Document:

exv10w6

 

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

Exhibit 10.6

FORM OF STORAGE LEASE

(Enterprise Fractionation Plant)

     This is a Storage Lease (the “Lease”) between MONT BELVIEU CAVERNS, LLC with an address
at P.O. Box 4324, Houston, Texas 77210-4324 (“Lessor”) and ENTERPRISE PRODUCTS OPERATING, L.P.,
(“Joint Owner”), with an address at P.O. Box 4324, Houston, Texas 77210-4324.

1. Term; Quantity; Product.

For an initial term commencing January 1, 2007 and ending December 31, 2016 (the “Initial Term”),
Lessor leases to Joint Owner storage space of up to *** barrels of Raw Mix, and *** barrels of
purity ethane, propane, commercial ethane, isom grade butane (“Isom Grade”), isobutane, natural
gasoline, and petrochemical grade natural gasoline (collectively referred to as “Product” in this
Lease) at Lessor’s underground storage wells, located near Interstate 10 and State Highway 146 at
Mont Belvieu, Texas, subject to the terms, provisions, and conditions contained herein. For
purposes of this Lease, a “barrel” of Product is equal to 42 U.S. gallons of equivalent liquid
volume at 60° Fahrenheit.

Each twelve (12) month period between January 1 and the following December 31 shall be referred to
herein as a “Lease Year”. This Lease shall continue from year to year following the expiration of
the Initial Term, unless either party terminates this Lease by giving written notice to the other
party at least ninety (90) days prior to the beginning of any ensuing Lease Year.

2. Lessor’s Facilities.

Lessor operates storage wells in which various types of products are stored other than the types of
Product covered by this Lease. Lessor’s storage wells are connected to centrally located pipeline
header facilities operated by Lessor on its property in the vicinity of said storage wells. All
Product delivered by Joint Owner into or by Lessor out of storage must be delivered by pipeline to
such header facilities, 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. As between Lessor and Joint
Owner, control of Lessor’s facilities will rest exclusively with Lessor.

3. Product Specifications.

Each Product delivered by Joint Owner into storage or by Lessor from storage must meet the
respective specifications set out in Exhibit “A” attached hereto and made a part hereof. Lessor
reserves the right to modify, add to, or revise such specifications at any time and from time-to
time upon giving not less than thirty (30) days prior written notice.

(Form 1506-Multiple Product)

1

 

4. Isom Grade Butane; Analysis and Certification.

Prior to each delivery of Isom Grade by or on behalf of Joint Owner into storage hereunder, Joint
Owner agrees to certify to Lessor the quality of the butane to be delivered and to furnish to
Lessor a laboratory analysis of the butane to be delivered to Lessor for storage at least
forty-eight (48) hours prior to delivery. The laboratory analysis shall be in form satisfactory to
Lessor, shall employ the test methods specified on Exhibit “A”, and shall show the levels, if any,
of the components listed on Exhibit “A”. If (i) a laboratory analysis required under this
paragraph is not timely received by Lessor; (ii) the laboratory analysis received is not in a form
acceptable to Lessor; or (iii) the laboratory analysis shows the butane to be delivered does not
meet the specifications for Isom Grade, Lessor has the right to refuse receipt of the butane.
Also, if, at any time during Joint Owner’s delivery of Isom Grade, the butane being tendered ceases
to conform to the specifications for Isom Grade, Lessor will stop receiving the butane tendered for
storage, until such time as the tendered product can be shown to again meet the Isom Grade
specification.

5. Product Deliveries and Receipts.

It shall be Joint Owner’s responsibility to make all arrangements necessary to deliver Product for
storage and to receive Product from storage at Lessor’s header facilities, and to pay any charges
imposed by any party for the collection, transfer, and injection of Joint Owner’s Product to such
header facilities for delivery into storage or from such header facilities for delivery out of
storage under this Lease. The flow rates into and out of storage are subject to Lessor’s
scheduling and operational restrictions.

6. Delivery Restrictions; Allocation.

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 as determined by Lessor.

7. Commingling; Sampling.

Lessor shall have the privilege of commingling Joint Owner’s Product with Product of other parties
and is not obligated to redeliver to Joint Owner the identical Product received from Joint Owner.
Lessor shall have the right to sample all Product to be delivered for storage and may refuse to
accept delivery of any Product if the Product does not meet the required specifications or, if in
Lessor’s opinion, satisfactory control of Product specifications will not be maintained during
delivery. At Lessor’s request, Joint Owner shall provide Lessor access to the Product to be
delivered for the purpose of sampling and provide Lessor representative samples of such Product.

At Lessor’s sole discretion, Lessor shall have the option to blend Joint Owner’s Product that fails
to meet the Product specifications with Product within Lessor’s facilities to get Joint Owner’s

(Form 1506-Multiple Product)

2

 

Product back on specification, or to deliver Joint Owner’s off specification Product to Lessor’s
off specification Product storage well (the “Slop Well”) where the Product will reside until such
time as Lessor arranges for the Product in the Slop Well to be sent to one of the Mont Belvieu
fractionators for fractionation.

Lessor will continue to blend the off specification Product, or to make deliveries to the Slop
Well, only until the Product once again meets the specifications in the attached Exhibit “A”, or
until such time as Lessor is notified by Joint Owner that other delivery arrangements have been
made for the Product and the delivery of off specification Product to Lessor’s facilities stops.

The fee for receiving off specification Product into Lessor’s facilities will be *** per barrel on
each barrel received. Joint Owner will share in any losses of Product from the Slop Well in
proportion to the amount of the off-specification Product that was delivered into the Slop Well
since the last time the Slop Well was emptied for Joint Owner’s account hereunder.

If Joint Owner elects to have the Products redelivered to Lessor’s facilities following
fractionation, all such receipts shall be done under the terms of this Lease.

If it is necessary for Lessor to pay any charges, including but not limited to, fractionation fees,
when the off specification Product is delivered from the Slop Well and fractionated, Joint Owner
will immediately upon receipt of an invoice reimburse Lessor for any such charges.

