BONTANG
LPG SALES AND PURCHASE CONTRACT
BETWEEN
PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
AS SELLER
AND
JAPAN INDONESIA OIL CO., LTD.
AS BUYER
DATED
20 February 1992
TABLE OF CONTENTS
PAGE
TABLE OF CONTENTS i-iii
PREAMBLE 1
ARTICLE 1 DEFINITIONS 2-9
1.1 Accepted Date Range(s) 2
1.2 Accepted Quantities 2
1.3 Additional Quantities 2
1.4 Affiliate 2
1.5 Allowed Laytime 2
1.6 Annual Demurrage Rate 2
1.7 Annual Program 2
1.8 Bontang Facilities 3
1.9 Bontang LNG Facilities 3
1.10 Bontang LPG Facilities 3
1.11 Business Day 3
1.12 Butane 3
1.13 Buyer 3
1.14 Calculation Date 4
1.15 Conditions of Use 4
1.16 Contract 4
1.17 Contract Sales Prices 4
1.18 Cubic Meter 4
1.19 Delivery Point 4
1.20 Fixed Quantities and Fixed Quantity 4
1.21 Fixed Quantity Period 5
1.22 Force Majeure 5
1.23 Gas Supply Area 5
1.24 Independent Surveyor 5
1.25 Lifting Obligation 5
1.26 LNG 5
1.27 Loading Port 5
1.28 Loading Terminal 5
1.29 LPG 5
1.30 LPG Tanker 6
1.31 Metric Ton or MT 6
1.32 Named LPG Tanker 6
1.33 Natural Gas 6
1.34 Nominated Date Range 6
1.35 Nominated Quantities 6
1.36 Notice of Readiness 6
1.37 Production Sharing Contract(s) 6
1.38 Program Year 7
1.39 Propane 7
1.40 Quarter 7
1.41 Quarterly Schedule 7
1.42 Receiving Facilities 7
1.43 Seller 8
1.44 Shipment Month 8
1.45 Shipment Quarter 8
1.46 Suppliers 8
1.47 Supply Agreements 8
1.48 TBN 8
1.49 Terminal Procedures 8
1.50 TOTAL Group 9
1.51 Unlifted Quantities 9
1.52 UNOCAL Group 9
1.53 Used Laytime 9
1.54 VICO Group 9
1.55 1986 Contracts 9
ARTICLE 2 SALE AND PURCHASE 10
ARTICLE 3 SOURCES OF SUPPLY 11-13
3.1 Relationship to LNG Processing 11
3.2 Sources of Natural Gas 12
ARTICLE 4 COMMENCEMENT AND DURATION OF CONTRACT 14
ARTICLE 5 QUANTITIES 15-20
5.1 Required Deliveries 15
5.2 Delivery of Fixed Quantities 15
5.3 Buyer's Obligation to Lift 16
5.4 Allocation of Supplies Between Buyer and Other
Purchasers of LPG 19
ARTICLE 6 CONTRACT SALES PRICES 21-22
6.1 Contract Sales Prices 21
6.2 Calculation of Contract Sales Prices 21
ARTICLE 7 QUALITY AND STATE 23
7.1 Specifications 23
7.2 Disclaimer of Warranties 23
ARTICLE 8 TITLE AND RISK OF LOSS 24
ARTICLE 9 VERIFICATION AND MEASUREMENT 25
9.1 Inspection 25
9.2 Measurement and Samples 25
ARTICLE 10 INVOICES AND PAYMENT 26-29
10.1 Invoices and Cargo Documents 26
10.2 Other Invoices 26
10.3 Invoice Due Dates, etc. 26
10.4 Payment 27
10.5 Seller's Rights Upon Buyer's Failure to Make
Payment 28
10.6 Disputed Invoices 29
ARTICLE 11 PROGRAMMING AND SHIPPING MOVEMENTS 30-35
11.1 Annual Programs 30
11.2 Quarterly Schedule 31
11.3 Nominations 32
11.4 Notification of Expected Arrivals 34
11.5 LPG Tanker to Arrive Precooled
ARTICLE 12 DELIVERY 36-38
12.1 Delivery 36
12.2 Loading Terminal, LPG Tankers and Terminal
Procedures 36
ARTICLE 13 ARRIVAL, LOADING TIME AND DEMURRAGE 39-42
13.1 Notice of Arrival 39
13.2 Notice of Readiness and Loading 39
13.3 Laytime 40
13.4 Demurrage 42
ARTICLE 14 DEPARTURE, MISCELLANEOUS CHARGES AND
INSURANCE 43-44
14.1 Departure 43
14.2 Miscellaneous Charges 43
14.3 Insurance and Conditions of Use 43
ARTICLE 15 FORCE MAJEURE 45-49
15.1 Events of Force Majeure 45
15.2 Notice, Resumption of Normal Performance 48
15.3 Effect on Deliveries, Supplies, Term 49
ARTICLE 16 EARLY TERMINATION 50
ARTICLE 17 ARBITRATION 51
ARTICLE 18 APPLICABLE LAW 52
ARTICLE 19 CONFIDENTIALITY 53-54
ARTICLE 20 NOTICES 55-56
ARTICLE 21 ASSIGNMENT 57
ARTICLE 22 AMENDMENTS 58
ARTICLE 23 ENTIRE AGREEMENT 59
ARTICLE 24 LANGUAGE OF THE CONTRACT 60
ARTICLE 25 HEADINGS 61
ARTICLE 26 COUNTERPARTS 62-63
EXHIBIT A SPECIFICATIONS i
EXHIBIT B PROCEDURE FOR CALCULATING ANNUAL DEMURRAGE RATE ii
ATTACHMENT 1 MEASUREMENT AND SAMPLING PROCEDURES i-iv
ATTACHMENT 2 TESTING METHOD OF LPG RESIDUAL MATTER 1-8
ATTACHMENT 3 PRECISION FOR RESIDUAL MATTER (1), a & b
LPG SALES AND PURCHASE CONTRACT
THIS CONTRACT, dated as of the 20th day of February, 1992 is made
by and between PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
("PERTAMINA"), a State Enterprise of the Republic of Indonesia,
on the one hand, and JAPAN INDONESIA OIL CO., LTD. ("JIOC"), a
corporation organized under the laws of Japan, on the other hand.
In consideration of the mutual agreements contained herein the
parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
The terms or expressions below shall have the following
meanings in this Contract:
1.1 Accepted Date Range(s)
Nominated Date Range(s) acceptable to Seller or date
range(s) established by Seller pursuant to Article 11.3.
1.2 Accepted Quantities
Nominated Quantities acceptable to Seller or quantities
established by Seller in accordance with Article 11.3.
1.3 Additional Quantities
As defined in Article 6.2
1.4 Affiliate
In relation to a corporation or other entity, a corporation
or other entity which is controlled by, which controls, or which
is controlled by a corporation or other entity which also
controls, that corporation or other entity.
1.5 Allowed Laytime
As defined in Article 13.3.
1.6 Annual Demurrage Rate
As defined in Article 13.4.
1.7 Annual Program
As defined in Article 11.1.
