Exhibit 10.3
SERVICES AGREEMENT
****INDICATES INFORMATION IN THIS DOCUMENT WHICH HAS
BEEN OMITTED FROM THIS PUBLIC FILING PURSUANT TO A REQUEST BY THE
COMPANY FOR CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE
COMMISSION. THE OMITTED INFORMATION HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION FOR
PURPOSES OF SUCH REQUEST.
THIS SERVICES AGREEMENT (the "Agreement") is made
effective as of June __, 1997 (the "Effective Date") between
BAYER CORPORATION, an Indiana corporation ("Bayer") and EL DORADO
NITROGEN COMPANY, an Oklahoma corporation ("EDNC").
W I T N E S S E T H:
WHEREAS, Bayer owns and operates a chemical
manufacturing facility located in Baytown, Chambers County, Texas
(the "Bayer Baytown Plant") where, among other manufacturing
processes, it engages in a manufacturing process that consumes
Nitric Acid; and
WHEREAS, pursuant to a certain Baytown Nitric Acid
Project and Supply Agreement (the "Project and Supply Agreement")
between Bayer, EDNC and El Dorado (as hereafter defined), dated
as of the Effective Date, and pursuant to a Ground Lease between
Bayer and EDNC (the "Ground Lease"), also dated as of the
Effective Date, Bayer has leased to EDNC a portion of the Bayer
Baytown Plant so that EDNC may design, construct, maintain and
operate Leasehold Improvements (as defined below) for the
manufacture and supply of Nitric Acid to Bayer;
WHEREAS, in connection with its occupancy of the Leased
Premises (as hereafter defined), EDNC desires to use or share the
use of certain facilities and services situated on or to be
constructed at the Bayer Baytown Plant;
WHEREAS, in connection with the operation of the EDNC
Baytown Plant (as defined below), Bayer agrees to supply to EDNC
certain utilities and waste treatment services that are required
for, or incidental to, the production of Nitric Acid;
NOW THEREFORE, in consideration of the premises and the
agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of all of which is
hereby acknowledged, and intending to be legally bound, the
parties hereby agree as follows:
SECTION 1: DEFINITIONS
Capitalized terms not otherwise defined herein shall
have the meanings specified in the Project and Supply Agreement.
Unless otherwise defined herein, the following terms shall have
the meanings assigned to them below for purposes of this
Agreement:
1.1 Battery Limits - The boundary lines of the Leased
Premises (as hereafter defined).
1.2 Boiler Blowdown - Shall mean water discharged from
the EDNC Baytown Plant to maintain optimum boiler operations at
the EDNC Baytown Plant.
1.3 Condensate - Shall have the meaning set forth in
Section 5 hereof.
1.4 Easements - Shall have the meaning set forth in
the Ground Lease.
1.5 EDNC Baytown Plant - That certain manufacturing
facility to be constructed, leased and operated on the Leased
Premises (as hereafter defined) by EDNC for the purpose of
producing Nitric Acid in accordance with the terms of the Project
and Supply Agreement.
1.6 El Dorado - Shall mean El Dorado Chemical Company,
an Oklahoma corporation.
1.7 Environmental, Health and Safety Laws - All
applicable federal, state and local laws relating to pollution or
protection of human health or the environment including, without
limitation, all laws, statutes, ordinances, rules, regulations,
orders, codes and notices relating to releases or threatened
releases of pollutants, contaminants, toxic or hazardous
substances or wastes into the environment, including, without
limitation, the following statutes, as amended from time to time:
(i) Resource Conservation and Recovery Act ("RCRA");
(ii) Comprehensive Environmental Response, Compensation and
Liability Act of 1980; (iii) Superfund Amendments and
Reauthorization Act of 1986; (iv) Clean Air Act, 42 U.S.C. Section 7401
et seq.; (v) The Clean Water Act, 33 U.S.C. Section 1251 et seq.;
(vi) Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and
(vii) Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.
1.8 Excess Steam - All excess steam that meets the
requirements of Section 5 hereof and results from EDNC's
production of Nitric Acid at the EDNC Baytown Plant and is not
required for the operation of the EDNC Baytown Plant.
1.9 Fugitive Emissions - Shall mean any gaseous or
particulate contaminant entering the atmosphere without first
passing through a vent designed to direct or control its flow.
1.10 Fully Operational - When the EDNC Baytown Plant
has first operated for (i) up to two hundred forty (240) hours
(such duration to be fixed at EDNC's option, but in no event
shall such duration be less than seventy-two (72) consecutive
hours) at full capacity producing Nitric Acid meeting the Nitric
Acid Specifications at a rate of not less than 1265 short tons
(1150 metric tons) per day during each day of operation and
(ii) at least seventy-two (72) hours at the turndown rate
producing Nitric Acid meeting the Nitric Acid Specifications.
1.11 Leased Premises - Shall have the meaning specified
in the Ground Lease.
1.12 Leasehold Improvements - Shall have the meaning
specified in the Ground Lease.
1.13 Maximum Use - Shall have the meaning set forth in
Section 4 hereof.
1.14 Net Distributed Cost - Shall have the meaning set
forth in the Project and Supply Agreement.
1.15 Services - Shall mean all services provided by
Bayer to EDNC hereunder.
1.16 Spills - Shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, pumping or dispersing of gaseous, solid or
liquid substances into the environment, excluding discharges
allowed or permitted under Environmental, Health and Safety Laws.
1.17 Termination Date - Shall have the meaning set
forth in the Project and Supply Agreement.
1.18 Utilities - The utilities to be provided to EDNC
by Bayer pursuant to Sections 3.1(A)-(E) of this Agreement.
1.19 Washdown Water - Shall mean waste water
periodically generated from essential maintenance activities
within the EDNC Baytown Plant's Battery Limits and meeting the
specifications in Schedule 6.
1.20 Waste - The water-borne liquid, gaseous or solid
substances resulting from the Nitric Acid manufacturing process
conducted by EDNC at the EDNC Baytown Plant and falling within at
least one of the following categories:
(A) Sanitary Sewage - Non-Waste effluent
generated in kitchens, change rooms and bathrooms by EDNC at the
EDNC Baytown Plant as a result of activities necessary to
preserve and maintain human health and hygiene.
(B) Cooling Tower Blowdown - Shall mean waste
water discharged from the EDNC Baytown Plant meeting the
specifications in Schedule 6.
(C) Routine Process Waste - Shall have the
meaning set forth in Section 6.3.
(D) Stormwater - Shall mean the following three
types of precipitation falling within the Battery Limits and
meeting the specifications in Schedule 6:
(1) Initial Stormwater - Shall mean the
first inch of precipitation falling on the padded areas within a
twenty-four (24) hour period;
(2) Additional Stormwater - Shall mean any
precipitation falling on the padded areas in excess of the
Initial Stormwater; and
(3) Uncollected Stormwater - Shall mean any
precipitation falling on unpadded areas within the Battery
Limits.