8. Product Measurement.

     (a) Ethane

Measurement of commercial ethane and purity ethane into and out of storage shall be made in
accordance with the procedures and methods set out in Exhibit “B”. All Product gains and losses
incurred while the Product is under Lessor’s control shall be for the account of Joint Owner except
as noted in Section 12. For the purpose of this subparagraph 8 (a), ethylene and up to 1.5%
methane shall be considered ethane. Any methane in excess of 1.5% will not be balanced. Lessor
shall return to Joint Owner a volume of commercial ethane containing a quantity of ethane equal to
the quantity of ethane contained in the commercial ethane delivered by Joint Owner for storage
hereunder. If Lessor returns commercial ethane to Joint Owner containing more or less propane than
was contained in the commercial ethane delivered by Joint Owner for storage hereunder, Lessor and
Joint Owner shall quarterly balance any overages or underages of propane by the party having the
overage delivering to the other party a volume of propane equal to the overage, which propane shall
meet the specifications set out in Exhibit “A”. Lessor shall submit to Joint Owner monthly stock
reports supported with appropriate receiving and shipping information showing movements of
commercial ethane and purity ethane into and out of storage and the amount of commercial ethane and
purity ethane remaining in storage. All propane required to be delivered to Lessor shall be
delivered at the expense of Joint Owner to Lessor’s pipeline header facilities at Mont Belvieu,
Texas, via one of the pipelines connected to such facilities. All propane required to be delivered
to Joint Owner shall be delivered at the expense of Lessor to its pipeline header facilities at
Mont Belvieu, Texas. Propane may be delivered at

(Form 1506-Multiple Product)

3

 

any other delivery point mutually acceptable to the parties. For the purpose of this subparagraph 8
(a) propylene and butane shall be considered propane.

     (b) Other Products.

Measurement of propane, Isom Grade, natural gasoline, and isobutane into and out of storage shall
also be made in accordance with the procedures and methods set out in Exhibit “B”. All Product
gains and losses incurred while the Product is under Lessor’s control shall be for the account of
Joint Owner except as noted in Section 15. Lessor shall submit to Joint Owner monthly stock
reports supported with appropriate receiving and shipping information showing movements of propane,
Isom Grade, natural gasoline, and isobutane into and out of storage and the amount of propane, Isom
Grade, natural gasoline, and isobutane remaining in storage.

     (c) Carbon Dioxide.

Joint Owner will not be credited for any volume of carbon dioxide held in storage for Joint Owner
by Lessor.

     (d) Percentages.

Any references to percentages herein shall mean liquid volume percent.

9. Title; Risk of Loss.

Title to Joint Owner’s Product shall remain at all times in Joint Owner. Notwithstanding the
return guarantee set out in subparagraphs 8 (a) and 8 (b) above, Lessor shall be responsible for
the loss of or damage to such Product only when and to the extent such loss or damage is caused by
the negligence of Lessor, its employees and agents.

10. Storage Fees.

Joint Owner agrees to pay Lessor for the storage, handling, and services of Lessor an annual rental
as set forth in the attached Schedule 1. All minimum rentals are payable in full regardless of
whether or not Joint Owner actually uses the amount of storage made available hereunder. All of
Joint Owner’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. 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 14.

11. Overstorage Fees

An overstorage charge of *** per barrel shall be charged for the total number of barrels stored by
Joint Owner at the end of any month that exceeds the amount of storage space leased for each

(Form 1506-Multiple Product)

4

 

specific Product hereunder. Any excess storage acquired in this manner shall be understood to be
temporary only, and shall not constitute a waiver of Lessor’s right to restrict storage to the
amount leased hereunder at any time thereafter, and Joint Owner shall promptly remove any such
excess Product upon Lessor’s written request.

12. Taxes.

Joint Owner 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, Joint Owner shall immediately
reimburse Lessor for such amount upon receipt of notice of payment.

13. Payment Terms.

The total minimum annual rental for storage is payable in equal monthly installments during the
term hereof, each of which installments is due and payable in advance by Joint Owner at Lessor’s
address set forth on the face of each invoice on or before the first day of each month. Lessor
will also invoice Joint Owner each month for all applicable throughput fees, overstorage fees and
other fees or charges during the term of this Lease.

14. Warehouseman’s Lien.

Lessor shall have a lien on all Product of Joint Owner 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.

15. Product Losses.

Any loss of Product from Lessor’s storage wells for which Lessor is not responsible shall be
apportioned among all of the parties storing such Product in such storage wells on the date of loss
in proportion to the amount of Product each such party has in storage on such date. 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 a maximum of the monthly average NON TEPPCO price on the Texas Gulf Coast for
such Product on the date of such loss or damage as reported or published by Oil Price Information
Service (“OPIS”) (the “Published Price”), or at Lessor’s option, replacement of such lost or
damaged Product in kind within forty-five (45) days of such loss. If the Published Price is not
reported or published by OPIS for the date in question, the parties will endeavor to promptly agree
upon a fair market value.

(Form 1506-Multiple Product)

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16. Force Majeure.

Lessor shall not be responsible to Joint Owner for any loss of Joint Owner’s Product, for any loss
to Joint Owner resulting from delays in returning Joint Owner’s Product when requested, or for
failure of Lessor to perform its obligations hereunder, due, directly or indirectly, to acts of God
or other causes beyond the reasonable control of Lessor including, without limitation, storm;
earthquake; accidents; acts of the public enemy; emergency or unplanned scheduling and operational
restrictions; rebellion; insurrections; sabotage; invasion; epidemic; strikes; lockouts or other
industrial disturbances; war; riot; hurricane; 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 due
to Lessor’s fault or negligence. The term of this Lease shall not be extended by the duration of
any force majeure, nor shall Joint Owner be excused from making any payment due under this Lease.
When claiming force majeure, Lessor shall notify Joint Owner 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.

17. Indemnity.

REGARDLESS OF THE LEGAL THEORY OR THEORIES ALLEGED INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE
(WHETHER SOLE, JOINT, OR CONCURRENT) OF ANY THIRD PARTY, JOINT OWNER 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 OF ANY
PRODUCT BY JOINT OWNER OR JOINT OWNER’S AGENT, CONTRACTOR, OR CARRIER WHICH IS CONTAMINATED OR
OTHERWISE FAILS TO MEET THE SPECIFICATIONS SET FORTH HEREIN, EXCEPT TO THE EXTENT SUCH LIABILITY IS
DIRECTLY CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE.

18. Claims; Limitations.

Notice of claims by Joint Owner 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

(Form 1506-Multiple Product)

6

 

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.