1.8 Bontang Facilities
The Bontang LNG Facilities and the Bontang LPG Facilities.
1.9 Bontang LNG Facilities
The LNG liquefaction plant facilities located in Bontang,
East Kalimantan, Indonesia, including liquefaction trains and LNG
storage, loading and related facilities and the Natural Gas
transmission pipelines to the liquefaction plant.
1.10 Bontang LPG Facilities
The facilities in, at or near the Bontang LNG Facilities for
separation of LPG from Natural Gas and for liquefaction and
fractionation of LPG, as well as all related equipment and
facilities; Propane and Butane storage, loading and related
facilities including the Loading Terminal.
1.11 Business Day
Every day other than a Saturday or Sunday or other day on
which commercial banks are authorized to close in the city in
which the bank designated by Seller or Buyer, as the case may be,
pursuant to Article 10.4 is located.
1.12 Butane
A mixture predominantly of hydrocarbons, having the
specifications set out in Exhibit A.
1.13 Buyer
JAPAN INDONESIA OIL CO., LTD., a corporation organised under
the laws of Japan, or the successor(s) in interest of such
corporation, or the permitted assignees(s) of such corporation or
such successor(s) in interest.
1.14 Calculation Date
As defined in Article 6.1.
1.15 Conditions of Use
The conditions in effect at the Loading Port at any time as
applied by the operator of the Loading Terminal (including
requirements for undertakings as to liabilities of an LPG Tanker,
its owner, operator or charterer and Buyer) under which an LPG
Tanker is permitted to enter and use the Loading Port.
1.16 Contract
This LPG Sales and Purchase Contract, including the Exhibits
and Attachments hereto, as it may from time to time be amended,
modified, varied or supplemented in accordance with the terms of
Article 22.
1.17 Contract Sales Prices
As defined in Article 6.1.
1.18 Cubic Meter
A volume equal to the volume of a cube whose edge is one
meter.
1.19 Delivery Point
The point at the Loading Port at which the flange coupling
of Seller's loading line joins the flange coupling of the loading
manifold on board Buyer's LPG Tanker.
1.20 Fixed Quantities and Fixed Quantity
As defined in Article 5.1.
1.21 Fixed Quantity Period
As defined in Article 5.1.
1.22 Force Majeure
As defined in Article 15.1.
1.23 Gas Supply Area
The contract areas of the VICO, TOTAL and UNOCAL Production
Sharing Contracts and such other nearby contract areas in East
Kalimantan, Indonesia as Seller may designate from time to time.
1.24 Independent Surveyor
As defined in Article 9.1.
1.25 Lifting Obligation
As defined in Article 5.3.
1.26 LNG
Natural Gas in a liquid state at or below its boiling point
and at a pressure of approximately one atmosphere.
1.27 Loading Port
The port at the Bontang Facilities.
1.28 Loading Terminal
The facilities for delivery of LPG into vessels at the
Loading Port.
1.29 LPG
Propane or Butane, or as the context requires, both Propane
and Butane. A "grade of LPG" refers to either Propane or Butane.
1.30 LPG Tanker
An ocean-going vessel which is used by the Buyer for
transportation of LPG delivered under this Contract.
1.31 Metric Ton or MT
A unit of weight equal to 1,000 kilograms.
1.32 Named LPG Tanker
As defined in Article 11.3.
1.33 Natural Gas
Any hydrocarbon or mixture of hydrocarbons, consisting
essentially of methane, other hydrocarbons, and non-combustible
gases in a gaseous state, which is extracted from the subsurface
of the earth in its natural state, separately or together with
liquid hydrocarbons.
1.34 Nominated Date Range
As defined in Article 11.3.
1.35 Nominated Quantities
As defined in Article 11.3.
1.36 Notice of Readiness
As defined in Article 13.2.
1.37 Production Sharing Contract(s)
As to PERTAMINA and the VICO Group, the Amended and Restated
Production Sharing Contract dated April 23, 1990, as may be
hereafter amended, between PERTAMINA, on the one hand, and the
members of the VICO Group on the other.
As to PERTAMINA and the TOTAL Group, the Amended and
Restated Production Sharing Contract dated January 11, 1991, as
may be hereafter amended, between PERTAMINA, on the one hand, and
the members of the TOTAL Group, on the other.
As to PERTAMINA and Unocal Indonesia Ltd. ("UNOCAL"), the
Amended and Restated Production Sharing Contract dated January
11, 1991, as may be hereafter amended, between PERTAMINA, on the
one hand, and UNOCAL, on the other.
1.38 Program Year
As defined in Article 11.1.
1.39 Propane
A mixture predominantly of hydrocarbons, having the
specifications set out in Exhibit A.
1.40 Quarter
A period of three (3) calendar months commencing on January
1, April 1, July 1 or October 1.
1.41 Quarterly Schedule
As defined in Article 11.2.
1.42 Receiving Facilities
Any terminal(s) available to Buyer in Japan for discharge of
LPG, whether or not existing as of the date of this Contract.
1.43 Seller
Perusahaan Pertambangan Minyak dan Gas Bumi Negara
("Seller"), a State Enterprise of the Republic of Indonesia, or
the successor in interest of such enterprise, or the permitted
assignee of such entity or such successor in interest.
1.44 Shipment Month
As defined in Article 11.3.
1.45 Shipment Quarter
As defined in Article 11.2.
1.46 Suppliers
The VICO Group, the TOTAL Group, the UNOCAL Group and
Seller, as suppliers of their respective shares of Natural Gas
produced under the VICO, TOTAL and UNOCAL Production Sharing
Contracts from areas within the Gas Supply Area, for the
production of LPG to be sold and delivered hereunder.
1.47 Supply Agreements
As defined in Article 3.2.
1.48 TBN
As defined in Article 11.3.
1.49 Terminal Procedures
All procedures established or customarily practiced by the
operator of the Loading Terminal with respect to notifications,
nominations, berthing, lifting, loading, safety procedures for
ship and shore, documentation, departure, measurement and the
like (including, without limitation, Conditions of Use).
1.50 TOTAL Group
Total Indonesie and Indonesia Petroleum, Ltd., and their
successors in interest.
1.51 Unlifted Quantities
As defined in Article 5.3.
1.52 UNOCAL Group
Unocal Indonesia, Ltd. and Indonesia Petroleum Ltd., and
their successors in interest.
1.53 Used Laytime
As defined in Article 13.3.
1.54 VICO Group
Virginia International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East Kalimantan Limited,
Opicoil Houston, Inc. and Universe Gas & Oil Company, Inc., and
their successors in interest.
1.55 1986 Contracts
Seven LPG Sales Contracts dated July 15, 1986 made between
Seller and seven Japanese buyers including Idemitsu Kosan Co.,
Ltd. and Showa Shell Sekiyu K.K. No reference herein to the 1986
Contracts shall entitle Buyer to receive a copy of or information
concerning the 1986 Contracts; where any matter herein is
ascertained by reference to the 1986 Contracts, PERTAMINA shall
notify Buyer as to such matter, which notification shall be
conclusive and binding on Buyer.
