exv10w7



 




***Indicates
material has been omitted pursuant to a Confidential Treatment Request
filed with the Securities and Exchange Commission. A complete copy of
this agreement has been filed separately with the Securities and
Exchange Commission.


Exhibit 10.7




AMENDED AND RESTATED RGP STORAGE LEASE




     This is an Amended and Restated Storage Lease (the “Lease”) between Mont Belvieu Caverns,
LLC (“Lessor”) and Enterprise Products Operating L.P. (“Lessee”).



RECITALS:




     A. Enterprise Products Texas Operating L.P. (“EPD Texas OLP”) and Diamond-Koch, L.P. entered
into that certain RGP Storage Lease dated as of January 7, 2002 (the “Original Storage Agreement”);



     B. Lessee entered into that certain Asset Purchase and Sale Agreement with Diamond-Koch, L.P.,
D-K Diamond-Koch, L.L.C. and Diamond-Koch III, L.P., dated as of January 31, 2002 (the “Purchase
Agreement”);



     C. In connection with the Purchase Agreement, Diamond-Koch, L.P. assigned its rights as
“Lessee” under the Original Storage Agreement to Lessee.;



     D. On September 25, 2002, Lessee and EPD Texas OLP entered into an amendment to the Original
Storage Agreement;



     E. Lessee entered into a Contribution, Conveyance and Assumption Agreement by and among
Enterprise Products OLPGP, Inc., EPD Texas OLP and Mont Belvieu Caverns, LLC dated as of
___, 2007 (“Contribution Agreement”); and



     F. In connection with the Contribution Agreement, EPD Texas OLP assigned its rights as
“Lessor” under the Original Storage Agreement to Lessor.



1. Term; Quantity; Product.



For a term commencing January 1, 2007 and ending December 31, 2011 (the “Primary Term”), Lessor
leases to Lessee two (2) underground storage wells (subject to Lessee’s right and option under
Section 23 of this Lease), commonly known as Well *** and Well *** (collectively, the “Wells”), for
storage of refinery grade propylene (referred to as “Product” in this Lease) at Lessor’s
underground storage facility, located near Interstate 10 and State Highway 146 at Mont Belvieu,
Texas, subject to the terms, provisions, and conditions contained herein. Lessee may, at its
option, extend the term of this Lease for one ten (10) year term (the “Renewal Term”) by providing
Lessor written notice of its intent to renew at least one hundred eighty (180) days in advance of
the expiration of the Primary Term. The Primary Term, together with any exercised Renewal Term,
are sometimes collectively referred to herein as the “Term.”



For purposes of this Lease, a “barrel” of Product is equal to 42 U.S. gallons of equivalent liquid
volume at 60° Fahrenheit.




 









 








2. Lessor’s and Lessee’s Facilities.



The Wells are connected to Lessor’s refinery grade propylene header (“Lessor’s Header”). The Wells
are also connected to Lessee’s refinery grade propylene header (“Lessee’s Header”) by which Lessee
takes Product from storage and Lessor’s Header for consumption in Lessee’s P/P splitter facilities.
All Product delivered by Lessee into storage or by Lessor out of storage must be delivered by
pipeline to either Lessor’s Header or Lessee’s Header, and all such deliveries shall be deemed a
delivery into or out of storage for the purposes of computing all applicable charges under this
Lease. The lines from Lessor’s Header and the meters located thereon by which Lessor delivers
Product from Lessor’s Header to the Wells or Lessee’s Header shall, during the Term, be dedicated
to the sole use of delivering Product to the Wells and to Lessee’s Header. Notwithstanding Lessee’s
lease of Well *** and Well ***, should Lessor later desire to make a different well available to
Lessee, Lessor shall have the right to do so on the condition that the new well is
suitable for Product storage, has substantially the same capacity, has substantially the same
receipt and redelivery capability to and from existing pipelines and storage, and Lessor pays for
all costs and expenses required to make such well available, including costs associated with
pumping Lessee’s Product to the new well. Lessor shall minimize any disruption of Lessee’s rights
under this Agreement arising from Lessor’s election to make a different well available. From and
after the time when Lessee’s Product has been removed from the Well that is being replaced, the
remaining Well and the newly available well shall be defined herein as the “Wells.”