In no event shall Lessor be liable to Joint Owner 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 Joint Owner hereby releases Lessor from any claim therefor.

19. 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 Joint Owner:

Enterprise Products Operating

P.O. Box 4324

Houston, TX. 77210-4324

Attn: Mr. Rob Schaefer

Telephone: (713) 381-6588

Fax: (713) 381-381-7962

20. Assignment.

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,
however, either party may assign this Lease to its parent corporation, a wholly-owned subsidiary,
to an affiliate, to a successor who acquires all, or substantially all, of the assets of the
assigning party, or, if a party hereto is a limited partnership, to one or its limited partners or
the members of its general partner, 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.

(Form 1506-Multiple Product)

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21. 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.

22. Entire Agreement.

This Lease embodies the entire agreement between Lessor and Joint Owner 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.

23. Governing Law.

THIS LEASE AND THE RIGHTS AND DUTIES OF THE PARTIES ARISING OUT OF THIS LEASE SHALL BE GOVERNED BY
AND CONSTRUED, ENFORCED, AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW
PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF TEXAS.

WITH RESPECT TO ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS LEASE, EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS (AS
APPLICABLE) LOCATED IN HARRIS COUNTY, TEXAS, AND TO ALL COURTS COMPETENT TO HEAR AND DETERMINE
APPEALS THEREFROM, AND WAIVES ANY OBJECTIONS THAT A SUIT, ACTION OR PROCEEDING SHOULD BE BROUGHT IN
ANOTHER COURT AND ANY OBJECTIONS TO INCONVENIENT FORUM.

THE PARTIES FURTHER AGREE THAT, IN THE EVENT OF A LAWSUIT ARISING OUT OF THE PERFORMANCE OF THIS
LEASE, THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER ITS REASONABLE ATTORNEYS’ FEES AND COURT
COSTS, INCLUDING FEES FOR EXPERT WITNESSES, FOR PROSECUTING OR DEFENDING ANY SUCH LAWSUIT FROM THE
PARTY NOT PREVAILING.

24. Other Provisions.

This Lease may be executed in counterparts, each of which shall be deemed to be an original and all
of which, taken together shall constitute the same agreement.

This Lease shall be construed as jointly drafted by the parties according to the language as a
whole and not for or against any party.

(Form 1506-Multiple Product)

8

 

In the event one or more of the provisions contained in this Lease shall be held to be invalid or
legally unenforceable in any respect under applicable law, the validity, legality or enforceability
of the remaining provisions hereof shall not be affected or impaired thereby. Each of the
provisions of this Agreement is hereby declared to be separate and distinct.

Nothing contained in this Lease shall be construed to create an association, trust, partnership, or
joint venture or impose a trust, fiduciary or partnership duty, obligation, or liability on or with
regard to any party.

This Lease is for the sole benefit of the parties 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 person shall be deemed a third party beneficiary of this Lease.

25. Default.

A party will be in default if it: (a) breaches this Lease, and the breach is not cured within
thirty (30) days after 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 25 applies.

26. Early Termination.

This Lease may be terminated and canceled by Lessor if not accepted and returned to Lessor by Joint
Owner within fifteen (15) days from the date hereof.

(Form 1506-Multiple Product)

9

 

DATED this                                          day of                           
                                  , 2007.

	 	 	 	 	 	 	 
	 	 	LESSOR	 	 
	 
	 	 	 	 	 	 
	 	 	MONT BELVIEU CAVERNS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	NAME:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	TITLE:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	JOINT OWNER	 	 
	 
	 	 	 	 	 	 
	 	 	ENTERPRISE PRODUCTS OPERATING L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By: Enterprise Products OLPGP, Inc., its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	NAME:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	TITLE:	 	 	 	 
	 

	 	 	 	 	 	 

(Form 1506-Multiple Product)

10

 

Other Joint Owners:

	 	 	 	 	 	 	 
	 	 	DUKE ENERGY NGL SERVICES L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	Printed Name:	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	BURLINGTON RESOURCES INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	Printed Name:	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

(Form 1506-Multiple Product)

1

 

SCHEDULE 1

STORAGE LEASE

(ENTERPRISE FRACTIONATION PLANT)

STORAGE FEES.

(A) For the first Lease Year, Lessee shall pay Lessor annual rent at the rate of *** (the “Base
Storage Rental Rate”) for the volume leased under this Lease.

Commencing with the first day of the second Lease Year, and on the first day of each subsequent
Lease Year, the annual rent shall be adjusted as follows: one-half of the Base Storage Rental Rate
shall remain fixed, and one-half shall be revised annually based on a seasonally adjusted implicit
price deflator in order to determine a new rental rate known as the “Adjusted Rental Rate.” The
Adjusted Rental Rate shall be determined in accordance with the following formula:

*** per barrel + [*** per barrel X Annual Index / Base Index] = Adjusted Rental Rate

	 	 	 	 	 
	 

	 	Where:
	 	“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
	 
	 	 	 	 
	 

	 	 	 	“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 Rental Rate shall be rounded off to the fourth decimal place and shall become
effective on the first day of each Lease Year. In no event will the Adjusted Rental Rate ever be
less than the Base Storage Rental Rate.

For example, in calculating the Adjusted Rental Rate, which shall apply under this Lease, assume in
the second Lease Year the Base Index is 113.2, and the Annual Index is 115.2. Under these facts
the Adjusted Rental Rate would be as follows:

*** per barrel + [*** per barrel X 115.2 / 113.2] =

*** per barrel + [*** per barrel X 1.0177] =

*** per barrel + *** per barrel = *** per barrel

     The Adjusted Rental Rate of *** would become effective on the first day of the second Lease Year
and would continue until the last day of the second Lease Year, with a new
Adjusted Rental Rate to apply starting on the first day of the third Lease Year, and so on.

Schedule 1 (Enterprise Frac Plant)

 

 

The “Implicit Price Deflators for Gross Domestic Product” are available in the Survey of Current
Business as published monthly by the Bureau of Economic Analysis of the U.S. Department of
Commerce. Subscriptions to the Survey of Current Business are maintained by the Government
Printing Office, an agency of the U.S. Congress. If said Survey fails to publish a necessary price
deflator figure or ceases to be published, any replacement index published by or on behalf of the
United States government shall be substituted, and if there is no such substitute index, the
parties shall promptly agree on a replacement survey or index or, if they cannot agree, either
party shall be entitled to submit the matter of a replacement index to arbitration under the
commercial arbitration rules of the American Arbitration Association.