ARTICLE 2
SALE AND PURCHASE
Seller agrees to sell and deliver at the Delivery Point, and
Buyer agrees to purchase, receive and pay for, LPG, in the
quantities and at the prices and in accordance with the other
terms and conditions set forth in this Contract.
ARTICLE 3
SOURCES OF SUPPLY
3.1 Relationship to LNG Processing
The LPG to be sold hereunder will be produced from Natural
Gas in conjunction with the production and processing of Natural
Gas into LNG at the Bontang LNG Facilities. It is understood that
the production of LPG at the Bontang Facilities is dependent on
the processing of Natural Gas into LNG and that any interruption,
curtailment or suspension of LNG production or deliveries of LNG
at the Bontang Facilities will directly and adversely affect the
production and availability for export of LPG from such
facilities.
Furthermore, Seller has entered into and made certain
commitments prior to the date hereof to its LNG buyers in
respect of operational limitations, quantities and specifications
of LNG produced at the Bontang Facilities. The annual Fixed
Quantities have been determined as of the date hereof after
taking these quantities, specifications and limitations into
account. As soon as Seller becomes aware of any circumstances
which may require Seller to take action to meet the above LNG
commitments which would affect LPG production, Seller shall
promptly enter into good faith discussions with Buyer to
determine whether alternative action is available or possible
that could enable Seller to satisfy both its commitments to Buyer
as well as the LNG commitments referred to above. It is
understood that Seller shall take reasonable actions to avoid the
occurrence of any event which would affect LPG production.
However, if Seller nevertheless determines that it must take
action which affects LPG production, such circumstances will
constitute an event of Force Majeure under Article 15.
3.2 Sources of Natural Gas
(a) The Natural Gas from which LPG to be sold hereunder is
to be extracted is to be produced from the Gas Supply Area.
Nothing herein shall be construed, however, as conferring upon
Buyer any interest or right in the Gas Supply Area or in Natural
Gas or any hydrocarbon deposit or producing area. No warranty
express or implied is given, nor is there to be construed any
representation, as to the quantity of Natural Gas in, or its
recoverability from, the Gas Supply Area. If during the term of
this Contract Suppliers obtain information from their activities
which indicate unforeseen changes in the proved remaining
recoverable reserves of Natural Gas in the Gas Supply Area such
that Seller's ability to perform Seller's obligation hereunder
may be materially and adversely affected, Seller shall promptly
inform Buyer of such situation.
(b) Seller represents that Seller will maintain throughout
the term hereof the right to sell all quantities of LPG to be
sold hereunder. In this connection, Seller represents that it has
executed or will execute from time to time, as required in order
to maintain the right to sell all of the quantities of LPG to be
sold hereunder, agreements between itself and the other Suppliers
under which agreements ("Supply Agreements") Suppliers shall
supply Natural Gas from the Gas Supply Area for processing into
LPG at the Bontang LPG Facilities and shall make available, for
sale by Seller hereunder, their respective interest in the
quantities of LPG to be sold hereunder.
(c) It is understood that, by virtue of the Supply
Agreements, the VICO Group, the TOTAL Group and the UNOCAL Group,
as parties to such Supply Agreements, shall be third-party
beneficiaries of this Contract. The foregoing sentence shall not
be construed as discharging Seller of its obligation to supply
LPG to Buyer in accordance with the terms of this Contract.
ARTICLE 4
COMMENCEMENT AND DURATION OF CONTRACT
This Contract shall come into full force and effect as of
and from the date hereof, and shall continue in full force and
effect thereafter until December 31, 1994, unless terminated
sooner pursuant to the terms of this Contract; provided, however,
that such provisions of this Contract as are required to give
effect to the rights and obligations of the parties which arise
prior to such date shall continue in full force and effect until
the expiration of the parties' respective obligations to sell and
purchase LPG hereunder.
If Seller and Buyer so agree at least one (1) year prior to
the date this contract would otherwise expire, the term of this
contract may be extended for an additional term on such terms and
conditions as may be mutually agreed.
ARTICLE 5
QUANTITIES
5.1 Required Deliveries
During each annual period (each such period is hereinafter
referred to as a "Fixed Quantity Period") specified below, Seller
shall sell and deliver to Buyer, and Buyer shall purchase,
receive and pay for, at the applicable Contract Sales Prices, the
quantity of LPG specified for Buyer for such period (each such
quantity is hereinafter individually referred to as a "Fixed
Quantity" and as "Fixed Quantities" when referring to more than
one such quantity) as follows :
Fixed Quantity Fixed Quantities for
Period Buyer in Thousands of
Metric Tons of LPG
__________________________________________________
Jan 1 - Dec. 31, 1992 85
Jan 1 - Dec. 31, 1993 85
Jan 1 - Dec. 31, 1994 85
__________________________________________________
5.2 Delivery of Fixed Quantities
(a) Within each calendar year the quantities to be
delivered by Seller and received by Buyer shall be delivered
and received at rates and intervals which are reasonably
constant over the course of such period, after taking into
consideration all commitments of Seller, the requirements of
other purchasers of LPG from the Bontang LPG Facilities,
constraints at the Loading Port and the Loading Terminal and
fluctuations in production rates of LPG due to changes in
production rates of LNG at the Bontang LNG Facilities, so as
to ensure as nearly as practicable uninterrupted operation
of the Bontang Facilities. Buyer further agrees that it
will not be entitled to any quantities in any Quarter to the
extent that such quantities, when added to all other
quantities of LPG scheduled to be delivered from the loading
port to Idemitsu Kosan Co., Ltd. and Showa Shell Sekiyu K.K.
in the same Quarter, exceed twenty five percent (25 %) of
the sum of Buyer's Fixed Quantity for the Fixed Quantity
Period plus such other quantities to be delivered from the
loading port to Idemitsu Kosan Co., Ltd., and Showa Shell
Sekiyu K.K. in the same Fixed Quantity Period. Seller and
Buyer agree to cooperate with each other for smooth delivery
of Fixed Quantities.
(b) The Fixed Quantity to be delivered to Buyer in any
Fixed Quantity Period will consist of each grade of LPG in
accordance with the following: forty-five (45) to fifty-five
(55) percent Propane and fifty-five (55) to forty-five (45)
percent Butane.
5.3 Buyer's Obligation to Lift
(a) Buyer will be obligated to lift, in accordance with
Article 11, the Fixed Quantity during each Fixed Quantity
Period (such obligation is hereinafter referred to as the
"Lifting Obligation" of Buyer). The Lifting Obligation of
Buyer shall be reduced by the quantity of LPG which Buyer
was unable to receive because of Force Majeure affecting
Buyer's ability to receive LPG or because of Seller's
failure to make such quantity available for delivery due to
Force Majeure affecting Seller or due to breach by Seller of
its obligations hereunder.