In the event of damage to a Well by fire or other casualty, which damages render the Well incapable
of storing Product, Lessor shall be under no obligation to rebuild the damaged Well or any
facilities appurtenant to it to the extent it is not commercially reasonable to do so. Lessee
shall be immediately notified of any such damage and Lessor shall keep Lessee informed of Lessor’s
plans with respect to rebuilding or repair or with respect to providing the alternatives provided
for below. In the event of damages making it commercially unreasonable to rebuild, Lessor may
(subject to the remainder of this paragraph) terminate this Lease as to such Well; provided, that
Lessor shall take commercially reasonable steps as soon as commercially practicable at Lessor’s
cost and expense to either (i) increase the receipt and redelivery capabilities of the remaining
Well (if any) to provide Lessee with substantially the same receipt and redelivery capabilities as
Lessee had prior to such damage, or (ii) make an alternate well available to Lessee (which shall
thereafter become a “Well” hereunder) to provide Lessee with substantially the same receipt and
redelivery capabilities as Lessee had prior to such damage. As between Lessor and Lessee, control
of Lessor’s facilities will rest exclusively with Lessor.




3. Product Specifications.



Product delivered by Lessee into storage or by Lessor from storage must meet Lessee’s
specifications set out in Exhibit “A” attached hereto and incorporated herein by this reference.
These specifications may be amended by Lessee at any time during the Term, with Lessor’s prior
written consent, which consent shall not be unreasonably withheld.




2









 








4. Product Deliveries and Receipts.



It shall be Lessee’s responsibility to make all arrangements necessary to deliver Product for
storage and to receive Product from storage at either Lessor’s Header or Lessee’s Header, and to
pay any charges imposed by any party (other than Lessor or its Affiliates) for the collection,
transfer, and injection of Lessee’s Product, if any, to or from the Delivery Point. The flow rates
into and out of storage are subject to Lessor’s scheduling and operational restrictions.




5. Delivery Restrictions; Allocation.



Deliveries into and out of storage may be made only at rates consistent with Lessor’s scheduling
and operational restrictions. If Lessor’s scheduling or operational restrictions will not permit
all of the parties (including Lessor) storing any types of products in any of Lessor’s storage
wells to deliver or receive the volumes of Product requested, then Lessor may allocate among such
parties Lessor’s available flow rates in a fair and equitable manner.




6. Sampling.



Lessor shall have the right (but not the obligation) to sample all Product to be delivered for
storage and, notwithstanding any other provision herein, may refuse to accept delivery of any
Product if the Product does not meet the specification provided for in Section 3 of this Lease or,
if in Lessor’s opinion, satisfactory control of Product specifications will not be maintained
during delivery. At Lessor’s request, Lessee shall provide Lessor access to the Product to be
delivered for the purpose of sampling and provide Lessor representative samples of such Product.




7. Product Measurements.



Measurement of Product into and out of storage shall be made in accordance with the procedures and
methods set out in Exhibit “B” attached hereto and incorporated herein by this reference. Subject
to Section 8 below, whenever a Well is physically emptied of Product, Lessor shall determine, from
available measurement and sampling records, the overages and/or underages of Product. Except for
losses which are the responsibility of Lessor pursuant to Section 8 of this Lease, Lessor shall
adjust Lessee’s account to reflect any overages and/or underages of Product. All Product gains and
losses incurred while the product is under Lessor’s control shall be for the account of Lessee
except as noted in Section 14. Lessor shall submit to Lessee monthly stock reports supported with
appropriate receiving and shipping information showing movements of Product into and out of storage
and the amount of Product remaining in storage.




8. Title, Risk of Loss.



Title to Lessee’s Product shall remain at all times with Lessee. Lessor shall be responsible for
the loss of or damage to such Product only when and to the extent such loss or damage is determined
by a court of competent jurisdiction to have been directly caused by the negligence of Lessor, its
employees and agents.




3









 








9. Storage Fees.



Subject to change as provided for in Section 23 of this Lease, Lessee agrees to pay Lessor for the
storage, handling, and services of Lessor an annual rental as set forth in Exhibit “C” attached
hereto and incorporated herein by this reference. Other than the annual rental contained in
Exhibit C and fees for alternate storage during Workover Periods as provided for in paragraph 10,
Lessee shall not be responsible for any additional fees for the services provided by Lessor,
including but not limited to throughput or excess storage fees. All of Lessee’s Product must be
removed from storage no later than the last day of the Term of this Lease, subject to the payment
of accrued rental and other charges and the other terms, provisions, and conditions of this Lease.
In lieu of annual rental payable during the Term, the rate for storage of any Product remaining in
storage past the last day of the term of this Lease shall be *** ($***) per barrel per month or any
portion thereof, payable in advance on the first day of each month in the same manner and at the
same place as set forth in Section 12.