Schedule 1 (Enterprise Frac Plant)

 

 

EXHIBIT A

Reissue Date: 1-20-99

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

SPECIFICATIONS FOR RAW MIX

	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS
	Composition:
	 	GPA 2186	 	 
	Carbon Dioxide
	 	 	 	0.35  Liq. Vol% max. (1)
	Methane
	 	 	 	1.5  Liq. Vol%, max. (1)
	Olefins
	 	 	 	1.0  Liq. Vol%, max. (2)
	Aromatics
	 	 	 	1.0  wt.% max. (3) 
	Oxygenates
	 	UOP-845	 	10   ppm wt. max. (4)
	Fluorides
	 	UOP-619	 	1.0   ppm wt. max. (5)
	Vapor Pressure at 100°F
	 	ASTM D-1267	 	600 psig max.
	Corrosion, Copper Strip
	 	ASTM D-1838	 	No.1
	Volatile Sulfur
	 	ASTM D-4045	 	150 ppm wt.  max. (6)
	Hydrogen Sulfide
	 	ASTM D-2420	 	Pass
	Carbonyl Sulfide
	 	ASTM D-5623	 	15  ppm wt. max. (7)
	Distillation:
	 	 	 	 
	End Point
	 	ASTM D-86	 	375 °F  max.
	Water Content
	 	VISUAL	 	No Free Water
	Color, Saybolt Number
	 	ASTM D-156	 	Plus 25  min.

NOTES ON TEST METHODS: Method number 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.

	1.	 	Of the Ethane content.
	 
	2.	 	Propylene limited to 5.0 L.V.% max. of contained propane.

Butylene limited to 0.35 L.V.% max. of contained butanes.

Butadiene limited to 0.01 L.V.% max. of contained butanes.
	 
	3.	 	Or 10% max. in contained gasoline.

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

	4.	 	Of the Normal Butane content.
	 
	5.	 	Specification applies to all halides although test method is specific to fluorides. The test
method variance will allow acceptance of levels up to 1.4 ppm wt.
	 
	6.	 	ASTM D-3246 paragraph 4.2. On LPG total volatile sulfur is measured on an injected gas
sample; for LPG’s a liquid sample must be used to measure total sulfur, ASTM D-2784.
	 
	7.	 	In contained propane.

NOTE: Processor reserves the right to reject any Raw Mix having other product characteristics not
defined above that
may render a purity product potentially unacceptable.
 

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Bob Sanders
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Reissue Date: 5/1/02

EXHIBIT A

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

E/P MIX (COMMERCIAL ETHANE)

(Ethane/Propane)

	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS
	Methane
	 	ASTM D-2163	 	1.5   Liq. Vol.% max.
	Carbon Dioxide
	 	ASTM D-2504	 	1000 ppm  wt. max.
	Ethane
	 	ASTM D-2163	 	75.0 - 82.0 Liq. Vol.%
	Propane
	 	ASTM D-2163	 	25.0 Liq. Vol.% max. 
	Ethylene
	 	ASTM D-2163	 	4.0 Liq. Vol.% max.
	Butanes & Heavier
	 	ASTM D-2163	 	0.8 max. (1)
	Total Sulfur
	 	ASTM D-4045	 	30 ppm wt. max.
	Corrosion, Copper Strip
	 	ASTM D-1838	 	No. 1

NOTE 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.

Contaminants -The specification defines only a basic purity for this product. This product is to
be free of any contamination that might render the product unusable for its commonly used
applications. Specific contaminants include (but are not limited to) dirt, rust, scale, and all
other types of solid contaminants, caustics, chlorides, heavy metals, and oxygenates.

	1.	 	Anything heavier than C3 will be valued as Propane.

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Phil Winter
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Reissue Date: 5/1/02

EXHIBIT A

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

STANDARD GRADE ISOBUTANE

	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS
	Propane & Lighter
	 	ASTM D-2163	 	3.0 Liq. Vol. % max.
	Isobutane
	 	ASTM D-2163	 	96.0 Liq. Vol. % min.
	Normal Butane & Heavier
	 	ASTM D-2163	 	4.0 Liq. Vol. % max.
	Total Sulfur
	 	ASTM D-4045	 	140 ppm wt. max.
	Water Content
	 	VISUAL	 	No Free Water
	Vapor Pressure at 100° F
	 	ASTM D-1267	 	70 psig max.
	Corrosion, Copper Strip
	 	ASTM D-1838	 	No.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.

Contaminants -The specification defines only a basic purity for this product. This product is to
be free of any contamination that might render the product unusable for its commonly used
applications. Specific contaminants include (but are not limited to) dirt, rust, scale, and all
other types of solid contaminants, caustics, chlorides, heavy metals, and oxygenates.

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Bob Sanders
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Reissue Date: 5/1/02

EXHIBIT A

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

ISOM GRADE NORMAL BUTANE

RECEIPT SPECIFICATIONS ANALYSIS

	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS
	Propane & Lighter
	 	ASTM D-2163	 	0.35  Liq. Vol.% max.
	Isobutane
	 	ASTM D-2163	 	6.0  Liq. Vol.% max.
	Normal Butane
	 	ASTM D-2163	 	94.0  Liq. Vol.% min.
	Pentanes & Heavier
	 	ASTM D-2163	 	1.5  Liq. Vol. % max.
	Hexanes & Heavier
	 	ASTM D-2163	 	0.050  Liq. Vol. % max.
	Total Olefins
	 	ASTM D-2163	 	0.35  Liq. Vol. % max.
	Butadiene
	 	ASTM D-2163	 	0.01  Liq. Vol. % max.
	Total Oxygenates
	 	UOP-845	 	50.0 ppm wt. max.
	Methanol
	 	UOP-845	 	50.0 ppm wt. max.
	IPA & Heavier Alcohols
	 	UOP-845	 	5.0 ppm wt. max.
	MTBE & Other Ethers
	 	UOP-845	 	2.0 ppm wt. max.
	Other Oxygenates
	 	UOP-845	 	5.0 ppm wt. max.
	Total Sulfur
	 	ASTM D-4045	 	140 ppm wt. max.
	Water Content
	 	VISUAL	 	No  Free  Water
	Fluoride
	 	UOP-619	 	1.0 ppm wt. max.
	Vapor Pressure at 100°F
	 	ASTM D-1267	 	50 psig max.
	Volatile Residue:
	 	 	 	 
	Temperature @ 95% evaporation
	 	ASTM D-1837	 	+36°F max.
	Corrosion, Copper Strip
	 	ASTM D-1838	 	No.1

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

NOTE 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.