(b) If Buyer should fail to take delivery of LPG or if
at any time Seller shall have reason to believe that Buyer
will be unable to take delivery of LPG in accordance with
Article 11, Seller shall so notify Buyer, specifying the
quantities of each grade of LPG involved (quantities with
respect to which Seller issues a notice pursuant to this
paragraph (b) are hereinafter referred to as the "Unlifted
Quantities"). Upon receipt of such notice from Seller, Buyer
shall promptly advise Seller in writing whether Buyer wishes
to reschedule the lifting of the Unlifted Quantities during
the remainder of the Fixed Quantity Period in question, and
if so, specifying a Nominated Date Range. If such
rescheduling is acceptable to Seller, having regard to
Seller's and the Loading Terminal's operations and schedules
and, in particular, the provisions of Article 5.2 (a),
Seller will so notify Buyer and the Unlifted Quantities will
be rescheduled and lifted pursuant to Article 11
accordingly.
(c) If Buyer fails promptly to provide notice as
provided in paragraph (b) or if the rescheduling pursuant to
paragraph (b) above is not acceptable to Seller, Seller may
take at any time thereafter whatever steps Seller
determines, in its sole discretion, are appropriate and may
flare, sell, curtail LPG production, "spike" or combine such
LPG with LNG or condensate or otherwise dispose of Unlifted
Quantities. Seller shall use all reasonable efforts to sell
such Unlifted Quantities to a third party. If Seller flares,
sells, spikes or otherwise disposes or curtails production
of LPG, Seller shall so notify Buyer and keep Buyer apprised
of all such actions being taken and shall provide Buyer with
reasonable access to plant operating data and records
relating thereto, including Seller's records of sales to
third parties.
(d) If Buyer fails to lift the Accepted Quantities
within the Accepted Date Range, as the same may have been
modified by Seller pursuant to paragraph (b) above, Buyer
will pay to Seller the amount equivalent to the "Damages"
determined in accordance with (i) below after the deduction
of the sum of the "Credits" referred to in paragraph (ii)
below; provided, however, that if the sum of such Credits
equals or exceeds the Damages, Seller shall have no
obligation to the Buyer to account for the Credits or any
such excess.
(i) Damages shall be calculated as follows :
D = (AQ x 95% - LQ) x P
D -- Damages
AQ -- Accepted Quantity (less any quantities
rescheduled by Seller).
LQ -- That proportion of Accepted Quantities
lifted by Buyer during the Accepted Date
Range.
P -- The Contract Sales Price for the
applicable grade of LPG in effect on the
last day of the Accepted Date Range of the
Accepted Quantity.
(ii) Credits for any acts taken by Seller pursuant
to paragraph (c) above in respect of Unlifted Quantities
shall be calculated in accordance with the following :
(A) the amount of proceeds actually received
by Seller for any sales made to a third party referred to in
paragraph (c) above (after deducting direct expenses of the
sale) up to the amount Seller would have received from Buyer
based on the Contract Sales Prices in effect on the last day
of the Accepted Date Range; and
(B) the value of Butane "spiked" with
condensate from Natural Gas which is itself sold to third
parties calculated on the basis of ninety percent (90%) of
the Contract Sales Price for Butane in effect on the last
day of the Accepted Date Range; and
(C) the value of LPG "spiked" with LNG or LPG
not produced as a consequence of curtailed production
("Spiked and Not Produced LPG") calculated on the basis of
fifty percent (50%) of the Contract Sales Price for the
applicable grade of LPG in effect on the last day of the
Accepted Date Range, provided, the aggregate quantity of
Spiked and Not Produced LPG in the Fixed Quantity Period in
question does not exceed ten percent (10%) of the Fixed
Quantity. No credit will be given for Spiked and Not
Produced LPG exceeding ten percent (10%) of the Fixed
Quantity for such Fixed Quantity Period.
(e) The undertakings referred to in Article 11.3 (f)
shall be deemed to have been discharged in case that the
actual lifting is made within the plus or minus five percent
(5%) operational lifting tolerance referred to in Article
12.1 (d).
(f) Seller shall invoice the amount calculated on the
basis of (d) above, to Buyer on the forty-fifth (45th) day
of the next calendar year following the end of the year in
which such failure to lift has occurred. Such invoice shall
be payable by Buyer within fifteen (15) days of receipt.
5.4 Allocation of Supplies Between Buyer and Other
Purchasers of LPG
If the supplies of Propane and/or Butane capable of being
produced and loaded at the Bontang Facilities are or are
reasonably anticipated to be in any period less than the
commitments of Seller to supply the applicable grade of LPG
to be shipped from the Loading Port in that period
(including the commitment to Buyer hereunder), and such
condition is due to an event of Force Majeure affecting the
Loading Port or the Bontang Facilities or the Gas Supply
Area, then the supplies of such grade of LPG which remain
available will be allocated first to those commitments of
Seller providing for deliveries of fixed contract quantities
from the Loading Port over a term of at least ten (10)
years.
ARTICLE 6
CONTRACT SALES PRICES
6.1 Contract Sales Prices
The prices applicable to quantities of Propane and Butane
delivered hereunder and to quantities of LPG not taken by
Buyer for which Buyer is subject to payment of Damages
pursuant to Article 5.3 are herein called the "Contract
Sales Prices", and are expressed in United States Dollars
per Metric Ton ("U.S. $ / MT"). Buyer shall pay for LPG, in
the manner provided in Article 10, at the Contract Sales
Price for the applicable grade of LPG calculated in
accordance with Article 6.2 as of the bill of lading date,
or, in the case of LPG not taken for which Buyer is subject
to payment of Damages pursuant to Article 5.3, as of the
last day of the applicable Accepted Date Range. Either such
date is hereinafter referred to as the "Calculation Date".
6.2 Calculation of Contract Sales Prices
The Contract Sales Price ("CSP") for the applicable grade
of LPG shall be calculated as of the Calculation Date in
accordance with the following formula :
CSP = A + U.S.$2.00
where 'A' is the price in U.S.$ / MT applicable at the
Calculation Date to Additional Quantities of LPG sold in the
relevant Fixed Quantity Period from the Bontang LPG
Facilities to the buyers party to the 1986 Contracts;
"Additional Quantities" for this purpose means quantities,
if any, equal to the difference between 385,000 Metric Tons
and the fixed quantities (as adjusted by Seller) applicable
to the Bontang LPG Facilities under the 1986 Contracts, sold
to any buyer thereunder pursuant to an offer by Seller under
the side letters to the 1986 Contracts; provided that if
there are no such Additional Quantities, the Contract Sales
Price shall be:
(i) the price applicable to additional quantities
delivered from the Arun LPG facilities at Arun, North
Sumatra and sold in the relevant Fixed Quantity Period to
the buyers party to the 1986 Contracts plus U.S.$2.00;
or, in the absence of any such price,
(ii) such price (not in any event less than the contract
sales price under the 1986 Contracts + U.S.$2.00) as Buyer
and Seller shall agree having regard to prevailing market
conditions.
ARTICLE 7
QUALITY AND STATE
7.1 Specifications
Propane and Butane purchased and sold hereunder shall be
delivered to Buyer in a refrigerated liquid condition and
shall have the respective specifications set forth in
Exhibit A for Propane and Butane.
7.2 Disclaimer of Warranties
There are no guaranties or warranties express or implied
of merchantability, fitness, suitability of the LPG for any
particular purpose, or otherwise, or of its composition
except as stated in Article 7.1.