(E) Other Wastes - Shall mean any waste other
than the wastes defined in Section 1.18(A) through (D) hereof
generated by EDNC at the EDNC Baytown Plant (including, without
limitation, oily sludge generated in the blowdown process, waste
lubricating oils, construction debris and production/maintenance
generated wastes.)
1.21 Waste Treatment Facilities - The portion of the
Bayer Baytown Plant that accepts the Waste for necessary
treatment and all pipelines, equipment, fixtures and improvements
appurtenant thereto.
1.22 Waste Treatment Services - The services for the
treatment and disposal of Waste to be provided to EDNC by Bayer
pursuant to the requirements of Section 6 of this Agreement.
SECTION 2: TERM AND ACCESS
2.1 Term
This Services Agreement shall commence on the Effective
Date and shall terminate upon the Termination Date.
2.2 Parking and Access
EDNC officers, directors, employees, agents,
contractors and invitees may park in the parking lots located on
the Bayer Baytown Plant, and such parties shall use access routes
designated by Bayer to reach the Leased Premises, in each case,
as more particularly described in the Ground Lease. EDNC
officers, directors, employees, agents, contractors and invitees
shall observe all conditions imposed by Bayer for parking at the
Bayer Baytown Plant. EDNC officers, directors, employees,
agents, contractors and invitees shall have access to the EDNC
Baytown Plant at all times during the term of this Agreement (as
set forth in Section 2.1 hereof); provided, however, that EDNC
officers, directors, employees, agents, contractors and invitees
must observe Bayer Baytown Plant security procedures at all
times. Bayer may restrict the access of EDNC officers,
directors, employees, agents, contractors and invitees in the
event of an emergency.
2.3 Truck and Pipeline Access
(A) EDNC shall design, construct and maintain a
four (4) spot truck loading and unloading rack. EDNC shall be
responsible for all costs associated with the truck loading rack.
(B) Bayer grants EDNC the right to use Bayer's
pipelines for the transportation of Nitric Acid and Ammonia to
the consuming units. EDNC shall use Bayer's designated pipelines
in a manner that will not unreasonably interfere with Bayer's
operations at the Bayer Baytown Plant.
SECTION 3: UTILITIES AND AMMONIA
3.1 Provision of Utilities
Bayer shall supply certain utilities in specified
quantities (each, a "Utility" and collectively, the "Utilities")
based on certain assumptions set forth in Schedule 3.1, to the
Leased Premises for EDNC's use in the manufacture of Nitric Acid
and operation, construction and maintenance of the Leased
Premises, such supply to be in the amounts and manner provided in
this Section 3. EDNC warrants that the quantities provided in
Schedules 3.1(A)-(G) are a good faith estimate of the quantities
of Utilities it will consume at an annual production rate of
443,000 short tons of nitric acid per year. It is expressly
understood that Bayer shall not be obligated to supply any
Utilities other than those specifically listed in this Agreement
and that Bayer shall not be obligated to supply such Utilities in
excess of the quantities provided for in Schedules 3.1(A)-(G).
Bayer's obligations hereunder shall at all times remain subject
to any competing priorities Bayer may have at the Bayer Baytown
Plant for such Utilities. Bayer shall provide all such Utilities
to EDNC at the Battery Limits in accordance with the
specifications and the prices (if applicable) set forth on
Schedules 3.1(A)-(G) hereto and at Bayer's Net Distributed Cost.
(A) Water - The Bayer Baytown Plant is served by
public utility-supplied and plant-supplied water that is piped
through and from the Bayer Baytown Plant. Bayer agrees to supply
to the Leased Premises at the Battery Limits: (i) boiler feed
water (makeup); (ii) fire water; (iii) potable water; (iv) plant
(non-potable) water; and (v) demineralized water in the amounts
and at the specifications set forth in Schedule 3.1(A), subject
to the availability of such water from the utility supplying
same. Bayer shall supply all water at Bayer's Net Distributed
Cost.
(B) Nitrogen - Bayer agrees to supply to the
Leased Premises at the Battery Limits, at Bayer's Net Distributed
Cost, nitrogen gas through pipelines located at or on the Bayer
Baytown Plant in the amounts and in the specifications set forth
in Schedule 3.1(B).
(C) Air - Bayer agrees to supply to the Leased
Premises at the Battery Limits, at Bayer's Net Distributed Cost:
(i) plant air and (ii) instrument air through pipelines located
at or on the Bayer Baytown Plant in the amounts and in the
specifications set forth in Schedule 3.1(C).
(D) Steam - Bayer agrees to supply to the Leased
Premises at the Battery Limits, at Bayer's Net Distributed Cost,
six hundred thirty pounds per square inch gauged steam ("630
P.S.I.G. Steam") during start-up and one hundred fifty pounds per
square inch gauged steam during normal operations through
pipelines located at or on the Bayer Baytown Plant in the amounts
and in the specifications set forth in Schedule 3.1(D).
(E) Natural Gas - Bayer agrees to supply to the
Leased Premises at the Battery Limits, at Bayer's Net Distributed
Cost, natural gas through pipelines located at or on the Bayer
Baytown Plant in the amounts and at the specifications set forth
in Schedule 3.1(E).
(F) Chlorine - Bayer agrees to supply to the
Leased Premises at the Battery Limits at Bayer's Net Distributed
Cost, chlorine through pipelines located at or on the Bayer
Baytown Plant in the amounts and in the specifications set forth
in Schedule 3.1(F).
(G) Caustic - Bayer agrees to supply to the
Leased Premises at the Battery Limits at Bayer's Net Distributed
Cost, caustic through pipelines located at or on the Bayer
Baytown Plant in the amounts and in the specifications set forth
in Schedule 3.1(G).
(H) Electricity - Bayer agrees to cause Houston
Light & Power to supply electricity to EDNC. Bayer will bill
EDNC the actual cost per kilowatt hour of electricity plus a
reasonable pro rata portion of the capital invested for
electrical capacity infrastructure development.
3.2 Utility Quality
(A) Bayer makes no warranty with regard to the
quality or quantity of the Utilities made available to EDNC under
this Agreement.
(B) EDNC shall be released from the warranty
contained in Section 6 of the Project and Supply Agreement as to
nitric acid produced at the EDNC Baytown Plant if and to the
extent EDNC can establish that the failure to meet the Nitric
Acid Specifications was attributable to Bayer's failure to meet
the relevant specifications for, or quantities of, Ammonia or
Utilities provided to EDNC. EDNC shall exercise reasonable
efforts to mitigate the application of this section by promptly
notifying Bayer of any detected deficiency in the Utilities
provided.
3.3 Utility Cross Connections
All Utilities cross connections will be designed,
engineered and installed in accordance with Bayer's Utilities
Cross Connections Engineering Standards, copies of which are
attached as Schedule 3.3. EDNC agrees to maintain and operate
these systems as originally designed to prevent possible cross
contamination between EDNC's processes and a given Utility or
possible cross contamination between two Utility streams.