10. Well Workovers.



Notwithstanding anything to the contrary in this Leases once every five (5) years
(unless otherwise required more often under applicable law, rule, or regulation), Lessor may
designate a period of time as it or its contractors may reasonably require (“Workover Period”)
during which Lessor shall have the opportunity to inspect the Wells, and to conduct any other
operations as may be required by applicable law, rule, or regulation. Accordingly, Lessee shall
cause all of its Product to be removed from the Well at issue prior to the first day of the
Workover Period. Lessor shall make a reasonable effort to provide Lessee with as much advance
notice as possible of the upcoming workover and need to empty the subject Well, and to coordinate
with Lessee (or Lessee’s designated representative) the scheduling of such Workover Period. If
requested by Lessee, Lessor shall make reasonable efforts, at Lessee’s sole cost, to make alternate
storage for Product available to Lessee during such Workover Period for storage charges payable by
Lessee to Lessor that are substantially in accordance with the storage charges then being charged
by Lessor to its olefin storage customers. Except as required by applicable law, rule or
regulation, Lessee shall not be required to lease alternate storage for a period exceeding the
Workover Period. In no event shall a Workover Period be in effect for both Wells at the same time.




11. Taxes.



Lessee shall pay all taxes, if any, levied or assessed on the Product stored hereunder. In the
event it becomes necessary for Lessor to pay any such tax, Lessee shall immediately reimburse
Lessor for such amount upon receipt of notice of payment.




12. Payment Terms.



The total annual rental for storage is payable in equal monthly installments during the Term, each
of which installments is due and payable in advance by Lessee at Lessor’s address set forth on the
face of each invoice on or before the first day of each month. Lessor will invoice Lessee each
month for monthly rentals during the Term.




4









 








13. Lessor’s Lien.



Lessor shall have a lien on all Product of Lessee stored hereunder to cover any accrued and unpaid
amounts payable hereunder and may withhold delivery of any such Product until such accrued and
unpaid amounts are paid. If any such amounts remain unpaid for more than thirty (30) days after
they accrue, Lessor may sell said Product at a public auction at the offices of Lessor in Houston,
Harris County, Texas, on any day not a legal holiday and not less than forty-eight (48) hours after
publication of notice in a daily newspaper of general circulation published in Baytown, Texas, said
notice giving the time and place of the sale and the quantity and Product to be sold. Lessor may
be a bidder and a purchaser at such sale. From the proceeds of such sale, Lessor may pay itself
all charges lawfully accruing and all expenses of such sale, and the net balance may be held for
whomsoever may be lawfully entitled thereto.




14. Product Losses.



Product is not insured by Lessor against loss or damage however caused, and any insurance thereon
must be provided and paid for by Lessee. Lessor’s liability, if any, for loss or damages to the
stored Product shall be limited to the market value of Product which shall be equal to the sum of:
(i) the highest USGC refinery grade propylene weighted average spot monthly reference price as
published in the last issue of the month in which the Product was delivered of Chemical Marketing
Associates Inc.’s Monomers Market Report for the contained propylene in the Product and the (ii)
the NON TET average Mont Belvieu, Texas Propane price as reported by OPIS as published in the last
issue of the month in which the Product was delivered for no contained propylene components, or at
Lessor’s option, replacement of such lost or damaged Product in kind. If the refinery grade
propylene contract price is subsequently changed in the next month in the CMAI Monomers Market
Report due to late price settlement, then that price shall be the market value; provided, however,
should Lessee purchase property/casualty insurance to cover such storage risk of loss or damage,
however caused, then Lessee shall cause each of its insurers to waive its rights of subrogation
and, for itself, waive rights of recovery of any self-funded retentions and/or deductibles against
Lessor, its affiliates, employees and agents.




15. Force Majeure.



In addition to the provisions of Section 8, Lessor shall not be responsible to Lessee for any loss
of Lessee’s Product resulting directly or indirectly from acts of God or other causes beyond the
reasonable control of Lessor, or for any loss to Lessee resulting from delays in returning Lessee’s
Product when requested, or for failure of Lessor to perform its obligations hereunder, due,
directly or indirectly, to Force Majeure.