ARTICLE 8
TITLE AND RISK OF LOSS
Delivery shall be deemed completed and title and risk of
loss shall pass at the Loading Port as LPG reaches the
Delivery Point at which point Seller's responsibility shall
cease and Buyer shall assume all risk of loss, damage,
deterioration or evaporation as to the LPG so delivered. It
is expressly understood that the passage of title and risk
as aforesaid is not conditioned on delivery of a bill of
lading or other title document.
ARTICLE 9
VERIFICATION AND MEASUREMENT
9.1 Inspection
The quality and quantity of each shipment of LPG
hereunder shall be determined by measurement and
calculations conducted at the Loading Port by an independent
firm of inspectors (to be mutually agreed upon) in
accordance with agreed sampling, measurement, and
calculation procedures based on recognized good standard
practice (such firm is hereinafter referred to as the
"Independent Surveyor"). On completion of loading, the
Independent Surveyor shall prepare and sign certificates
stating the quality and quantity of each grade of LPG
loaded, such certificates to conform to a mutually-agreed
standard form for this purpose. The Independent Surveyor
shall promptly provide Seller with a copy of such
certificates and Seller shall thereupon prepare a bill of
lading in accordance with the reasonable instructions of
Buyer. The bill of lading shall be promptly signed and
issued by the vessel's master or the authorised
representative of the carrier. The data in the certificates
of quality and quantity prepared by the Independent Surveyor
shall, absent fraud or manifest error, and subject to the
provisions of Article 17, be binding and conclusive upon
both parties, and shall be used by Seller in preparing the
invoice. Any costs attendant to utilizing the Independent
Surveyor shall be borne equally by Seller and Buyer.
9.2 Measurement and Samples
Measurement of the quantities and the sampling and
analysis for the purpose of determining the quality of the
LPG in each shipment shall be carried out in accordance with
the procedures set forth in Attachment 1 to this Contract,
and samples shall be retained by Seller for at least ninety
(90) days.
ARTICLE 10
INVOICES AND PAYMENT
10.1 Invoices and Cargo Documents
Promptly after completion of loading of each LPG Tanker,
Seller shall furnish by telex or telegram to Buyer an
invoice, stated in U.S. Dollars, in the amount of the
Contract Sales Prices for the number of Metric Tons
delivered. At the same time, Seller shall send to Buyer a
signed copy of the invoice and relevant documents showing
the basis for the calculation thereof, together with such
other customary documents concerning the cargo as may be
reasonably requested by Buyer for the purpose of Japanese
customs clearance.
10.2 Other Invoices
Except as provided in Article 10.1, in the event that any
moneys are due from one party to the other hereunder
(including, without limitation, amounts payable pursuant to
Article 5.3 on account of failure by Buyer to meet its
Lifting Obligation) then the party to whom such moneys are
due shall furnish or cause to be furnished an invoice
therefor and relevant documents showing the basis for the
calculation thereof. Such invoice may be sent by telex or
telegram, provided that signed copies of such invoice and
such relevant documents are also sent at the same time.
10.3 Invoice Due Dates, etc.
(a) Each invoice to Buyer referred to in Article 10.1
shall become due and payable by Buyer on the thirtieth
(30th) calendar day after the date of the bill of lading for
the LPG cargo in question. The failure by a vessel's master
or authorised representative of the carrier to promptly sign
and issue a bill of lading shall not constitute grounds for
delay of payment by Buyer. Each invoice referred to in
Article 10.2 (except the invoice referred to in Article 5.3)
shall become due and payable on the thirtieth (30th)
calendar day after receipt thereof by the party to which it
was sent.
(b) If any invoice would become due on a date which is
not a Business Day, such invoice shall, notwithstanding the
provisions of paragraph (a) above, become due and payable on
the next succeeding Business Day.
(c) In the event the full amount of any invoice is not
paid by either Seller or Buyer when due, any unpaid amount
thereof shall bear interest from the due date until paid, at
an interest rate, compounded annually, two (2) percentage
points greater than the time-weighted average rate being
charged during the period of delinquency by Citibank, N.A.,
New York, New York, to its prime commercial customers for
ninety (90) days loans.
10.4 Payment
Buyer shall pay, or cause to be paid, in U.S. Dollars by
telegraphic transfer remittance in immediately-available
funds, all amounts which become due and payable by Buyer
pursuant to any invoice issued hereunder, to a bank account
or accounts in the United States to be designated by Seller,
provided that each such designation or change thereto shall
be effective only upon the written consent of the VICO
Group, the TOTAL Group and the UNOCAL Group, as third-party
beneficiaries hereunder. Seller shall pay, or cause to be
paid, in U.S. Dollars by telegraphic transfer remittance in
immediately-available funds, all amounts which become due
and payable by Seller pursuant to any invoice issued
hereunder, to a bank account designated by Buyer. The
paying party shall not be responsible for a designated
bank's disbursement of amounts remitted to such bank, and a
deposit in immediately-available funds of the full amount of
each invoice with such bank shall constitute full discharge
and satisfaction of the obligations under this Contract for
which such amounts were remitted. Each payment of any
amount owing hereunder shall be in the full amount due
without reduction or offset for any reason, including,
without limitation, taxes, exchange charges or bank transfer
charges.
10.5 Seller's Rights Upon Buyer's Failure to Make Payment
If payment of any invoice for quantities of LPG sold
hereunder or for that portion of Buyer's Lifting Obligation
for which Buyer is subject to payment of Damages pursuant to
Article 5.3 (d) is not made within ten (10) days after the
due date thereof, Seller shall be entitled, upon giving
written notice to Buyer, to suspend subsequent shipments and
sales to Buyer until the amount of such invoice and interest
thereon has been paid. Buyer shall not be entitled to any
make-up rights in respect of such suspended shipments and
sales. If any such invoice is not paid within thirty (30)
days after the due date thereof, then Seller shall have the
right, at Seller's election, to terminate this Contract and
such termination shall become effective upon the date of
such notice of termination from Seller. Seller's rights
under this Article 10.5 and Seller's exercise of any of such
rights shall be without prejudice to any other rights and
remedies of Seller arising hereunder or by law or otherwise
(including without limitation the right of Seller to demand
adequate security of Buyer's performance under circumstances
permitted by New York law, and to receive payment of all
obligations and claims which arose or accrued prior to
termination or by reason of default in payment by Buyer).
10.6 Disputed Invoices
In the event of disagreement concerning any invoice, the
invoiced party shall make provisional payment of the total
amount thereof and shall immediately notify the other party
of the reasons for such disagreement, except that in the
case of obvious error in computation the correct amount
shall be paid disregarding such error. Invoices may be
contested or modified only if, within a period of ninety
(90) days after receipt thereof, Buyer or Seller serves
notice on the other, questioning their correctness. If no
such notice is duly served, invoices shall be deemed correct
and accepted by both parties. Promptly after resolution of
any dispute as to an invoice, the amount of any overpayment
or underpayment shall be paid by Seller or Buyer to the
other, as the case may be, plus interest at the rate
provided in Article 10.3 from the date payment was due to
the date of payment.