3.4 Utility Meters
(A) EDNC shall install, operate and maintain, at
its expense, demand metering equipment to measure EDNC's demand
and consumption of the Utilities. EDNC's readings will be the
basis upon which any charges will be assessed against EDNC for
the consumption of Utilities, unless any reading is proven to be
in error in accordance with Section 3.4(B).
(B) EDNC shall calibrate all meters in accordance
with manufacturer's recommendations. EDNC shall give Bayer three
(3) days notice of, and the right to observe, the calibration of
any meters installed by EDNC. EDNC shall recalibrate each meter
as recommended by the manufacturer. If during any such periodic
recalibration any meter is found to be inaccurate by more than
one-half of one percent (0.50%), then EDNC shall repair or
recalibrate such meter to the lesser of (i) manufacturer's
tolerances or (ii) plus or minus one-half of one percent (0.50%).
If a meter is inaccurate by more than one-half of one percent
(0.50%), the party that has benefitted from the inaccuracy shall
refund to the other party one hundred percent (100%) of the
discrepancy, back to the date of the last calibration or, if
identifiable, back to the date of the failure that triggered the
inaccuracy. If feasible, EDNC shall affix its seal to each meter
after each calibration. EDNC agrees to exercise reasonable
efforts to conduct all meter readings, inspections,
recalibrations and repairs in such a manner that it will not
unreasonably interfere with Bayer's operations at the Bayer
Baytown Plant. EDNC shall also permit Bayer, at Bayer's expense,
to inspect the meters at any time, provided such inspection does
not unreasonably interfere with EDNC's operations at the EDNC
Baytown Plant.
(C) If any inspection by Bayer reveals an
inaccurate meter (as determined under the preceding paragraph),
then the parties shall negotiate an appropriate adjustment to be
made to the cost of the affected Utility.
3.5 Resale of Utilities
EDNC covenants that it will not sell, transfer or
distribute to any other party (including Affiliates of EDNC)
those Utilities provided to EDNC by Bayer pursuant to this
Agreement.
3.6 Construction Utilities
Bayer shall supply certain utilities to the Leased
Premises for EDNC's use in the construction of the EDNC Baytown
Plant. Bayer shall invoice EDNC monthly for such construction
utilities at Bayer's Net Distributed Cost.
3.7 Electrical Distribution Lines and Equipment
Bayer will install necessary electrical distribution
lines and equipment to provide electricity to the Battery Limits
of the EDNC Baytown Plant, for which Bayer will charge EDNC a
monthly fee as set forth in 3.1(H) hereof.
SECTION 4: PRO-RATA SHARE OF INFRASTRUCTURE CAPITAL INVESTMENT
Upon start-up, EDNC is expected to use up to the
monthly quantities of Utilities as outlined in Schedules 3.1(A)-
(G) ("Maximum Use"). If for any reason EDNC increases its use of
any Utility above the Maximum Use and such increase in use would
cause a reduction in the amount of the particular Utility
otherwise available for Bayer's use, and the remedy of the
limitation requires a capital investment, Bayer may include a
reasonable portion of the capital investment in Bayer's Net
Distributed Cost for the Utility.
SECTION 5: EXCESS STEAM
(A) To the extent that EDNC has or generates Excess
Steam or condensate that meets the requirements of Schedule
3.1(D) hereof ("Condensate"), and subject to the provisions of
this Section 5, EDNC shall deliver the Excess Steam and
Condensate to Bayer ****. The Excess Steam shall be saturated,
have a minimum pressure of seven hundred (700) P.S.I.G. at the
inlet control/letdown valve at the Battery Limits and shall have
a minimum of five hundred eight degrees (508) superheat. Bayer
shall accept all excess steam that does not meet the
specifications set forth in this Section 5 and condensate that
does not meet the requirements set forth in Schedule 3.1(D)
hereof; provided, however, that Bayer shall have the right to
surcharge EDNC for any damages caused by the off-specification
steam or condensate. EDNC shall install and maintain meters at
such boundary points mutually agreed upon by the parties to
measure the quantity of Excess Steam supplied.
(B) Boiler water treatment chemicals used by EDNC
shall be approved by Bayer for compatibility with Bayer equipment
and piping and acceptability for treatment in the Waste Treatment
Facilities. In particular, hydrazine hydrate shall be used for
oxygen scavenging.
SECTION 6: USE OF SANITARY SEWERS AND DISPOSAL OF WASTE
Wastes from the EDNC Baytown Plant may be described by
the following categories:
1. Sanitary Sewage;
2. Cooling Tower Blowdown;
3. Routine Process Wastes;
4. Stormwater; and
5. Other Wastes.
EDNC shall provide at its sole cost and expense Nitric Acid
process sewers, collection sump(s) and pH neutralization for
Routine Process Wastes and Stormwater.
Bayer reserves the right to test the Waste streams and,
in the event Bayer notifies EDNC that the Waste streams do not
comply with Schedule 6, EDNC shall promptly take all appropriate
action to bring the Waste streams into compliance with
Schedule 6. In addition, Bayer may assess EDNC a surcharge to
cover the actual costs of all special handling and extra
treatment incurred by Bayer for waste that fails to meet
established specifications. In no case shall Bayer be required
to accept Waste that will cause Bayer to exceed limits imposed by
permits. With Bayer's prior approval, which shall not
unreasonably be withheld, EDNC may construct and locate
additional lines for transportation of its Waste, provided that
all such Waste, other than Sanitary Sewage, is processed and
directed above ground. Bayer shall invoice EDNC for such use of
the Waste Treatment Facilities on a Net Distributed Cost basis.
6.1 Use of Sanitary Sewers
EDNC may, at no cost to EDNC, discharge Sanitary Sewage
into the existing sanitary sewer system located on or near the
Leased Premises. EDNC shall not allow any third party or any
other site source to cause any substance, including without
limitation Waste, to be discharged into the sanitary sewer system
on the Leased Premises or the Bayer Baytown Plant. EDNC shall
make no discharges that violate any applicable: (i) governmental
laws, ordinances, orders, permits, rules or regulations
(including, without limitation, Environmental, Health and Safety
Laws); (ii) insurance or underwriting rules or regulations
disclosed to or known by EDNC on or prior to the Effective Date;
or (iii) revised insurance or underwriting rules or regulations
reasonably imposed by Bayer's loss prevention consultants and
insurance carriers following the Effective Date. EDNC shall
grant Bayer access to all records and files that relate in any
manner to any discharge by EDNC into the sanitary sewer system
during the term of this Agreement. Bayer reserves the right to
analyze, at its sole cost and expense, Sanitary Sewage at the
tie-in points.
6.2 Cooling Tower Blowdown
EDNC may discharge into Bayer's Cooling Tower Blowdown
header, via existing lines or lines to be constructed, Cooling
Tower Blowdown that meets the quality and quantity specifications
set forth in Schedule 6. To ensure that the Cooling Tower
Blowdown is acceptable for treatment in the Waste Treatment
Facilities, any chemicals EDNC uses in its cooling tower must be
approved by Bayer.