Contaminants -The specification defines only a basic purity for this product. This product is to
be free of any contamination that might render the product unusable for its commonly used
applications. Specific contaminants include (but are not limited to) dirt, rust, scale, and all
other types of solid contaminants, caustics, chlorides, heavy metals, and oxygenates.

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Phil Winter
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Reissue Date: 7-10-02

EXHIBIT A

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

PETROCHEMICAL GRADE GASOLINE PRODUCT

	 	 	 	 	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS	 	 	 	 
	Normal Butane & Lighter
	 	ASTM D-2177	 	6.0 Liq. Vol.% max.
	Total Sulfur
	 	ASTM D-3120	 	1000 ppm wt. max.
	Water Content
	 	VISUAL	 	No  Free  Water
	Vapor Pressure at 100°F
	 	ASTM D-323	 	14.0 RVP max.
	End Point
	 	ASTM D-86	 	375°F max.
	Color, Saybolt Number
	 	ASTM D-156	 	+25  min.

NOTE 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.

Contaminants -The specification defines only a basic purity for this product. This product is to
be free of any contamination that might render the product unusable for its commonly used
applications. Specific contaminants include (but are not limited to) dirt, rust, scale, and all
other types of solid contaminants, caustics, chlorides, heavy metals, and oxygenates.

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Phil Winter
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Reissue Date: 5/1/02

EXHIBIT A

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

PROPANE

	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS
	Vapor Pressure, PSIG @ 100°F
	 	ASTM D-1267	 	208 max.
	Volatile Residue:
	 	 	 	 
	Temperature @ 95% evaporation
	 	ASTM D-1837	 	-37°F max.
	Corrosion, Copper Strip
	 	ASTM D-1838	 	No. 1
	Total Sulfur
	 	ASTM D-4045	 	123 ppm wt. max.
	Propylene
	 	ASTM D-2163	 	5.0 Liq. Vol.% max.
	Propane
	 	ASTM D-2163	 	90.0 Liq.  Vol.% min.
	Butanes & Heavier
	 	ASTM D-2163	 	2.5 Liq.  Vol.% max.
	Water Content
	 	VISUAL	 	No Free Water
	Residual Matter
	 	 	 	 
	Residue on evaporation
	 	 	 	 
	of 100 ml. max.
	 	ASTM D-2158	 	0.05 ml.
	Oil Stain Observation
	 	 	 	Pass

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.

Contaminants -The specification defines only a basic purity for this product. This product is to
be free of any contamination that might render the product unusable for its commonly used
applications. Specific contaminants include (but are not limited to) dirt, rust, scale, and all
other types of solid contaminants, caustics, chlorides, heavy metals, and oxygenates.

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Bob Sanders
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Reissue Date: 5/01/02

EXHIBIT A

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

PURITY ETHANE

	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS
	Methane
	 	ASTM D-2163	 	3.0 Liq. Vol.% max.
	Ethane & Ethylene
	 	ASTM D-2163	 	95.0 Liq. Vol.% min.
	Propane & Heavier
	 	ASTM D-2163	 	3.5 Liq. Vol.% max.
	Corrosion, Copper Strip
	 	ASTM D-1838	 	No.  1
	Total Sulfur
	 	ASTM D-4045	 	30 ppm wt. max.
	Water Content
	 	VISUAL	 	No Free Water
	Carbon Dioxide
	 	ASTM D-2504	 	1000 ppm wt. in Liq. max.

NOTES ON TEST METHODS: Method number 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.

Contaminants -The specification defines only a basic purity for this product. This product is to
be free of any contamination that might render the product unusable for its commonly used
applications. Specific contaminants include (but are not limited to) dirt, rust, scale, and all
other types of solid contaminants, caustics, chlorides, heavy metals, and oxygenates.

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Bob Sanders
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Reissue Date: 5/1/02

EXHIBIT A

	 	 	 
	

	 	ENTERPRISE PRODUCTS OPERATING L.P.

NATURAL GASOLINE

	 	 	 	 	 
	COMPONENT	 	TEST METHODS	 	SPECIFICATIONS
	Normal Butane & Lighter
	 	GPA-2177	 	6.0 Liq. Vol.% max.
	Total Sulfur
	 	ASTM D-3120	 	1000 ppm wt. max.
	Water Content
	 	VISUAL	 	No  Free  Water
	Vapor Pressure at 100°F
	 	ASTM D-323	 	14.0 RVP max.
	End Point
	 	ASTM D-86	 	375°F max.
	Corrosion,
	 	 	 	 
	Copper Strip
	 	ASTM D-130	 	No.  1
	Doctor Test
	 	ASTM D-4952	 	Negative
	 
	 	or   GPA 1138	 	 
	Color, Saybolt Number
	 	ASTM D-156	 	+25  min.

NOTE 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.

Contaminants -The specification defines only a basic purity for this product. This product is to
be free of any contamination that might render the product unusable for its commonly used
applications. Specific contaminants include (but are not limited to) dirt, rust, scale, and all
other types of solid contaminants, caustics, chlorides, heavy metals, and oxygenates.

	 	 	 	 	 	 	 
	Specification Committee	 	 	 	 
	Approval:

	 	Wayne Mullins
	 	Bob Sanders
	 	James Gernentz
	 

	 	 
	 	 
	 	 
	 

	 	Quality Control
	 	Business Management
	 	Operations

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

8/3/05 revision

EXHIBIT “B”

EPOLP MEASUREMENT PROCEDURES

ARTICLE I

METERING EQUIPMENT

Section 1.1 General.

	A.	 	Natural gas liquids or other products delivered or received by EPOLP shall be measured by
either volumetric or mass measurement procedures using a turbine or Coriolis meter.
	 
	B.	 	Chemical grade propylene, refinery grade propylene, propane, isobutane, normal butane,
commercial butane and natural gasoline shall be measured by mass or volumetric measurement
procedures.
	 