ARTICLE 11
PROGRAMMING AND SHIPPING MOVEMENTS
11.1 Annual Programs
Not later than October fifteenth (15th) of each year,
Seller shall give written notice to Buyer of the quantities
of Propane and Butane available for delivery hereunder at
the Loading Port during the next calendar year.
On or before October twenty-fifth (25th) of each calendar
year after receipt of the foregoing notice, Buyer shall
advise Seller in writing of the portion (if any) of the
Fixed Quantity Buyer wishes to take during each Quarter of
the following year (the "Program Year") specifying the
quantities of each grade of LPG it wishes to take in each
such Quarter. Seller and Buyer shall thereupon consult
together with a view to reaching agreement, by November
eighth (8th) of the year preceding the Program Year, upon a
program for the quantities of each grade of LPG to be
shipped hereunder from the Loading Port during each Quarter
during the Program Year (the "Annual Program"). If no such
agreement shall have been reached as to an Annual Program by
November eighth (8th) of the year preceding the Program
Year, or if Buyer shall have not notified Seller of its
requested quarterly quantities of LPG by October twenty-
fifth (25th) of such year, Seller shall be entitled, using
reasonable discretion, to establish upon notice made to
Buyer by November tenth (10th) of the same year, the Annual
Program for the Program Year (including, without limitation,
the breakdown of the Fixed Quantity into each grade of LPG).
In so doing, Seller shall take into consideration the
contents of the above notice from Buyer, Seller's
commitments to other purchasers of LPG from the Bontang LPG
Facilities, the production ratio of Butane and Propane at
the Loading Port and the provisions of Article 5.2.
For the Program Year 1992, Seller and Buyer shall
exchange the above information promptly upon execution of
this Contract and shall thereupon consult together upon the
Annual Program; but if the Annual Program is not agreed
within 14 days after execution hereof Seller may establish
the Annual Program on the basis provided in the foregoing
paragraph.
11.2 Quarterly Schedule
(a) Not later than the twenty-fifth (25th) day of the
first month of each Quarter commencing with the first
Quarter of 1992, Buyer shall advise Seller in writing of the
quantities of each grade of LPG Buyer wishes to take during
each calendar month of the succeeding Quarter (the "Shipment
Quarter") with respect to each calendar month based on the
quantities established under the Annual Program for such
Quarter; provided, however, that with respect to such notice
given in the last Quarter of any calendar year, the
quantities shall be based on Buyer's notice referred to in,
and shall be subject to adjustment in accordance with,
Article 11.1.
(b) Following receipt of the notice referred to in
Article 11.2 (a), Seller and Buyer shall thereupon consult
together with a view to reaching agreement upon, by the
eighth (8th) day of the second month of the Quarter
preceding the Shipment Quarter, a loading schedule for the
Shipment Quarter, specifying the month in which each
shipment of LPG is to be made in the Shipment Quarter and
the quantities of each grade of LPG to be shipped
("Quarterly Schedule"). If no such agreement shall have
been reached as to a Quarterly Schedule by the eighth (8th)
day of the second month of the Quarter preceding the
Shipment Quarter, or if Buyer shall have not issued a notice
to Seller in accordance with Article 11.2 (a), Seller shall
be entitled, using reasonable discretion, to establish, upon
notice made to Buyer by the tenth (10th) day of the second
month of the Quarter preceding the Shipment Quarter, the
Quarterly Schedule. In so doing, Seller shall take into
consideration the contents of the notice from Buyer referred
to in Article 11.2 (a), Seller's commitments to other
purchasers of LPG from the Bontang LPG Facilities, and the
provisions of Article 5.2.
(c) For the first Shipment Quarter in 1992, Buyer shall
advise Seller of the information in paragraph (a) above
promptly upon execution of this Contract and Buyer and
Seller shall thereupon consult together upon the Quarterly
Schedule; but if the Quarterly Schedule is not agreed within
14 days after execution hereof Seller may establish the
Quarterly Schedule on the basis provided in the foregoing
paragraph.
11.3 Nominations
(a) An Accepted Date Range shall be a five (5) day
period of time determined in respect of each shipment
hereunder in accordance with the provisions of this Article.
Each date range proposed by either party or established by
the Seller as the Accepted Date Range shall, unless
otherwise agreed, be a period of five (5) days.
(b) No later than the twentieth (20th) day of the second
calendar month preceding each month in which shipments of
LPG are projected to be made hereunder in accordance with
the most recent Quarterly Schedule covering such month
("Shipment Month"), Buyer shall notify Seller of the
range(s) of days which Buyer proposes ("Nominated Date
Range(s)"), as to each shipment in that month, the quantity
of each grade of LPG to be shipped ("Nominated Quantities")
based on the quantities established in the Quarterly
Schedule for such month, and the name of the LPG Tanker
("Named LPG Tanker") or that it is a "to be named" LPG
Tanker ("TBN").
(c) Seller shall respond to Buyer's notice referred to
in paragraph (b) above no later than the first (1st) day of
the calendar month immediately preceding the Shipment Month
as to whether Nominated Date Range(s), Nominated Quantities
and other requests are acceptable, and if they are, the
Nominated Date Range(s) and Nominated Quantities of each
grade of LPG shall be the Accepted Date Range(s) and the
Accepted Quantities for the Shipment Month. If the
Nominated Date Range(s) or Nominated Quantities or other
requests are not acceptable to Seller, Seller shall propose
the minimum modifications to Buyer's requests required to
accommodate Seller's and the Loading Terminal's operations
and schedules. Buyer and Seller shall consult together with
a view to reaching agreement upon, by the sixth (6th) day of
the calendar month immediately preceding the Shipment Month,
a mutually-acceptable schedule of shipments, quantities and
date range(s).
(d) If no agreement shall have been reached as to date
range(s) and/or quantities by the sixth (6th) day of the
calendar month immediately preceding the Shipment Month,
Seller shall be entitled, using reasonable discretion, to
establish, upon notice to Buyer by the eighth (8th) day of
the calendar month immediately preceding the Shipment Month,
the necessary date range(s) for shipments hereunder, which
shall be deemed to be the Accepted Date Range(s), and/or the
quantity of each grade of LPG to be shipped in relation to
each such range, which shall be deemed to be the Accepted
Quantities, for the Shipment Month.
(e) For the first Shipment Month, if so required due to
the Quarterly Schedule proposed by Buyer pursuant to Article
11.2, Buyer shall advise Seller of the information in
paragraph (b) above promptly upon execution of this Contract
and Buyer and Seller shall thereupon consult together upon a
mutually-acceptable schedule of shipments, quantities and
date range(s); but if such schedule is not agreed within
fourteen (14) days after execution hereof Seller may
establish such schedule on the basis provided in the
foregoing paragraph.
(f) Buyer and Seller shall be deemed to have undertaken
to receive and to deliver, respectively, the Accepted
Quantities during the Accepted Date Range(s).