As used in this Section 15, “Force Majeure” means acts of God; storm; earthquake; accidents; acts
of the public enemy or terrorists, including threats thereby; malicious mischief; emergency or
scheduling and operational restrictions; rebellion; insurrections; sabotage; invasion; epidemic;
strikes; lockouts or other industrial disturbances; war, declared or undeclared; riot or civil
commotion; wind; hurricane; hail; lightning; fire; flood; explosion; compliance with acts, rules,
regulations, or orders of federal, state, or local government, any agency thereof or other
authority having or purporting to have jurisdiction; mechanical failures or similar causes not
within Lessor’s reasonable control and not due to Lessor’s fault or negligence. If the duration of
any




5









 




Force Majeure event lasts longer than thirty (30) days, the fees provided for under Sections 9 and
10 of this Lease shall be suspended starting after the thirty (30) days has passed until the Force
Majeure condition is corrected, and if the Force Majeure condition continues for one hundred twenty
(120) days, Lessee, on sixty (60) days prior written notice (given on or after expiration of such
one hundred twenty (120) day period) may terminate this Lease; provided that if the Force Majeure
condition only partially prevents Lessor’s performance hereunder, such fees shall only be reduced
in an amount that is proportional to the degree to which Lessor’s performance hereunder is
prevented by the Force Majeure condition, and this Lease shall not be subject to termination on
account thereof. Lessor will work expeditiously to correct any Force Majeure condition. The term
of this Lease shall not be extended by the duration of any Force Majeure. When claiming Force
Majeure, Lessor shall notify Lessee immediately by telephone, and confirm same in writing, giving
reasonable detail regarding the type of Force Majeure and its estimated duration. The settlement
of differences with workers shall be entirely within the Lessor’s discretion.




16. Indemnity.



REGARDLESS OF THE LEGAL THEORY OR THEORIES ALLEGED INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE
(WHETHER SOLE, JOINT, OR CONCURRENT) OF ANY THIRD PARTY, LESSEE HEREBY AGREES TO INDEMNIFY, DEFEND,
AND SAVE HARMLESS LESSOR, ITS PARENT COMPANY, PARTNERS (GENERAL OR LIMITED), MEMBERS, SUBSIDIARIES,
AFFILIATES, SUCCESSORS, AND ASSIGNS, INCLUDING ANY OFFICER, DIRECTOR, EMPLOYEE, OR AGENT OF ANY
SUCH ENTITY (HEREINAFTER COLLECTIVELY CALLED “INDEMNITEE”) FROM AND AGAINST ANY CLAIM, DEMAND,
CAUSE OF ACTION, DAMAGE, FINE, PENALTY, LOSS, JUDGMENT, OR EXPENSE OF ANY KIND OF ANY PARTY
(HEREINAFTER COLLECTIVELY CALLED “LIABILITY”), INCLUDING ANY EXPENSES OF LITIGATION, COURT COSTS,
AND REASONABLE ATTORNEY’S FEES, RESULTING FROM, ARISING OUT OF, OR CAUSED BY THE DELIVERY OR
RECEIPT OF ANY PRODUCT BY LESSEE OR LESSEE’S AGENT, CONTRACTOR, OR CARRIER WHICH IS CONTAMINATED,
ALLEGED TO HAVE BEEN CONTAMINATED OR OTHERWISE FAILS TO MEET THE SPECIFICATIONS SET FORTH HEREIN,
OR CAUSES OR IS ALLEGED TO HAVE CAUSED PROPERTY DAMAGE, INCLUDING ENVIRONMENTAL DAMAGES OR INJURY
OR DEATH TO LESSOR, INDEMNITEE OR THIRD PARTIES, EXCEPT TO THE EXTENT SUCH LIABILITY IS DIRECTLY
CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE.



LESSOR AGREES TO INDEMNIFY, DEFEND, AND SAVE HARMLESS LESSEE FROM CLAIMS OR DEMANDS OF THIRD
PARTIES FOR INJURIES OR DAMAGES RESULTING FROM LESSOR’S OPERATIONS IN THE STORAGE AND HANDLING OF
PRODUCT WHILE THE SAME IS IN LESSOR’S CUSTODY OR CONTROL INCLUDING, WITHOUT LIMITATION, THAT
PORTION OF ANY CLAIMS OR DEMANDS ATTRIBUTABLE TO LESSOR WHICH IS CAUSED BY THE NEGLIGENCE OF
LESSOR, ITS AGENTS OR EMPLOYEES JOINTLY OR CONCURRENTLY WITH THE NEGLIGENCE OF LESSEE, ITS AGENTS,
EMPLOYEES, OR REPRESENTATIVES, OR A THIRD PARTY.