	C.	 	Raw mix, ethane, ethane propane mix, and butane gasoline mix shall be measured by mass
measurement procedures.
	 
	D.	 	Polymer grade propylene shall be measured utilizing volumetric or mass measurement procedures
and API Manual of Petroleum Measurement Standards, (API MPMS) Chapter 1.3.3.2
to determine calculated density and report mass.
	 
	E.	 	The measuring station shall be installed in such a manner that a minimum back-pressure of 50
psig above the product vapor pressure at maximum operating temperature is maintained at all
times. Measurement accuracy shall not be impeded by the effects of pulsation created by pumps
or other sources.
	 
	F.	 	All equipment employed in metering and sampling shall be approved as to the type, materials
of construction, method of installation, and maintenance by all parties involved in the
custody transfer of products. Due consideration shall be given to the operating pressure,
temperature, and characteristics of the product being measured.
	 
	G.	 	Reference to any API, ASTM, GPA or similar publication shall be deemed to encompass the
latest edition, revision or amendments thereof.

Section 1.2 Meters.

	A.	 	Turbine meters shall be installed and operated in accordance with the API MPMS,
Chapter 5, Sections 3 and 4. Each meter shall be proven when initially placed into service
using a ball or piston-type or small volume prover in accordance with the API MPMS,
Chapter 4, and Chapter 12 Section 2.
	 
	B.	 	Coriolis meters shall be installed and operated in accordance with the API MPMS,
Chapter 5, Section 6. Each meter shall be proven when initially placed into service using

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	 	 	a ball or piston-type or small volume prover in accordance with the API MPMS, Chapter 4,
and Chapter 12, Section 2. The prover will be additionally equipped with a densitometer
installed and proved in accordance with the API MPMS, Chapter 14, Section 6. The meter
proving shall be an Inferred Mass Proving in accordance with API MPMS, Chapter 5,
Section 6.9.1.7.2.

	C.	 	Meter proving frequency shall be in accordance with Section 2.3.C below. The meter shall be
proven immediately prior to and after any meter maintenance is performed.

Section 1.3 Densitometers.

	A.	 	Densitometers with frequency output shall be installed and proved in accordance with the
API MPMS, Chapter 14, Section 6. The frequency output may be driven directly into a
flow computer capable of internally converting frequency to corrected flowing density in
gm/cc, or to a separate frequency converter and into the flow computer as a 4-20 ma signal.
Proving is to be by entrapping a sample of the flowing stream at
system conditions in a
double-walled high-pressure vessel known as a pycnometer. The connections for the pycnometer
shall be installed in the same manner as those of the densitometer. Thermowells shall be
installed to allow monitoring of the inlet and outlet temperatures. Accuracy of the
densitometer shall be verified at the time of the meter proving or when accuracy is in
question. The accuracy of the densitometer shall be within +/- 0.001 gm/cc over its entire
range and repeatable to +/- 0.0005 gm/cc.
	 
	B.	 	For chemical grade propylene measurement utilizing a turbine meter, a calculated density may
be used in lieu of a densitometer by using the API MPMS, Chapter 11.3.3.2 method for
pure propylene and correcting it for 92 to 96 percent purity by applying a correction factor
of 0.9987 to the prover mass volume at each proving.

Section 1.4 Temperature and Pressure Transmitters. Temperature and pressure transmitters
shall be verified at the time of the meter proving using a certified thermometer and reference gage
respectively to ensure current readings are within +/-0.2 °F and +/- 1.0 psi. A calibration shall
be performed every 6 months. All verification and calibration data shall be supplied to the
customer. Accuracy of these transmitters shall be +/- 0.05 % of scale.

Section 1.5 Flow Computers. Flow computers shall be capable of accepting turbine pulses
from a turbine meter transmitter or mass pulses from a Coriolis meter transmitter and signals from
the pressure, temperature and density transmitters. The computer shall convert, as required, and
totalize these signals into gross volume, mass, and net volume. For net volume determinations, the
computer shall utilize the latest ASTM, API and GPA tables for temperature, pressure and specific
gravity corrections that are applicable to the product being measured. The weight of water shall be
as provided in the latest version of GPA 2145.

Section 1.6 Composite Sampling Systems. Composite sampling systems shall be installed and
operated in accordance with GPA Standard 2174. The composite sampler shall be operated to collect
flow-proportional samples only when there is flow through the meter. These samples shall be
accumulated in and removed from single-piston cylinders with mixing capability.

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

ARTICLE II

ACCOUNTING AND MEASUREMENT PROCEDURES

Section 2.1 Custody Transfer Tickets.

	A.	 	EPOLP shall furnish to the customer daily (0700 to 0700) custody transfer tickets unless
otherwise provided for by separate agreement, for products measured on a volumetric basis.
The ticket shall identify the product and state the net volume in barrels of product measured.
	 
	B.	 	For streams that are measured on a mass basis, custody transfer tickets shall be furnished
stating the total mass measured in pounds. Total pounds mass shall then be converted to pounds
of each component (if required) based on its weight fraction of the analysis of the product
removed from the composite sampler for the same time period in which the mass was totalized.
The component pounds shall then be converted to equivalent gallons of each component (if
required) utilizing the calculation procedure outlined in GPA Standard 8173. The component
density in a vacuum shall be in accordance to GPA Standard 2145. Component gallons shall be
further reduced to barrels. Unless otherwise provided for by separate agreement, custody
transfer tickets for mass-measured products shall be generated on a weekly or batch basis. An
unfinished batch shall be closed out at 0700 hours on the first day of the calendar month,
unless otherwise provided for by separate agreement.

Section 2.2 Measurement Basis.

	A.	 	Mass Measurement.

	 	1.	 	Inferred mass measurement shall be accomplished utilizing a flow-proportional
composite sampler, turbine meter, densitometer and flow computer to convert gross
volumetrically measured barrels using density in gm/cc at flowing conditions to total
pounds mass according to the following formula:

	 	 	 	TotalPounds = GrossBBLS x MeterFactor x FlowingDensity(gm /cc) x 350.506987
	 
	 	 	 	350.506987 is a conversion factor to convert density in gm/cc to pounds /bbl.

For polymer grade propylene the composite sampler and densitometer are not required.