11.4 Notification of Expected Arrivals
Not later than seven (7) days prior to the first day of
each Accepted Date Range, Buyer shall notify Seller of the
expected date of arrival of the LPG Tanker scheduled to
receive the LPG, and written instructions regarding the
making up and disposition of bills of lading and orders for
port(s) of discharge, which, if reasonable, shall be
complied with by Seller. Buyer shall notify Seller of the
name of any LPG Tanker previously advised as a TBN as soon
as possible but in no event later than the last day for the
naming of a vessel under Terminal Procedures. Buyer may
thereafter substitute another LPG Tanker of similar class,
type, size, capacity and position, provided all other
provisions hereof are complied with and further provided
that the advice of substitution is timely under Terminal
Procedures.
11.5 LPG Tanker to Arrive Precooled
Upon arrival at the Loading Port, any LPG Tanker which
does not have its cargo tanks adequately precooled, or is in
any other way not fit or ready for the receipt of the LPG as
required by the Terminal Procedures will, if scheduling and
other operational considerations permit, be cooled down at
the berth at Buyer's expense. Laytime will be extended for
any time required for cooldown, such time to begin when the
vessel starts to receive LPG for cooling and to end when the
required loading temperature is reached. Cooldown LPG will
be measured in the same manner as LPG for delivery and
charged at the Contract Sales Prices in effect at the time
of delivery. Should the extended berth time cause a
conflict with LNG delivery schedules, Buyer shall cause the
LPG Tanker to vacate the berth and return later to continue
cooldown or loading, as the case may be. All laytime,
harbor fees and port charges for vacating and returning to
the berth under these circumstances will be for Buyer's
account.
ARTICLE 12
DELIVERY
12.1 Delivery
(a) Delivery of the LPG shall be made F.O.B. by Seller
to Buyer at the Loading Terminal in bulk into LPG Tankers
arranged by Buyer. The LPG shall be transported to and
unloaded at the Receiving Facilities.
(b) Buyer shall return to Seller free of charge the
vapor from Buyer's LPG Tankers during loading and cooling
operations.
(c) It is intended that all deliveries will be made in
full LPG Tanker cargo lots. However, Seller and Buyer will
endeavour to accommodate the other party's request for part-
cargo shipments if such accommodation is possible taking
into account shipping and production schedules and ullage at
the Bontang Facilities.
(d) Buyer shall take delivery of the Accepted Quantities
of LPG scheduled to be loaded, subject to a plus or minus
five percent (5%) operational lifting tolerance to account
for operational limitations of LPG Tankers.
12.2 Loading Terminal, LPG Tankers and Terminal
Procedures
(a) Buyer shall provide LPG Tankers at the Loading Port
to take delivery of LPG which have the following general
specifications and such other specifications as may be
required pursuant to paragraph (b) below:
LPG Tanker capacity : 15,000 to 100,000 Cubic Meters
Total deadweight : up to 65,000 metric tons
Length overall : 159 to 255 meters
Beam extreme : up to 40 meters
Maximum draft : up to 12.5 meters
(b) Seller shall provide at the Loading Terminal a
berth, mooring or other area capable of handling LPG Tankers
which are within the specifications set out in paragraph (a)
above and Article 12.1 (c). Seller shall furnish with
reasonable dispatch, upon Buyer's request therefore, all
necessary information concerning restrictions applicable at
the Loading Port and the Loading Terminal with respect to
maximum draft, length and the like in addition to those set
out in paragraph (a) above, Terminal Procedures relevant to
LPG Tanker operations, and special or non-customary
requirements of governmental authorities at the Loading Port
with respect to LPG Tanker operations therein. Buyer shall
be deemed to be fully familiar with such restrictions,
Terminal Procedures, and requirements, provided that Seller
has furnished and Buyer has received such information as has
been requested as aforesaid. Buyer shall not nominate or
furnish an LPG Tanker which does not conform to the
aforesaid restrictions, Terminal Procedures, and
requirements. Buyer acknowledges that the Terminal
Procedures and regulations of governmental authorities with
jurisdiction over the Loading Port apply to the loading and
receipt of the LPG and to Buyer's LPG Tankers thereat. If
Buyer's LPG Tanker does not conform to the Terminal
Procedures or the requirements or regulations of the
governmental authorities with respect to safety, size, age
of the vessel, vessel movements, navigation and operating
standards, discharge, and the like, or the master of the LPG
Tanker fails to execute Conditions of Use then employed at
the Loading Port, Seller may refuse to berth or load the LPG
Tanker and any delays or expenses of Seller and Buyer due to
such non-conformance, whether Seller so refuses or proceeds
with berthing or loading, shall be for Buyer's account.
(c) Each of Buyer's LPG Tankers shall be designed and at
all times be equipped and manned so as to safely receive, at
the Delivery Point, Propane and Butane simultaneously for
loading at a rate for each grade of LPG of not less than
1,700 Cubic Meters per hour or, if loading one grade of LPG
through two loading arms (if the LPG Tankers' manifold
configuration so permits), 3,400 Cubic Meters per hour, or
if loading Butane and Propane sequentially, at a rate of not
less than 1,700 Cubic Meters per hour.
(d) The provisions of this Contract applicable to LPG
Tankers shall apply whether an LPG Tanker is owned or
operated by Buyer or otherwise employed by Buyer.
ARTICLE 13
ARRIVAL, LOADING TIME AND DEMURRAGE
13.1 Notice of Arrival
(a) Buyer shall arrange for each LPG Tanker to report by
radio to the Loading Terminal or to Seller at the Loading
Port a notice of the LPG Tanker's estimated time of arrival,
initially within seventy-two (72) hours prior to the LPG
Tanker's arrival at the Loading Port. Such notice shall
include a statement of the expected temperature of the
bottom of the cargo tanks on arrival.
(b) Buyer shall arrange for each LPG Tanker to report by
radio to the Loading Terminal or to Seller at the Loading
Port forty-eight (48) and twenty-four (24) hours before
arrival thereat (or at such other times as Buyer may be
advised by Seller), stating the estimated time of arrival.
13.2 Notice of Readiness and Loading
As soon as the LPG Tanker arrives at the sea buoy of the
Loading Port, the master shall give notice of readiness to
Seller ("Notice of Readiness"); provided, however, that in
the event an LPG Tanker should arrive at the Loading Port
prior to the first day of the Accepted Date Range, Notice of
Readiness shall be deemed effective at the earlier of (i)
06.00 a.m. local time on the first day of the Accepted Date
Range or such earlier time as applicable port regulations
designate that vessels are permitted to proceed to berth, or
(ii) the time loading commences.
13.3 Laytime
(a) The allowed laytime for Seller to load each LPG
Tanker ("Allowed Laytime") shall be four (4) hours plus
either (i) one hour for every 1,700 Cubic Meters comprising
the Accepted Quantities, if loading Propane or Butane
sequentially, or (ii) one hour for every 3,400 Cubic Meters
comprising the Accepted Quantities, if loading Propane and
Butane simultaneously or if loading one grade of LPG through
two loading arms, subject to adjustment as provided below
and in Article 12.1 (d).