6.3 Routine Process Waste
(1) In connection with the production of
Nitric Acid by EDNC at the EDNC Baytown Plant, EDNC anticipates
producing Routine Process Waste of the general types listed
below, with the characteristics set forth in the attached
Schedule 6:
(a) Washdown Water;
(b) Lab Samples;
(c) Process Purges;
(d) Leaks;
(e) Boiler Blowdown; and
(f) Ammonia Vaporizer Blowdown.
(2) Subject to any contrary provisions of
this Section 6, EDNC may discharge into the overhead waste water
piping to the Waste Treatment Facilities, via existing lines or
those to be constructed, Routine Process Waste from the Leased
Premises that meets the quality and quantity specifications set
forth in Schedule 6. With Bayer's prior approval, which shall
not unreasonably be withheld, EDNC may construct and locate
additional lines for transportation of its Routine Process Waste,
provided that all such Routine Process Waste is processed and
directed above ground.
6.4 Initial Stormwater and Additional Stormwater
EDNC shall install, operate and maintain facilities to
capture all Initial Stormwater and Additional Stormwater that
falls on padded areas. EDNC shall construct such facilities so
that the Initial Stormwater is segregated from the Additional
Stormwater. EDNC shall discharge (pump) the Initial Stormwater
along with the Routine Process Wastes, via existing pipelines or
those to be constructed, into the Waste Treatment Facilities.
EDNC shall sample the Additional Stormwater and analyze the pH
and general appearance of the Additional Stormwater to ensure
that it does not exceed the permissible contamination levels for
Additional Stormwater described in Schedule 6. If the Additional
Stormwater does not exceed the permissible contamination levels
set forth in Schedule 6, then EDNC shall discharge the Additional
Stormwater, via existing pipelines or those to be constructed,
into the Bayer Baytown Plant's stormwater system. If the
Additional Stormwater exceeds the permissible contamination
levels set forth in Schedule 6, then EDNC shall hold the
Additional Stormwater until it can be discharged, via existing
pipelines or those to be constructed, into the Waste Treatment
Facilities, provided that Bayer has analyzed the Additional
Stormwater and determined that based on level of contamination
and volume, the Waste Treatment Facilities can accept such
Additional Stormwater.
6.5 Uncollected Stormwater
Uncollected Stormwater will be directed, via pipelines,
existing or to be built, or by ground elevation, to Bayer's
underground stormwater piping. EDNC will not allow contamination
of Uncollected Stormwater.
6.6 EDNC's Disposal of Other Wastes
EDNC shall be solely responsible for the proper
segregation, storage and disposal of any other waste (including,
without limitation, oily sludge from the ammonia separation
system, waste lubricating oils, construction debris and
production/maintenance generated wastes) generated by EDNC at the
EDNC Baytown Plant, the storage, conveyance, treatment and
disposal of which shall be performed in accordance with all
applicable Environmental, Health and Safety Laws and all Bayer
guidelines and procedures. EDNC shall use waste management
services mutually agreed upon by the parties for the segregation
and disposal of such other wastes. Bayer will not reimburse EDNC
for any costs associated with the storage, conveyance, treatment
and disposal process of other waste except as otherwise provided
in the Project Agreements.
6.7 General
(A) Bayer shall maintain the Waste Treatment
Facilities in good condition and repair and in such a manner as
to allow the Waste to be treated and discharged in compliance
with all applicable laws, including, without limitation,
Environmental, Health and Safety Laws. EDNC shall maintain any
pipelines, sumps, sump pumps or other facilities located on the
Leased Premises in compliance with all applicable laws, including
without limitation, Environmental, Health and Safety Laws.
(B) Upon reasonable notice, EDNC and Bayer shall
each grant to the other access to all properties, records and
files relating to the deliveries and discharge of Waste. Bayer
and EDNC shall submit written reports to each other containing
such matters and information as are reasonably requested by the
other party.
(C) EDNC shall be responsible for ensuring that
the EDNC Baytown Plant maintains compliance with all leak
detection and repair programs related to Fugitive Emissions as
mandated by all applicable Environmental, Health and Safety Laws.
(D) EDNC shall be responsible, at its expense,
for all costs associated with the proper containment, clean-up,
treatment and disposal of all Spills and materials contaminated
by such Spills arising from EDNC's operation of the EDNC Baytown
Plant. EDNC shall employ the Spill remediation services and
disposal outlets mutually agreed upon by the parties.
(E) EDNC shall discharge all Sanitary Sewage or
Waste into the existing sanitary sewer system or Waste Treatment
Facilities in such a manner as to ensure that such discharges do
not unreasonably interfere with Bayer's operations at the Bayer
Baytown Plant. EDNC shall promptly correct any nonconforming
discharges.
(F) EDNC shall install, operate and maintain, at
its expense, metering equipment to measure EDNC's discharge of
Routine Process Waste and Cooling Tower Blowdown into the Waste
Treatment System.
SECTION 7: PIPELINE AND PIPERACK CONSTRUCTION AND MAINTENANCE
7.1 Pipeline Construction
At least thirty (30) days prior to the date on which
the EDNC Baytown Plant becomes Fully Operational, EDNC shall
complete the construction of those pipelines that are necessary
to transport: (i) Excess Steam and pipeline-borne Waste from the
EDNC Baytown Plant to the appropriate Battery Limits tie-in
points designated by mutual agreement of the parties, and
(ii) all specified Utilities from the appropriate tie-in points
at the Battery Limits designated by mutual agreement of the
parties. Bayer shall design, engineer and construct the Delivery
Systems in accordance with the provisions of Section 13.1 of the
Project and Supply Agreement.
7.2 Pipeline Backflushing
If it is necessary to backflush the pipelines, EDNC
shall make an estimate of Nitric Acid or other material remaining
in the pipelines and the appropriate credit will be applied to
the relevant Bayer or EDNC account.
SECTION 8: FIRE PROTECTION, SAFETY AND SECURITY
8.1 Fire Protection
(A) The fire protection system for the Bayer
Baytown Plant and the Leased Premises shall be located partly at
or on the Bayer Baytown Plant and partly on the Leased Premises.
With the prior written approval of Bayer, which will not be
unreasonably withheld, EDNC may make such additions to the fire
protection system on the Leased Premises as EDNC requires for the
protection of the Leased Premises and Leasehold Improvements.
Bayer, at its cost and expense, shall maintain in good condition
and repair and shall make available for the benefit of the Leased
Premises in case of an emergency the portion of the fire
protection system located at or on the Bayer Baytown Plant.
EDNC, at its cost and expense, shall maintain in good condition
and repair and shall make available for the benefit of the Bayer
Baytown Plant in case of an emergency the portion of the fire
protection system located on the Leased Premises. Each party
shall be responsible for notifying the designated authority of
emergencies occurring on its property. EDNC shall only use water
from the fire protection system for emergency purposes and shall
immediately report any such use to the designated authority at
the Bayer Baytown Plant.