	 	2.	 	Direct mass measurement shall be accomplished by utilizing a flow-proportional
composite sampler, a Coriolis meter, Coriolis transmitter, and a flow computer to
convert mass pulses from the Coriolis transmitter into pounds. Measured pounds mass is
calculated according to the following formula:

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

	 	 	 	 	 	 	 	 	 	 
	 

	 	MeasuredMass = 
	MeterPulses

	  x  MeterFactor
	 
	 

	 	 	 	 
	 

	 	KFactor	 	 

For polymer grade propylene the composite sampler is not required.

	B.	 	Volumetric Measurement.

	 	1.	 	Volumetric measurement shall be accomplished utilizing a flow computer, turbine
meter, and temperature and pressure transmitters. A “fixed” specific gravity at 60
oF and vapor pressure at 100 oF may be entered into the flow
computer in the case of “purity” products, if agreed by both parties. Temperature and
pressure shall be referenced to the proper API, ASTM and GPA Tables to calculate and
totalize net barrels. An optional densitometer and flow-proportional composite sampler
may be installed. If a densitometer is installed, the flow computer shall convert the
density signal at flowing conditions in gm/cc to specific gravity at 60 oF
and use GPA TP-15 to determine EVP (Equilibrium Vapor Pressure).
	 
	 	2.	 	On the basis of laboratory analysis, components of mixed streams may be
determined by multiplying the totalized net volume by the liquid volume percent of each
component, if so stipulated by contract.

The following shall be utilized by the flow computer to reduce gross barrels to net barrels.

For Temperature Reduction. API/ASTM/GPA Technical Publication TP-25 Table 24E shall
be used when measuring propane, isobutane, normal butane, natural gasoline and mixes of the
above.

For Pressure Reduction (Compressibility).

	 	a.	 	API MPMS, 11.2.2 (GPA 8286) shall be used for measuring propane,
isobutane, normal butane, and mixes of the above.
	 
	 	b.	 	API MPMS, 11.2.1 shall be used when measuring natural gasoline.

Temperature and Pressure Correction. API MPMS, 11.3.3.2 Subroutine “PROPYL”
shall be used for temperature and pressure correction when measuring propylene and as a
ratioed factor based upon propylene content in propane/propylene mix.

Section 2.3 Provings and Tolerances.

	A.	 	Principles. During the proving cycle, turbine pulses (volumetric) from the turbine
meter transmitter or mass pulses from the Coriolis transmitter are accumulated. Dividing the
accumulated pulses by the prover volume or prover mass generates a “K Factor” in terms of
volume or mass, respectively. After the initial proving, this “K Factor” is entered into the
flow computer along with a meter correction factor of 1.0000. After subsequent provings, one
can choose to adjust the “K Factor” or the meter correction factor. If the

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	 	 	choice is made to adjust the “K Factor,” then the meter correction factor remains at 1.0000.
If the adjustment is made at the meter correction factor, then the established “K Factor”
remains the same. The densitometer factor is entered into the flow computer to correct
flowing density in gm/cc as determined by results of a pycnometer test. The pycnometer
shall be installed so that flow through the vessel shall assure proper purging thus allowing
temperature and pressure equalization with the densitometer being proved. Maximum allowable
temperature differential between the contents in the pycnometer and the densitometer shall
be no greater than +/- 0.2 oF. The pressure shall be equal to that of the
densitometer at time of removal.

	B.	 	General.

	 	1.	 	Meter provings, calibration of instruments, and maintenance of measurement
equipment shall normally be performed by EPOLP personnel, but these functions may be
delegated to responsible third-party contractors under the direction of an EPOLP
representative.
	 
	 	2.	 	A customer’s witness signature does not constitute the approval of the use of
out-of-tolerance equipment, but said signature does attest to the validity of the
proving report.

	C.	 	Proving Intervals. Each meter shall be proven when initially placed into service.
Subsequent provings shall be made every thirty (30) days, unless in accordance with the
API MPMS, Chapter 5.3.9.5.2 the consistency of the meter factor, as evidenced in meter
factor control charts, may allow the proving interval to be extended to a maximum of 60 days.
	 
	D.	 	Meter Factor.

	 	1.	 	Volumetric meter proving calculations shall be in accordance with API
MPMS, Chapter 12.2. The average of five (5) consecutive prover runs shall be taken
to establish an initial or new meter factor, provided that the five (5) proving runs
are within 0.0005 (0.05 %) of each other and the meter factor is within 0.0025 of the
previous meter factor under like operating conditions.
	 
	 	2.	 	The new meter factor shall be used after each successful proving if it meets
the above proving criteria.
	 
	 	3.	 	If the new meter factor deviates from the previous meter factor under like
operating conditions by more than plus or minus 0.0025, then one half (1/2) of the
volume measured since the previous proving shall be corrected using the new meter
factor. If the time of malfunction can be determined by historical data, then the
volume measured since that point in time shall be corrected using the new
meter factor. The new meter factor shall not be used to correct volumes measured
more than thirty-one (31) days prior to the new proving.

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

	 	4.	 	No work shall be performed on the measuring element of a turbine meter without
first proving the meter. If any work is performed, a new meter factor shall be
established.
	 
	 	5.	 	If the new meter factor deviates more than 0.0025 but less than 0.0050 from the
previous meter factor, the field representatives of EPOLP and the customer shall
determine the corrective action, if any, to be taken.
	 
	 	6.	 	If the new meter factor deviates 0.0050 or more, the element shall be removed
and inspected. If there is build-up on the internals, then the element shall be
cleaned and the meter re-proved. If excessive wear is found, then the element shall be
repaired or replaced and the meter re-proved to establish a new initial meter factor.
After a 24-hour wear-in period, the meter shall be re-proved and if the meter factor
changes more than +/- 0.0025 from the new initial meter factor, then one-half (1/2) of
the volume measured shall be corrected using the latest meter factor.
	 
	 	7.	 	The measurement technician shall record all required corrections to measured
volumes and shall describe the findings, method of repair, and calculations used in
making the correction on the meter proving report. A correction ticket for the amount
of the correction shall be issued.

	E.	 	Density Factor. The proving intervals, tolerances, repairs and methods of correction
are the same as those provided for in Section 2.3.D above, except that the average of two (2)
successive pycnometer provings shall establish product flowing density, provided the two (2)
successive provings agree within 0.0005 (0.05%).

Section 2.4 Custody Measurement Station Failure.