6









 








17. Claims; Limitations.



Notice of claims by Lessee for any liability, loss, damage, or expense arising out of this Lease
must be made to Lessor in writing within ninety-one (91) days after the same shall have accrued.
Such claims, fully amplified, must be filed with Lessor within said ninety-one (91) days and unless
so made and filed, Lessor shall be wholly released and discharged therefrom and shall not be liable
therefor in any court of justice. No suit at law or in equity shall be maintained upon any claim
unless instituted within two (2) years and one (1) day after the cause of action accrued. There
are no third party beneficiaries of this Lease.



IN NO EVENT SHALL LESSOR OR LESSEE BE LIABLE TO THE OTHER FOR ANY PROSPECTIVE OR SPECULATIVE
PROFITS, OR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, WHETHER
BASED UPON CONTRACT, TORT, STRICT LIABILITY, OR NEGLIGENCE, OR IN ANY OTHER MANNER ARISING OUT OF
THIS LEASE, AND EACH OF LESSOR AND LESSEE HEREBY RELEASES THE OTHER FROM ANY CLAIM THEREFOR.




18. Notice.



All notices, demands, requests, and other communications necessary to be given hereunder shall be
in writing and deemed given if personally delivered, forwarded by facsimile (with proof of
transmission and answer-back capability), or mailed by either certified mail, return-receipt
requested, or sent by recognized overnight carrier to the respective party at its address below:



If to Lessor:



Mont Belvieu Caverns, LLC

P.O. Box 4324

Houston, Texas 77210-4324

Attn: Director — Hydrocarbon Storage

Telephone: (713) 381-6554

Fax: (713) 381-6960



 



If to Lessee:



Enterprise Products Operating L.P

P. O. Box 4324

Houston, Texas 77210-4324

Attn: Vice President — Petrochemicals

Telephone: (713) 381-6510

Fax: (713) 381-6655




19. Assignment/Sublease.



Neither party shall assign any portion of its rights or obligations under this Lease without the
prior written consent of the other, which consent shall not be unreasonably withheld; provided,




7









 







however, either party may assign or sublease this Lease to its parent corporation, a subsidiary, or
a wholly-owned affiliate, without the consent of the other party, provided that it remains
primarily obligated hereunder. This Lease shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.




20. Rules and Regulations.



This Lease and the provisions hereof shall be subject to all applicable state and federal laws and
to all applicable rules, regulations, orders, and directives of any governmental authority, agency,
commission, or regulatory body in connection with any and all matters or things under or incident
to this Lease.




21. Entire Agreement.



This Lease embodies the entire agreement between Lessor and Lessee and there are no promises,
assurances, terms, conditions, or obligations, whether by precedent or otherwise, other than those
contained herein. No variation, modification, or reformation hereof shall be deemed valid until
reduced to writing and signed by the parties hereto.




22. Governing Law.



This Lease shall be governed, construed, and enforced in accordance with the laws of the State of
Texas irrespective of the residence, place of business, or domicile of the parties hereto or the
place of execution by any party hereto,




23. Lessee’s Option to Cancel/Modify.



Notwithstanding anything to the contrary contained in this Lease and according to the terms and
conditions of this Section 23, at any time during the Term Lessee shall have the right and option
to cause Lessor to add additional receipt and redelivery capabilities to one of the Wells (as
chosen by Lessor) that will allow Lessor to increase the receipt and redelivery capabilities of the
subject Well. The Well to be modified as chosen by Lessor shall hereinafter be called the “Modified
Well” and the other Well shall hereinafter be called the “Remaining Well.” To exercise its right
and option under this Section 23, Lessee shall give written notice to Lessor no less than one (1)
year prior to the date Lessee desires the additional capability to be in place and operational,
including in its notice its desired receipt and redelivery capabilities. Upon receipt of such
notice, Lessor shall use all commercially reasonable efforts to design and engineer the
improvements, which may include improvements that are required to Lessor’s facilities apart from
the subject Well (including but not limited to the brine system, fresh water systems, or power
systems) necessary to comply with Lessee’s request, subject to Lessor’s right to require Lessee to
advance the reasonable, estimated cost of such design and engineering work (Lessee further agreeing
to reimburse Lessor upon receipt of Lessor’s invoice therefor for any reasonable and necessary
design and engineering costs that exceed any funds advanced by Lessee based upon Lessor’s original
estimate). Lessor shall endeavor to complete such design and engineering work as soon as reasonably
practicable and will provide the plans and a cost estimate based upon Lessor’s best reasonable
judgment upon completion of such design and engineering work. Should Lessee desire Lessor to
complete such work, Lessee shall notify Lessor in writing and shall, in its notice, agree to
reimburse Lessor monthly during the progress of such work for the




8









 




costs incurred by Lessor in completing the work. Subject to any applicable regulatory requirements
(such as permitting requirements), Lessor will proceed with all reasonable diligence to complete
the work.