(B) (1) EDNC shall incorporate in the design of
the EDNC Baytown Plant the specific recommendations for fire
protection on the Leased Premises that are recommended by Bayer's
loss prevention consultants as described generally in
Schedule 8.1 or mandated by insurance requirements.
(2) During the course of construction and
operation of the EDNC Baytown Plant at or on the Leased Premises,
further recommendations may be made by Bayer for changes in fire
protection or personnel safety practices. These further
recommendations must be submitted to EDNC in writing, and EDNC
shall consult with EDNC's insurance carrier regarding such
recommendations. EDNC shall implement any reasonable Bayer
recommendations.
(3) Bayer agrees to furnish the fire-
fighting services for the Leased Premises that Bayer has
available for the protection of its own property and personnel.
EDNC agrees to cooperate with Bayer in furnishing such services,
including participating in any fire drill procedures on the
Leased Premises, as reasonably requested by Bayer. Subject to
the prior execution of confidentiality agreements in form and
substance satisfactory to EDNC and its counsel, EDNC agrees to
grant Bayer, and any insurer or agent of Bayer, access to the
Leased Premises and Leasehold Improvements as required by Bayer's
insurance carriers for inspection purposes. Subject to the prior
execution of confidentiality agreements in form and substance
satisfactory to Bayer and its counsel, Bayer agrees to grant EDNC
and its insurance carriers access to the Bayer Baytown Plant and
the improvements located thereon as required by EDNC's insurance
carriers for inspections related to fire protection or other
safety measures.
8.2 Safety
(A) EDNC will construct and operate the EDNC
Baytown Plant according to sound engineering practice and all
applicable laws and regulations. In the interest of promoting a
safe manufacturing environment, EDNC and Bayer agree to meet
every other month to discuss and review safety items of mutual
interest.
(B) EDNC and Bayer will coordinate the
installation at the EDNC Baytown Plant of a public address system
that will be integrated with the Bayer Baytown Plant public
address system so as to permit centralized emergency notification
and other central announcements to personnel at the EDNC Baytown
Plant. Bayer shall provide connections for the public address
system at the Battery Limits.
(C) Bayer will provide EDNC with a list of VHF
radio frequencies for routine use at the EDNC Bayer Baytown Plant
and for emergency communication with the Bayer disaster response
office. EDNC shall utilize radio equipment capable of
transmitting and receiving information on the assigned
frequencies.
(D) Bayer will provide EDNC with phosgene
monitoring badges for use by EDNC personnel at the EDNC Baytown
Plant. EDNC shall require the use of such badges by all
personnel at the EDNC Baytown Plant, and shall cause such badges
to be handled and examined in accordance with Bayer safety rules
applicable to the use and examination of such badges. Bayer
shall provide EDNC with such safety rules prior to the date the
EDNC Baytown Plant becomes Fully Operational.
8.3 Security
EDNC shall be responsible for providing security for
the Leased Premises and the Construction Laydown Area (as such
term is defined in the Ground Lease). Bayer shall have no
responsibility for the internal security of the Leased Premises
or the construction laydown area. On or about March 1, 1998,
Bayer will provide perimeter security only at the Bayer Baytown
Plant perimeter.
SECTION 9: CUSTODIAL, MAINTENANCE AND LABORATORY SERVICES
EDNC is responsible for providing its own custodial,
maintenance and laboratory services for the EDNC Baytown Plant.
However, EDNC and Bayer may reach agreement regarding joint use
of any or all of the same services used by Bayer at the Bayer
Baytown Plant. EDNC may utilize Bayer's weigh scales.
SECTION 10: ESTIMATED COSTS
If any fee or charge to be paid by one party to the
other hereunder is based on the other party's distributed costs,
and if such costs vary from time to time in a way that is not
readily ascertainable by reference to suppliers' invoices and the
like, then the parties shall endeavor in good faith to agree upon
billings based on estimates of such costs. If estimates are used
for billing purposes, then at the end of each quarter in which
estimates were used, actual costs shall be compared to estimated
costs and any underpayments will be paid or overpayments will be
refunded.
SECTION 11: AUDIT RIGHTS
Each calculation, adjustment or estimate made pursuant
to this Agreement shall be supported by appropriate workpapers
and background data and shall be made in conformity with GAAP.
Each party shall have the right, at its own expense, to employ a
firm of independent certified public accountants to conduct an
audit of any calculation, adjustment or estimate made pursuant to
this Agreement. Such auditors shall execute agreements of
confidentiality acceptable to both parties, approval of which
shall not be unreasonably withheld.
SECTION 12: INTERRUPTION OF SERVICE
Neither party shall be liable to the other to provide
Utilities or Waste Treatment Services pursuant to the terms of
this Agreement if the failure to provide such Utilities or Waste
Treatment Services was due to any cause or causes beyond the
reasonable control of the party required to provide the Utilities
or Waste Treatment Services. As a practice of good maintenance,
events, whether involuntary or voluntary, may require temporary
fluctuations or interruptions in Utilities or Waste Treatment
Services. Both parties agree to exert reasonable efforts to
minimize the frequency and duration of such interferences.
SECTION 13: INDEMNIFICATION
The indemnification rights and obligations of the
parties under this Agreement shall be determined in accordance
with Section 18 of the Project and Supply Agreement.
SECTION 14: EXERCISE OF RIGHTS UNDER THIS AGREEMENT
Bayer and EDNC covenant and agree that each party shall
fulfill its obligations under this Agreement to maintain, repair
or replace the equipment that each is obligated to maintain,
repair or replace at standards equivalent to or surpassing those
prevailing in the industry. Except as otherwise provided hereby,
neither party has the right to enter the property of the other
party to make any repairs or replacements or to perform
maintenance or any other function unless immediate action is
required because of an emergency. Bayer and EDNC each agree to
give the other party advance written notice and await approval
before entering upon the other's property to perform any
maintenance on or repair or replacement of any equipment or
facilities located on the property of the other party.
SECTION 15: REMEDIES AND FORCE MAJEURE
15.1 Remedies
If either party fails to comply with any term or
condition or to fulfill any obligation imposed under this
Agreement, then the other party may exercise any one of the
remedies afforded such party under the Project and Supply
Agreement.
15.2 Force Majeure
Both EDNC and Bayer will be excused from the
obligations of this Agreement to the extent that performance is
delayed or prevented as a result of a Force Majeure Event.
SECTION 16: MISCELLANEOUS
16.1 Payment for Services
All amounts payable hereunder shall be paid in lawful
money of the United States on a net fifteen (15) day basis, with
interest to accrue thereafter at a rate equal to the prime rate
charged by Citibank, N.A. The acceptance by either party of bank
drafts, checks or other media of payment will be subject to
immediate collection of the full face amount thereof and the
payment shall not be deemed to have been paid until actually
received in cash by the respective party, except that no interest
shall be charged after receipt of any bank drafts, checks, or
other media of payment that is collected in cash in the ordinary
course of business and without unusual delay.