	A.	 	If a failure occurs on a custody measurement station or the station is out of service while
product is being delivered, then the volume shall be determined or estimated by one of the
following methods in the order stated:

	 	1.	 	By using data recorded by any check measuring equipment that was accurately
registering; or
	 
	 	2.	 	By correcting the error if the percentage error can be ascertained by
calibrations, tests, or mathematical calculations; or
	 
	 	3.	 	By comparison with deliveries made under similar conditions when the
measurement station was registering accurately; or
	 
	 	4.	 	By using historical pipeline gain/loss.

Section 2.5 Sampling Procedures.

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

	A.	 	Flow proportional composite samples shall be removed from the composite sampler at the same
time the meter is read and a custody ticket issued. Samples of finished LPG products streams
shall be analyzed in accordance with ASTM D-2163 and raw mix stream shall be analyzed by GPA
2186 extended analysis for C6+ streams.
	 
	B.	 	Three samples shall be taken from the composite sampler. One sample shall be retained by
EPOLP for analysis, the second sample shall be retained by the customer for analysis, and the
third shall be held as a referee. If EPOLP has taken custody, its sample shall be analyzed
and the analysis used to account for transfer. If the customer has taken custody, its sample
shall be analyzed and the analysis used to account for transfer. If the customer and EPOLP
are in disagreement, then the referee sample shall be taken to a mutually agreed upon
laboratory which shall analyze the sample in accordance with the proper GPA Standard. This
analysis shall be accepted by the customer and EPOLP as final and conclusive for proportions
and components contained in the stream. Charges for such referee sample shall be borne by the
customer and EPOLP equally.
	 
	C.	 	Referee samples shall be held for a period of thirty (30) days from the date of sampling.
	 
	D.	 	If a malfunction of the sampling occurs resulting in no sample being taken or in an
unrepresentative sample being obtained, the following procedure shall be utilized in the order
stated.

	 	1.	 	The sample collected by any on-stream back-up sampling device that has
extracted a sample in proportion to the volume delivered shall be used.
	 
	 	2.	 	An average of the composite samples taken over a mutually agreed time frame
{not to exceed the last three (3) months of properly sampled deliveries} shall be used.
	 
	 	3.	 	Daily grab samples shall to be used for the time in question.

Section 2.6 Definitions.

	A.	 	“Day” shall mean a period of twenty-four (24) consecutive hours commencing at a local time
agreed on by all parties involved.
	 
	B.	 	“Gallon” shall mean a United States Gallon of 231 cubic inches of liquid at sixty degrees
Fahrenheit (60 oF) and at the equilibrium vapor pressure of the liquid.
	 
	C.	 	“Barrel” shall mean forty-two (42) United States Gallons.
	 
	D.	 	“EPOLP” shall mean Enterprise Products Operating L.P.

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

Section 2.7 Technical Publications.

	A.	 	Manual of Petroleum Measurement Standards, American Petroleum Institute, Washington,
D.C.:

	 	1.	 	API Chapter 1, “Definitions.”
	 
	 	2.	 	API Chapter 4, “Proving Systems.”
	 
	 	3.	 	API Chapter 5.3, “Measurement of Liquid Hydrocarbons by Turbine Meters.”
	 
	 	4.	 	API Chapter 5.4, “Accessory Equipment for Liquid Meters.”
	 
	 	5.	 	API Chapter 5.6, “Measurement of Liquid Hydrocarbons by Coriolis Meters.”
	 
	 	6.	 	API Chapter 9.2, “Pressure Hydrometer Test Method for Density or Relative
Density.”
	 
	 	7.	 	API Chapter 11.2.2, “Compressibility Factors for Hydrocarbons: 0.350 — 0.637
Relative Density (60 oF/60 oF) and –50 oF to 140 oF Metering Temperature.”
	 
	 	8.	 	API 11.2.1, “Compressibility Factors for Hydrocarbons: 0-90o API Gravity
Range.”
	 
	 	9.	 	API Chapter 11.3.3.2, “Propylene Compressibility.”
	 
	 	10.	 	API Chapter 12.2, “Calculation of Liquid Petroleum Quantities.”
	 
	 	11.	 	API Chapter 14.6, “Continuous Density Measurement.”
	 
	 	12.	 	API Chapter 14.7, “Standard for Mass Measurement of Natural Gas Liquids.”
	 
	 	13.	 	API Chapter 14.8, “Liquefied Petroleum Gas Measurement.”
	 
	 	14.	 	API Chapter 21.2, “Flow Measurement — Electronic Liquid Measurement.”

	B.	 	API/ASTM/GPA Technical Publication TP-25 Table 24E, “Correction of Volume to 60 °F Against
Relative Density 60 °F/60 °F.”
	 
	C.	 	ASTM-D-1250 (Table 24), “Volume Corrected to 60 oF and equilibrium vapor
pressure.”
	 
	D.	 	ASTM-D-2163 “Standard Test Method for Analysis of Liquid Petroleum (LP) Gases and Propene
Concentrates by Gas Chromatography.”

E. GPA Standard 2140, “Liquefied Petroleum Gas Specifications and Test Methods.”

Storage Lease (ENTERPRISE FRACTIONATION PLANT)

 

 

	F.	 	GPA Standard 2145, “Table of Physical Constants of Paraffin Hydrocarbons and Other Components
of Natural Gas.”
	 
	G.	 	GPA Standard 2174, “Method of Obtaining Hydrocarbon Fluid Samples Using a Floating Piston
Cylinder.”
	 
	H.	 	GPA Standard 2177, “Method for the Analysis of Demethanized Hydrocarbon Mixtures Containing
Nitrogen and Carbon Dioxide by Gas Chromatography.”
	 
	I.	 	GPA Standard 2186, “Method for the Extended Analysis of Hydrocarbon Mixtures Containing
Nitrogen and Carbon Dioxide by Temperature Programmed Gas Chromatography.”
	 
	J.	 	GPA Standard 8173, “Method for Converting Natural Gas Liquids and Vapors to Equivalent Liquid
Volumes.”
	 
	K.	 	GPA Standard 8182, “Tentative Standard for the Mass Measurement of Natural Gas Liquids.”
	 
	L.	 	References to any API, GPA, ASTM or similar publications shall be deemed to encompass the
latest edition, revision or amendment thereof.

Storage Lease (ENTERPRISE FRACTIONATION PLANT)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.

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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

14

 

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

16

 

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.

17

 

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)

18

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