When the work is complete and the Modified Well is ready for operation, Lessee shall move all of
its Product to the Modified Well and Lessee’s lease of the Remaining Well will be cancelled, which
cancellation shall be effective as of the last day of the calendar month during which all of
Lessee’s Product was removed from the Remaining Well (the “Cancellation Date”).



Commencing on the first day following the Cancellation Date (the “New Term Inception Date”), the
Term of this Lease shall be extended for 120 months after the New Term Inception Date (the “New
Term”). For purposes of Exhibit “C”, the Base Annual Rent shall, starting with the New Term
Inception Date, be one-half (1/2) of the amount of the Adjusted Annual Rent in effect at the time
of the New Term Inception Date. The annual adjustments called for under Exhibit “C” shall
thereafter take place on the anniversary of the New Term Inception Date.



In addition to Lessee’s option with respect to causing Lessor to add additional receipt and
redelivery capabilities to one of the Wells, Lessee shall be entitled to request that Lessor (a)
grant right-of-way across Lessor’s property on such terms and at such rates as Lessor is then
normally charging for right-of-way for the laying of an additional Product line to allow Lessee to
receive additional Product through Lessor’s Product header into the Wells or into Lessee’s header;
(b) construct additional connections on Lessor’s Product header, if space allows; and (c) if space
does not allow such additional connections, construct a new Product header and associated piping
and improvements to allow an additional Product connection for the Wells, Lessor shall not
unreasonably delay or deny approval of Lessee’s requests. If approved according to the foregoing,
the work associated with the request shall proceed in the same manner and fashion and subject to
the same terms described above with respect to work to increase the receipt and redelivery
capabilities of a Well.




24. Default.



A party will be in default if it: (a) breaches this Lease, and the breach is not cured within
thirty (30) days receiving written notice of such default (or alleged default) from the other party
specifying the nature of the breach; (b) becomes insolvent; or (c) files or has filed against it a
petition in bankruptcy, for reorganization, or for appointment of a receiver or trustee. In the
event of default, the non-defaulting party may terminate this Lease upon notice to the defaulting
party. For the avoidance of doubt, Lessor’s failure to perform any of the services for any reason
other than force majeure will be deemed a breach of this Lease to which subsection (a) of this
Section 24 applies.




9









 









DATED this ___day of ___, 2007.



	 	 	 	 	 
	 	LESSOR



MONT BELVIEU CAVERNS, LLC

 	 
	 	By:  	 	 
	 	 	NAME: 	 
	 	 	TITLE: 	 
	 
	 	 


LESSEE



ENTERPRISE 

PRODUCTS OPERATING L.P.

 	 
	 	By:  	Enterprise Products OLPGP, Inc.,
its general partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	By:  	
 	 
	 	 	NAME: 	 
	 	 	TITLE: 	 
	 




10









 





EXHIBIT “A”




	 	 	 	 	 
	Analysis	 	Units	 	Process Specification
	Propylene
	 	LV % min	 	60
	 
	 	 	 	 
	Ethane & Lighter
	 	LV%max	 	2,25
	Butane & Heavier
	 	LV%max	 	1.00
	 
	 	 	 	 
	Methyl Acetylene
	 	 	 	Report
	Propadiene
	 	 	 	Report
	 
	 	 	 	 
	Carbon Monoxide
	 	wt. ppm. Max	 	3
	Carbon Dioxide
	 	wt ppm. Max	 	10
	 
	 	 	 	 
	Total Sulfur
	 	wt, ppm. Max	 	40
	 
	 	 	 	 
	Arsine
	 	wt ppm. Max	 	0.7
	 
	 	 	 	 
	Water
	 	 	 	No Free Water
	 
	 	 	 	 
	Methanol
	 	wt. ppm. Max	 	4
	 
	 	 	 	 
	Copper Strip
	 	 	 	1






NOTES ON TEST METHODS:



Method numbers listed above, beginning with the letter “D” are American Society for Testing and
Materials (ASTM) Standard Test Procedures. The most recent year revision for the procedures will be
used.



At present, standard (ASTM) test procedures do not exist for the determination of sulfur, arsine,
water and methanol in propylene.





	(1)	 	For sulfur analysis use D3246, D4045. Alternatively, oxidation/ultraviolet fluorescence
detection can be used.