16.2 Material Default
Either party may recover for each delivery of goods,
materials, utilities or raw materials hereunder as a separate
transaction, without reference to any other delivery. If either
party is in material default (after expiration of any cure
period) with respect to any of the terms or conditions of this
Agreement, the other party may, at its option, defer further
deliveries of goods, materials, utilities or raw materials
hereunder until such default is remedied, all without prejudice
to any other legal or equitable remedy. If either party is in
material default (after expiration of any cure period) with
respect to any terms or conditions of this Agreement, the other
party may, at its option, notify the defaulting party that it
will suspend orders until it receives adequate assurance of due
performance, all without prejudice to any other legal or
equitable remedy. However, this Section 16.2 does not apply to
situations in which either party's non-performance or delay is
excused by applicable law or provisions of the Project
Agreements. In addition to the remedies set forth above or
otherwise available at law or in equity, a party not in default
hereunder shall have the rights and remedies set forth in the
Project and Supply Agreement.
16.3 Dispute Resolution
If any dispute arises concerning or related to this
Agreement, the parties shall resolve such dispute in accordance
with the dispute resolution provisions set forth in the Project
and Supply Agreement.
16.4 Assignment
EDNC may not assign its respective rights and
obligations under this Agreement or any of the Project Agreements
to any other party without first obtaining the express written
consent of Bayer, which consent may be granted or withheld by
Bayer in its sole discretion; provided, however, that EDNC shall
be permitted to sublease the Leased Premises and encumber the
Ground Lease Sublease (as defined in the Ground Lease) in
accordance with Section 15.3 of the Ground Lease and to
collaterally assign its rights under the other Project Agreements
to the Owner Trustee, the Construction Loan Agent and/or the
Indenture Trustee pursuant to the Operative Agreements.
16.5 Notices
Any notice, communication or statement required or
permitted to be given hereunder shall be in writing and deemed to
be sufficiently given when delivered in person or by overnight
mail to the address of the respective party below:
Bayer Corporation
100 Bayer Road
Pittsburgh, Pennsylvania 15205-9741
Attn: Controller, Polymers Division
Attn: Assistant General Counsel, Polymers Division
El Dorado Nitrogen Company
16 South Pennsylvania Avenue
Oklahoma City, Oklahoma 73107
Attn: President
and to:
El Dorado Chemical Company
655 Craig Road
Suite 322
St. Louis, Missouri 63141
Attn: Vice President, Industrial Chemicals
LSB Industries, Inc.
16 South Pennsylvania Avenue
Oklahoma City, Oklahoma 73017
Attn: General Counsel
Either party may, by notice given as aforesaid, change its
address or the party that receives notice for all subsequent
notices.
16.6 Modification
This Agreement shall not be modified or amended, except
by written instrument executed by the duly authorized officers of
the parties hereto.
16.7 Applicable Law; Submission to Jurisdiction;
Consent to Service
The validity, interpretation and performance of this
Agreement shall be governed by the internal laws of the State of
Texas, without reference to conflicts of laws provisions. The
parties hereto irrevocably submit to the jurisdiction of the
United States District Court for the Southern District of Texas
and consent to service of process in accordance with the
provisions of Section 22 of the Project and Supply Agreement.
16.8 Invalidity of Particular Provisions
If any term or provision of this Agreement or the
application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, then the remainder of this
Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby. Each
term and provision of this Agreement shall be valid and be
enforced to the fullest extent permitted by law.
16.9 Captions
The headings or titles used herein are for convenience
only. They do not constitute a part of this Agreement and shall
not affect the meaning, construction or effect of the provisions
hereof.
16.10 Relationship of Parties
Nothing contained in or done pursuant to this Agreement
or any of the other Project Agreements shall be deemed or
construed by the parties hereto, or by any third party, to create
the relationship of principal and agent, partnership, joint
venture or any association whatsoever between Bayer and EDNC. It
is expressly understood and agreed that no provisions contained
in this Agreement, nor any act or acts of the parties hereto,
shall be deemed to create any agency, partnership or joint
venture relationship between EDNC and Bayer.
16.11 Counterparts
This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which taken together constitute one instrument.
16.12 Entire Agreement
This Agreement and the other Project Agreements,
together with all the schedules attached hereto and thereto,
contain the entire understanding of the parties and supersede any
prior understanding and agreements among them respecting the
subject matter hereof and thereof. There are no agreements,
arrangements or understandings, oral or written, between and
among the parties hereto relating to the subject matter of this
Agreement and the other Project Agreements that are not set forth
or expressly referred to herein or therein.
16.13 Waiver
No waiver by Bayer or EDNC of any default or breach of
any covenant, condition or stipulation herein shall be treated as
a waiver of any subsequent default, breach of the same or any
other covenant, condition or stipulation hereof.
16.14 Controlling Agreement
In the event of any conflict between the provisions
hereof and the provisions of the Project and Supply Agreement,
the provisions of the Project and Supply Agreement shall control.
16.15 Binding Effect
This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective
permitted successors and assigns.
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed and delivered by their duly authorized
officers and their corporate seals to be hereunto affixed the day
and year first above written.
EL DORADO NITROGEN COMPANY BAYER CORPORATION
By:_________________________ By: __________________________
Name:_______________________ Name:_________________________
Title:______________________ Title:________________________
SCHEDULE LIST
3.1 Utility Specifications
3.1(A) Water Specifications
3.1(B) Nitrogen Specifications
3.1(C) Air Specifications
3.1(D) Steam Specifications
3.1(E) Natural Gas Specifications
3.1(F) Chlorine Specifications
3.1(G) Caustic Specifications
3.3 Utilities Cross Connections Engineering Standards
6 Waste CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS
IT IS THE SUBJECT OF A REQUEST BY THE COMPANY FOR CONFIDENTIAL
TREATMENT BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
FREEDOM OF INFORMATION ACT. THE OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE
COMMISSION FOR PURPOSES OF SUCH REQUEST.
8.1 Fire Prevention Design Requirements
SCHEDULE 3.1
UTILITY SPECIFICATIONS
The information set forth on Schedules 3.1(A)-(G) is based on the
following assumptions:
1. Monthly quantities are based on one hundred twenty five
percent (125%) of projected utility consumption rates
necessary to produce 37,950 short tons of nitric acid (100%
basis) in a thirty-day month at the EDNC Baytown Plant.
2. Annual production of nitric acid at the EDNC Baytown Plant is
estimated to be 443,000 short tons.
3. Utility specifications represent the quality of such
utilities at the Battery Limits.
4. Typical monthly limits reflect anticipated maximum usages
during peak consumption periods.
SCHEDULE 3.1(A)
WATER SPECIFICATIONS
(i) Boiler Feed Water (makeup)
Pressure 250 P.S.I.G. minimum
Temperature 250F (15F)
Hardness 0.2 ppm maximum
Oxygen 7 ppb maximum
pH 8.3 minimum - 10 maximum
Iron 0.1 ppm maximum
Copper 0.05 ppm maximum
Typical monthly volume of boiler feed water is estimated
to be 58.3 million pounds. With an average rate of
approximately 78,400 lbs/hr, the boiler feed water
consumption shall not exceed a maximum rate of 98,000
lbs/hr.
