Iso Butane, maximum
	 	 	 	 	4.0	 
	Pentanes and Heavier, maximum
	 	 	 	 	2.0	 
	Propane, maximum
	 	 	 	 	1.0	 
	 
	 	 	 	 	 	 
	(4) Corrosion:
	 	ASTM D-1838	 	 	 	 
	Copper strip at 100° F
	 	 	 	No. 1
	 
	 	 	 	 	 	 
	(5) Volatile Sulfur:
	 	ASTM D-2784	 	 	 	 
	PPM by weight, maximum
	 	 	 	 	93	 
	 
	 	 	 	 	 	 
	(6) Hydrogen Sulfide:
	 	ASTM D-2420	 	Pass
	 
	 	 	 	 	 	 
	(7) Dryness:
	 	Inspection	 	 	 	 
	Free Water
	 	 	 	None
	 
	 	 	 	 	 	 
	(8) Olefins	 	Gas Chromatography 10,000 (1%)
	PPM by weight, maximum
	 	 	 	 	 	 








 









 







EXHIBIT
“E”

SPECIFICATIONS

14# Natural Gasoline

M-Grade





			
	Definition—	 	Predominately a mixture of liquefiable hydrocarbons with five to ten carbon atoms per
molecule.





	 	 	 	 	 
	 	 	Test Method 	 	Standard Units
	Specification Point	 	(latest issue)	 	Delivery
	(1) Vapor Pressure: (Reid)
	 	ASTM D-323	 	 
	At 100o F psig, minimum
	 	 	 	12.0
	at 100o F psig, maximum
	 	 	 	14.0
	 
	 	 	 	 
	(2) Distillation:
	 	ASTM D-216	 	 
	25% evaporated temp. oF, minimum
	 	 	 	140
	90% evaporated temp. oF, minimum
	 	 	 	275
	End point temp. oF, maximum
	 	 	 	375
	 
	 	 	 	 
	(3) Composition: (Liquid Volume %)
	 	ASTM D-2597	 	 
	Hexanes and Heavier, maximum
	 	 	 	50.0
	Pentanes, minimum
	 	 	 	40.0
	Butanes, maximum
	 	 	 	6.0
	Propane, maximum
	 	 	 	None  
	 
	 	 	 	 
	(4) Corrosion:
	 	ASTM D-130	 	 
	Copper strip at 100o F
	 	 	 	No. 1  
	 
	 	 	 	 
	(5) Color:
	 	ASTM D-156	 	 
	Saybolt Number, minimum
	 	 	 	+25
	 
	 	 	 	 
	(6) Doctor Test:
	 	GPA Publication 1138	 	Negative      
	 
	 	(latest edition)	 	 
	 
	 	 	 	 
	(7) Dryness:
	 	Inspection	 	 
	Free Water
	 	 	 	None







 









 





EXHIBIT “Y”

SPECIFICATIONS

DEMETHANIZED MIX

(NGLS)




	 	 	 	 	 
	 	 	 	 	Standard Units
	 	 	Test Method 	 	Receipt
	Specification Point	 	(Latest Issue)	 	Specifications
	1) Composition:
	 	 	 	 
	Carbon Dioxide
	 	GPA Pub. 2177 (latest edition)	 	(See Note 1)
	Methane, Maximum
	 	 	 	(See Note 2)
	Aromatics, Maximum
	 	 	 	10.00
	Olefins, Maximum
	 	GPA Pub. 2186  (latest edition)	 	(See Note 3)
	 
	 	 	 	 
	2) Vapor Pressure:
	 	 	 	 
	At 100oF, psig, Maximum
	 	ASTM D-1267  (latest edition)	 	600
	 
	 	 	 	 
	3) Corrosiveness:
	 	 	 	 
	Copper Strip at 100oF
	 	ASTM D-1838  (latest edition)	 	No. 1
	 
	 	 	 	 
	4) Total Sulfur:
	 	 	 	 
	PPM by Weight, Maximum
	 	ASTM D-2784  (latest edition)	 	150 (WTPL spec)
	 
	 	 	 	 
	5) Hydrogen Sulfide:
	 	 	 	 
	 
	 	ASTM D-2420  (latest edition)	 	Pass
	 
	 	 	 	 
	6) Distillation:
	 	 	 	 
	End Point at 14.7, psia, oF, Maximum
	 	ASTM D-216  (latest edition)	 	375
	(See Note 4)
	 	 	 	 
	 
	 	 	 	 
	7) Color:
	 	 	 	 
	Saybolt Number, Minimum
	 	ASTM D-156  (latest edition)	 	+25
	(see Note 4)
	 	 	 	 
	 
	 	 	 	 
	8) Dryness:
	 	 	 	 
	Free Water
	 	Inspection	 	None
	 
	 	 	 	 
	9) Product Temperature:
	 	 	 	 
	Minimum temperature, oF 
	 	40
	Product with 65 mole % or more Ethane, oF, Maximum 
	 	90
	Product with less than 65 mole % Ethane, oF, Maximum 
	 	110






Note: 1 Carbon Dioxide Maximum is 2.5 L.V.% of the Ethane content.



Note: 2 Methane Maximum is the greater of .5 L.V.% of the total components excluding N2 and CO2 or
1.5 L.V.% of the Ethane.



Note: 3 Olefin Maximum is 1.0 L.V.% (10,000 ppmw) of the total stream, C4 Olefin Maximum is .1 L.V.%
(1,000 ppmw) of the Normal Butane content.



Note: 4 Distillation and Color to be run on that portion of the mixture having a boiling point of 70oF and above at atmospheric
pressure.



Note: 5 Product shall be commercially free from sand, dust, gums, gum-producing substances, oil, glycol, inhibitors, amine, any
other contaminants, or any compound added to the product to enhance the ability to meet these specifications, and other impurities
which may be injurious to the Processor’s property or the property of third parties, or may interfere with its transmission through
the pipeline.