	(2)	 	For arsine, use OOP Method 834-82, a charcoal adsorption/atomic absorption solution of silver
diethyldithiocarbarmate in pyridine and analyzed by ultraviolet-visible spectrophotometry.







	(3)	 	Methanol content should be determined by water extraction/gas Chromatography.








11









 








EXHIBIT “B”




REFINERY GRADE PROPYLENE




MEASUREMENT FOR STORAGE AND PIPELINE MOVEMENTS




I. Scope




     The following shall apply to the measurement and the measurement procedures to be used
for pipeline movements and storage of refinery grade propylene (hereinafter referred to as “RGP”).
Whenever used herein the term “Operator” shall mean Lessor and the term “Non-Operator” shall mean
Lessee.



II. General




     Unless otherwise agreed, all quantities of RGP will be measured in mass units by a mass
measurement station. The basis of all custody accounting will be in mass units of RGP. The quantity
determined by measurement shall be thousand pound units (MLB) to the nearest 100 pounds (0.1 MLB).



     For purposes of tariffs and thruput commitments in which thruput is expressed in barrels at
60°F., the conversion of mass units to volume units will be based upon the procedures
shown in Section V.



III. Measurement Equipment and Operation




     The measurement equipment shall be turbine meters, densitometer transducers,
microprocessor density flow computers, composite samplers and other necessary components, or as
otherwise agreed. Densitometers and any connection lines will be insulated.



12









 





     The measurement stations will be operated in accordance with API MPMS Chapter 4, Sections I
and 5; Chapter 5, Sections 1, 3, and 4; and Chapter 14, Section 6. Pressure pulsations created by
any pumping facilities will be dampened by the owner of said pumping facilities such that accuracy
of measurement by the metering facilities will not be affected. Meter tickets will be
written for each shipment and not less than each month at 7:00 a.m., on the first day of each
month.



     A “Meter Factor” will be determined by Operator at approximately monthly intervals. The
apparatus and methods specified in API Chapter 4 will be used in determining such tests
coincidental with the meter factor determination. Calibration of density and computing equipment
will also be checked monthly or more frequently if mutually agreed. Densitometer calibration will
be by means of a Pycnometer Gravitometer Prover per API Standard 14.6 as amended from time to time.
When requested, Operator will provide 24-hour notice to the Non-Operator of the date and
approximate hour of each such test. Non-Operator will be entitled to have representatives present
to witness such tests and to verify Operator’s calibrations, Non-Operator may request special tests
of the measurement equipment in addition to regular tests. The expense of such special tests will
be borne by the requesting party, unless such tests show the measurement equipment to be in error
by an amount such that the total measurement error exceeds one-fourth of one percent (0.25%), in
which case the expense of the special test will be borne by Operator.



13









 





     In determining the “Meter Factor,” the proving will consist of at least five consecutive
prover runs through the mechanical displacement prover after the system has been stabilized to
operating conditions. A prover run in a bi-directional prover shall be a round trip. Live single
passes in a low volume prover shall be considered one run. The total meter pulses accumulated per
run will not vary from the total meter pulses accumulated in another run by more than .05%, for
example, .0005 x meter pulses ~ maximum variation allowed in accumulated pulses between runs. The
meter factor will be calculated using the arithmetical average of the accumulated pulses from the
required runs.



     The Meter Factor f M.F.”) will be computed as follows:



     M.F.= Prover Volume (corrected to operating conditions)



     Meter Registration (corrected to operating conditions)


The meter factor will be calculated to the nearest one hundred-thousandth (.00001) and rounded off
to the nearest ten-thousandth (.0001).




     If any test shows that the measurement equipment is not in error more than one-fourth 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. If any test shows
that the metering equipment and factors then in use are in. error so that the total measurement
error exceeds one-fourth of one percent (0.25%), the equipment or correction factors 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



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which is known definitely or agreed upon. In case said period is not known definitely, or
agreed upon, such correction will be for a period covering the last half of the time elapsed since
the date of the last equipment test.




     If, at any time during the delivery of said RGP, the measurement equipment becomes
inoperative, the quantity delivered for periods during which the measurement equipment is
inoperative will be estimated on the basis of the best information available. Data from the nearest
measurement station will be preferred.



IV. Sampling and Analysis Procedures




     Composition of the deliveries of RGP will be determined in order to establish the volume
percent of the various hydrocarbons contained therein.