Boiler feed water specifications may be subject to change
based on final selection and design of the boiler. If a
higher quality of boiler feed water is required, but
cannot be met by Bayer, the installation of any additional
water treatment facilities by EDNC, if needed, will be
treated as a change order.
(ii) Fire Water
The Bayer Baytown Plant fire water grid consists of a
series of sixteen inch (16") and twelve inch (12")
underground water mains. The fire water grid will be
extended north/south with sixteen inch (16") mains and
east/west with twelve inch (12") mains as the new
construction projects proceed.
The grid is supplied by two fire pump stations:
East Fire Water Pump Station
Located in Block 15A, the East Fire Pump Station has
three 2500 gpm at 125 psi vertical turbine fire water
pumps. These three pumps take suction from two reservoirs
of at least 7.5 million gallons each. The reservoirs are
automatically refilled by an overflow/refill pipe to the
river. The reservoirs are interconnected by a seventy-two
inch (72") concrete pipe. Individual thirty-six inch
(36") concrete pipes supply each of the three pumps from
the seventy-two inch (72") pipe. There are isolation/
diversion valves in the suction arrangement.
One of the three fire water pumps is electric motor
driven. The other two pumps are diesel engine driven
(designated as north diesel and south diesel). All three
pumps/drivers are UL-listed. A large, electric 350 gpm
"jockey" pump maintains a normal pressure of 140 psi.
"Start" pressure for the East Fire Pump Station pumps:
1. Electric 100 psi
2. North Diesel 80 psi
3. South Diesel 60 psi
The pumps discharge to a valved manifold, then to common
piping distribution headers via two parallel sixteen inch
(16") mains. Valving provides flexibility to accommodate
and discharge combination.
West Fire Pump Station
Located at the extreme west end of the plant
property, near the barge dock, the West Fire Pump Station
has two 2500 gpm at 125 psi vertical turbine fire water
pumps taking suction from a 2 million gallon reservoir.
The reservoir is refilled by manual back fill through the
fire water grid. A common wet well provides suction for
both of the West Fire Pump Station pumps.
Both pumps are diesel engine driven. The pumps,
drivers and control equipment are all UL-listed. A 60 gpm
electric jockey pump is provided. This pump is a back-up
to the 350 gpm jockey pump in the East Pump Station.
"Start" pressures for the West Fire Pump Station pumps:
1. North Diesel 75 psi
2. South Diesel 55 psi
Pump discharge is to a common header, complete with
valving, that supplies a single sixteen inch (16")
underground main connecting to the plant grid at the
corner of D Street and 4th Avenue.
The pump discharge manifold in the pump house is
arranged to accommodate a second discharge line. Bayer
will install a second sixteen inch (16") discharge line
tying into the plant grid at the northwest corner of Block
12C.
Bayer will supply fire water to the Battery Limits of
the EDNC Baytown Plant at a sufficient pressure and flow
rate to met EDNC design and insurance requirements.
(iii) Potable Water
Typical monthly volume is estimated to be approximately
25,000 gallons. Potable water consumption shall not
exceed a maximum rate of 30,000 gallons. Potable water
shall meet the minimum municipal guidelines.
(iv) Plant (Non-Potable) Water
Typical monthly volume is estimated to be 29.5 million
gallons at an average rate of approximately 660 gpm. The
plant water consumption shall not exceed a maximum rate of
870 gpm.
Chlorides 80 ppm maximum
Supply temperature ambient
Chlorine 0.1 ppm maximum
Pressure 50 P.S.I.G. minimum
(v) Demineralized Water
Pressure 60 P.S.I.G.
Conductivity 2.0 pMhos maximum
Temperature 90 F maximum
Chlorides 0.5 ppm maximum
Chlorine 0.1 ppm maximum
Typical monthly volume at capacity is estimated to be 2.23
million gallons at an average rate of 50 gpm.
Demineralized water consumption shall not exceed a maximum
rate of 63 gpm.
SCHEDULE 3.1(B)
NITROGEN SPECIFICATIONS
When EDNC is not using the Back-up or Start-up Supply
Plan, typical monthly volume for continuous usage is
estimated to be 0 SCF.
Nitrogen may be used to unload nitric acid trailers when
EDNC is using the Back-up and Start-up Supply Plan. Peak
flow for the unloading of nitric acid trailers shall not
exceed 75 SCFM. During use of the Start-up Supply Plan,
monthly requirements of nitrogen are estimated not to
exceed 130,000 SCF.
SCHEDULE 3.1(C)
AIR SPECIFICATIONS
(i) Plant Air
Typical volume during truck unloading is estimated to be
300 SCFM. Typical monthly volume is estimated to be 3.38
million SCF at an average rate of approximately 75 SCFM.
Plant air consumption shall not exceed a maximum rate of
400 SCFM.
(ii) Instrument Air
Typical monthly volume is estimated to be 7.23 million SCF
at an average rate of approximately 165 SCFM. A maximum
monthly volume is estimated to be 9.2 million SCF. The
instrument air consumption shall not exceed a maximum rate
of 206 SCFM. Instrument air shall meet the pressures of
plant air, above, and have a maximum dew point of -40 Farenheit.
Pressure:
Minimum 60 P.S.I.G.
Design 75 P.S.I.G.
Maximum 150 P.S.I.G.
SCHEDULE 3.1(D)
STEAM SPECIFICATIONS
Except for each start-up of the EDNC Baytown Plant, during normal
operation EDNC will not consume steam from Bayer. EDNC shall
export approximately 40,000 to 70,000 lbs/hr to Bayer.
All steam treatment must be compatible with the Bayer steam
treatment system.
The following is a brief description of Bayer Baytown Utilities
Department Water Treatment and Control Limits:
Boiler Feedwater
pH - 8.3 minimum - 10 maximum
Conductivity - Record only (to check boiler cycles)
Total Hardness - 0.2 ppm maximum
Silica - Record only
Boiler Water
Hydrazine hydrate is used as an oxygen scavenger. Control range
is 150-500 ppb (in condensate return).
Chelate (BTC - 105) is used as a scale control agent. Control
agent is 5-8 ppm (as CaCO3, in the Boiler water).
Silica - Control range is 50 ppm maximum (in Boiler water).
Conductivity - Control range is 2700-3000 Mhos (in Boiler
water).
"O" Alkalinity - Control range is 150-550 ppm (in Boiler water).
Steam and Condensate System
The steam pH is controlled by adding Ammonia. Control range is
8.4-8.8 (in condensate return).
The steam and condensate piping corrosion is controlled by
adding Amercor 8750. The feed rate is determined by corrosion
reports.