     The automatic sampling equipment installed at Operator’s header facilities shall be operated
by Operator. Operator may install a continuous sampling system designed to accumulate a
representative sample proportional to flow of the RGP passing through the measurement facilities,
the system shall be designed to prevent RGP vaporization, and shall be equipped with mixing
facilities to eliminate stratification. Non Operator may, at its option and expense, install and
maintain a product sampling and component analysis system that is identical to Operator’s.



     If the sampling system requires the removal and the division of the sample (RGP) from the
automated sampling equipment (for the purpose of laboratory analysis), the removal and division
shall be conducted in accordance with GPA Publication 2174, latest



15









 




edition, Method for Obtaining Hydrocarbon Fluid Samples Using a Floating Piston Cylinder.




     The frequency of samples to be taken may be changed by agreement in writing between Operator
and Non Operator. Each sample collected shall be divided into three identical samples.



     One sample shall be analyzed by Non Operator in accordance with GPA Standard 2177, latest
edition, and Non Operator shall provide Operator a copy of the results of each such analysis within
five (5) working days from the end of the month in which the sample was analyzed.



     Operator may, at its option, analyze one of the remaining samples to verify the accuracy of
Non Operator’s analysis. The remaining (3rd) sample division shall be retained by Non Operator for
a period of at least thirty days.



     Unless contested by Non Operator, based on the sample provided by Operator or sampling from
Non Operator’s installed check measurement equipment, the analysis so determined by Operator shall
be used as the official analysis for accounting purposes.



     If Operator and Non Operator 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 Molar percentages for these same components as determined by the independent
laboratory fall outside the reproducibility statement limits, as published in GPA Standard 2177
(latest edition), of the percentages as determined by Operator for



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these same components, the commercial analysis shall be used rather than Operator analysis,
and Operator shall bear the cost of the analysis conducted by the laboratory, otherwise, however,
the analysis conducted by Operator shall be used exclusively and Non Operator 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 applicable to the operating
conditions of the facility during the period in question.



V. Conversion from Mass Unit to Barrels




     Where it is necessary to convert from MLB to barrels, the conversion will be based on the
procedures of GPA Publication 8173-76 or API Chapter 14.4, or the latest revision thereof unless
otherwise agreed between the parties, to determine the volume attributable to the mass involved in
the transaction. (See Schedule I for sample calculations.)



VI. Calculation Procedure for Component Invoicing and Record keeping




     Component quantities for record keeping and invoicing purposes will be provided by Operator.



     The constants to be used in the calculations will be those listed in the latest edition of GPA
Publication 2145, “Standard Table of Physical Constants of Paraffin Hydrocarbons and Other
Components of Natural Gas,” the latest edition of the GPA Engineering Data Book, Section 23, or the
latest revisions thereof.



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EXHIBIT “C”





	(A)	 	For the first 12 months of the Term, Lessee agrees to pay Lessor annual rent in the amount
of *** ($***) (the “Base Annual Rent).






	(B)	 	The Base Annual Rent shall remain in effect through December 31, 2007. Effective January
1, 2008 and for the following 12 months ending December 31, 2008 ( a “Lease Year”),
and all subsequent Lease Years, the Base Annual Rent shall be revised annually based
on a seasonally adjusted implicit price deflator in order to determine a new annual rent known
as the “Adjusted Annual Rent.” The Adjusted Annual Rent shall be determined in accordance with
the following formula by multiplying the percentage change (rounded to the 4th
decimal place) between the Base Index and the Annual Index (as those terms are defined below)
by the prior Lease Year’s Annual Rent, For purposes of this Lease, the “Base Index” is the
final seasonally adjusted implicit price deflator figure for the calendar year 2005 under the
Gross Domestic Product column of the “Implicit Price Deflators for Gross Domestic Product”
table (2000=100), and the “Annual Index” is the final seasonally adjusted implicit price
deflator figure for the calendar year ending immediately before the Lease Year for which the
adjustment is being determined, said figure being in the same column, table and survey as the
Base Index.




The Adjusted Annual Rent shall be rounded off to the nearest dollar and shall become effective
on the first day of each Lease Year. In no event will the Annual Adjusted Rent ever be less than
the Base Annual Rent.



For example, in calculating the Adjusted Annual Rent, which shall apply under this Lease,
assume at the time of the first adjustment the Base Index is 113.2 and the Annual Index is 115.2.
Under these facts the Adjusted Annual Rent for the 2nd Lease Year would be as follows:




           115.2/113.2 = 1.0177 (percentage change)

           (1.0177 ) X ($***) = $*** (Adjusted Annual Rent)





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