Drew Industrial (division of Ashland Chemicals Inc.) is the
water treating consultant for the Bayer Baytown Plant.
Condensate
Typical production levels will result in steam export with Boiler
Feed Water makeup. No condensate import is anticipated. Upon
start-up, the EDNC Baytown Plant will import 630 P.S.I.G. steam
at a peak flow of 125,000 lbs/hour. Most of the resultant
condensate will then be exported. Peak condensate export is
approximately 125,000 lbs/hour. EDNC must verify that the
condensate is not contaminated, as verified by EDNC with a
conductivity meter. Control limits are 50 Mhos with condensate
to be dumped at 100 Mhos. If the condensate is contaminated,
EDNC shall dump the condensate to process waste water.
SCHEDULE 3.1(E)
NATURAL GAS SPECIFICATIONS
Sulphur content 1 grain of hydrogen sulphide
maximum or 20 grains of total
sulfur maximum per 100 cubic feet
Water vapor content 7 pounds maximum per 1 million
cubic feet maximum
No natural gas is consumed in the nitric acid manufacturing
process. The gas may be used in the lab or in the offices and
buildings for heat and air conditioning. Natural gas consumption
is estimated to average less than 1 SCFM.
SCHEDULE 3.1(F)
CHLORINE SPECIFICATIONS
Chlorine is used for water treatment at the cooling tower. Based
on the anticipated blowdown rate, chlorine consumption will
average 85 pounds per day, with a peak consumption of 170 pounds
per day. The chlorine will be standard commercial grade with a
minimum of 99.5% chlorine by weight.
SCHEDULE 3.1(G)
CAUSTIC SPECIFICATIONS
Caustic (NaOH) will be used primarily for neutralization.
Caustic consumption will average 140 pounds per day on a 100%
basis with peak consumption of 1500 pounds per day. Initially
Bayer will supply to EDNC a 50% caustic solution, ET grade. When
another Bayer unit becomes operational (such unit is estimated to
become operational in early 1999), Bayer will generally supply to
EDNC 32% membrane grade caustic solution; provided, however, that
Bayer may supply to EDNC 50% caustic solution as an alternative.
SCHEDULE 3.3
UTILITIES CROSS
CONNECTIONS ENGINEERING STANDARDS
See attached copy.
SCHEDULE 6
WASTE
BASIS:
1. For pH control of Routine Process Waste, Initial
Stormwater and Additional Stormwater, EDNC will neutralize
with caustic soda.
2. EDNC will collect the Initial Stormwater and pump out the
Initial Stormwater over a six (6) hour period to the waste
water header. Additional Stormwater is to be routed to
the Bayer Baytown Plant's stormwater system after
verifying water quality.
3. EDNC will discharge Cooling Tower Blowdown into the Bayer
Baytown Plant's cooling tower blowdown header.
4. The overhead waste water header backpressure is up to 50
P.S.I.G. during rains.
5. Normal flow rates below are based on EDNC Baytown Plant
production of 443,000 short tons of nitric acid (100%
basis) a year.
6. EDNC will continuously monitor pH and flow to waste water
header as well as pH of Additional Stormwater to Bayer's
storm sewer.
7. EDNC must keep Uncollected Stormwater free of
contaminants.
Peak Normal
Waste Stream Quality Flow Flow
- ------------ ------------------- ---- ------
Flow to Cooling Tower
Blowdown header
pH range 7.5 - 8.0 **** ****
Anticipated metal
levels:
Cr 0.013 lb/day
Cu 0.045 lb/day
Ni 0.014 lb/day
Pb 0.007 lb/day
Zn 0.767 lb/day
Flow to Waste Water header
Routine Process Waste,
gpm
Washdown Water
Lab Samples warranted pH range of 5.0 to **** ****
Process Purges 8.0 temperature 104 F max
Leaks
Boiler Blowdown
Ammonia Vaporizer
Water 210 lb/hr max
Free ammonia 2.0 lb/hr max **** ****
Oil 0.15 lb/hr max*
- --------------------------------
1
Metal levels of this water shall be no more than twice the anticipated metal
levels.
Peak Normal
Waste Stream Quality Flow Flow
- ------------------------ ---------------- ---- ------
Initial Stormwater, gpm warranted pH range of
5.0 to 8.0 **** ****
Additional Stormwater warranted pH range of -- --
5.0 to 8.0 appearance -
uncontaminated
Total Flow to Waste Water
header, gpm **** ****
* to be reverified by IFC Kaiser.
___________________________________________
2
Additional Stormwater that is not pumped to the overhead waste water line must
be monitored and warranted to above pH range as well as uncontaminated with
other foreign substances, including but not limited to oils, as determined
by visual inspection.
EDNC will not allow the streams specified above to contain any species other
than those set forth above.
EDNC is expected to follow the Bayer Baytown Plant procedures for monitoring,
communicating and controlling action levels for pH and species noted in the
specifications, including n9otifying Bayer if the waste water is likely to
deviate from the above parameters. Bayer will routinely monitor cooling Tower
Blowdown and total flow of overhead waste water header.
SCHEDULE 8.1
FIRE PREVENTION DESIGN REQUIREMENTS
1. General
(a) Monitor nozzle coverage should be provided around the
perimeter of the unit, such that any process area can
be reached by at least two monitor nozzles.
(b) Drainage and curbing should be provided to direct fire
water to the process water sump for collection.
(c) Structural fireproofing is not anticipated. Bayer does
not typically endorse fireproofing unless high
explosion potentials exist.
(d) The cooling tower should have sprinkler protection
following current NFPA guidelines.
(e) The compressor lube oil system should have sprinkler
protection. Storage of these oils needs to be reviewed
for fire protection comments. Bayer recommends that
oil and other flammables in the storage area have
sprinkler protection.
(f) Bayer would not normally recommend sprinkler protection
for the hydrogen bottles used for burner ignition
provided the bottles are located in an open area and
remain disconnected except when in use.
(g) The ammonia surge tank should be reachable from at
least two monitors.
2. Control Room
At minimum, the building should provide a two-hour fire
resistance (typically concrete block with brick facing,
minimal wired glass windows and fire-rated doors). Due to
proximity to neighboring units and depending on the
insurance company's position, some level of blast resistance
may be required.
Once building construction is agreed upon, the following
fire protection should be provided:
(a) At minimum, smoke detection throughout, with alarms
locally and audible in a constantly attended location.
(b) Fire protective cable coating and firestopping for
significant electrical cable accumulations. Automatic
suppression -- sprinkler or gas suppression system --
is an option if cable loading is significant.
(c) If support areas (offices, labs, etc.) contain a
combustible occupancy, automatic sprinkler or other
appropriate protection should be provided.
3. Equipment Venting
(a) Emergency relief calculations are to be done per OSHA
1910.106 and NFPA 30 guidelines with consideration
given to DIERS Protocol where applicable.
4. Tank Farm
(a) Monitors to provide water spray protection for the
storage tanks.
(b) The truck loading/unloading area should be covered by
at least two monitor nozzles.