(b) The actual laytime for each LPG Tanker ("Used
Laytime") shall commence (i) six (6) hours after the time
when the Notice of Readiness is tendered by the LPG Tanker's
master or six (6) hours after the Notice of Readiness is
deemed effective pursuant to Article 13.2, whichever is
later, or (ii) when the LPG Tanker is "all fast alongside"
the berth and ready to receive cooldown LPG or cargo,
whichever of the foregoing first occurs, and shall end when
the loading and return lines of the LPG Tanker are
disconnected from the Loading Terminal's loading and return
lines. Where delay is caused to an LPG Tanker getting into
berth after giving Notice of Readiness for any reason over
which neither Seller nor the Loading Terminal has control,
such delay shall not count as Used Laytime. If an LPG
Tanker's Notice of Readiness is tendered on a date later
than the last day of the Accepted Date Range, the LPG Tanker
shall await its turn to load in accordance with Terminal
Procedures, and Used Laytime shall commence when the LPG
Tanker is "all fast alongside" the berth and ready to
receive LPG. Any delay due solely to the LPG Tanker's
condition or breakdown or inability of the LPG Tanker's
facilities to load LPG within the time allowed or at the
rate set forth in Article 12.2 (c) shall not count as Used
Laytime or time on demurrage.
(c) The periods mentioned below shall be reduced from
Used Laytime and shall not count as time on demurrage:
(i) any period during which proceeding from the
anchorage, berthing, loading or clearing the LPG Tanker to
proceed to sea after completion of loading is delayed,
hindered or suspended by Buyer, the LPG Tanker's owner, the
LPG Tanker's master, or any third party or governmental
authority for reasons of safety, weather or for other
reasons over which Seller has no control;
(ii) any period of delay attributable to the
operation of the LPG Tanker including the period of time
such LPG Tanker awaits a berth by reason of the LPG Tanker
being unable to receive LPG under this Contract or under the
Terminal Procedures;
(iii) any period during which the LPG Tanker's tanks
are being cooled to a temperature that will permit
continuous loading of LPG in accordance with Terminal
Procedures;
(iv) any period in excess of Allowed Laytime
required to load the LPG Tanker due to the LPG Tanker's
inability to load at the Loading Terminal's normal
operational loading rate due to limitations placed on the
loading rate by the LPG Tanker; and
(v) any period during which the LPG Tanker is
waiting for all necessary port clearances.
13.4 Demurrage
(a) If Used Laytime exceeds Allowed Laytime (as adjusted
in accordance with Article 13.3) in loading any LPG Tanker,
Seller shall pay to Buyer demurrage at the "Annual Demurrage
Rate" per day in effect in the calendar year in which Used
Laytime commenced for the LPG Tanker. The "Annual Demurrage
Rate" for each calendar year shall be the rate (in U.S.
Dollars per day) to be determined in accordance with the
procedures set out in Exhibit B, and such rate shall be
notified to Buyer as soon as possible after it has been
determined.
(b) If demurrage shall be incurred at the Loading Port
by reason of fire, explosion, storm or by a strike, lockout,
stoppage or restraints of labour or by breakdown of
machinery or equipment in or about the plant of Seller,
demurrage shall be reduced by one-half of the amount set out
in Exhibit B. Seller shall not be liable for any demurrage
for delay caused by strike, lockout, stoppage or restraints
of labour for master, officers and crew of the LPG Tanker or
tugboat or pilots.
(c) Buyer shall invoice Seller for amounts due under
this Article 13.4 and Seller shall pay the invoice in
accordance with the terms of Article 10.
ARTICLE 14
DEPARTURE, MISCELLANEOUS CHARGES AND INSURANCE
14.1 Departure
Each LPG Tanker shall vacate the berth as soon as loading
is completed, subject to and in accordance with the Terminal
Procedures. Any loss or damage incurred by Seller as a
result of the LPG Tanker's failure promptly to vacate the
berth, except for any cause over which Buyer has no control,
shall be paid by Buyer to Seller.
14.2 Miscellaneous Charges
Dues and other charges on the LPG loaded shall be paid by
Seller. Dues and other charges on the LPG Tanker, whether
or not such dues or charges are based on the quantity of LPG
loaded or the freight and regardless of who is initially
required to pay or withhold such dues and charges, shall be
paid or borne by Buyer. Any taxes on freight shall be borne
by Buyer.
14.3 Insurance and Conditions of Use
Buyer shall ensure that all LPG Tankers shall be entered
in a reputable P & I Club acceptable to Seller for all
risks, including, without limitation, those provided for in
the Conditions of Use. All costs related to entering LPG
Tankers with reputable P & I Clubs shall be at Buyer's
expense. Buyer shall ensure that the owner, operator or
charterer and master of each LPG Tanker shall accept the
Conditions of Use. The Conditions of Use shall be modified
by an Omnibus Agreement between Seller, Seller's Suppliers
and Buyer's Transporter (the "Omnibus Agreement") and a
Waiver Agreement between Seller, Seller's Suppliers, Buyer's
Transporter and Buyer (the "Waiver Agreement") in the same
form and substance as hitherto executed in connection with
the use of the Loading Port by other LNG and/or LPG vessels.
Prior to the first sale and delivery of LPG under this
Contract, Seller shall sign and cause Seller's Suppliers to
sign the Omnibus Agreement and Waiver Agreement, Buyer shall
sign and cause Buyer's Transporter to sign the Waiver
Agreement, and Buyer shall cause Buyer's Transporter to sign
the Omnibus Agreement.
ARTICLE 15
FORCE MAJEURE
15.1 Events of Force Majeure
(a) Neither Seller nor Buyer shall be liable for any
delay or failure in performance hereunder if and to the
extent such delay or failure in performance is directly
caused by any of the following causes or events (any such
cause or event is hereinafter referred to as an event of
"Force Majeure"):
(i) As to the Bontang Facilities and the Receiving
Facilities:
(A) fire, flood, atmospheric disturbance,
lightning, storm, typhoon, tornado, earthquake, landslide,
soil erosion, subsidence, washout or epidemics;
(B) war, riot, civil war, blockade,
insurrection, sabotage, acts of public enemies or civil
disturbances;
(C) strike, lockout or other industrial
disturbances;
(D) accidental damage to Natural Gas
reservoirs or Natural Gas production facilities in the Gas
Supply Area or to the facilities for transportation of
Natural Gas from the Gas Supply Area;
(E) accidental damage to any of the Bontang
LPG Facilities or the Bontang LNG Facilities;
(F) accidental damage to the Receiving
Facilities capable of receiving the LPG cargo(es) in
question;
(G) inability or reduced capacity of
facilities to produce or ship LNG or other hydrocarbons, in
either case, requiring a cessation, suspension, interruption
or curtailment in production or transmission of Natural Gas,
LPG or LNG;
(H) depletion, reduction or insufficiency of
reserves of, or a change in the characteristics of Natural
Gas from, or a change in the reservoir characteristics of,
the Gas Supply Area such that the contractual quantities of
LPG hereunder cannot be produced in a commercial manner; or
(I) act of government or governmental
authorities or any law, decree, order or the like, or taking
or confiscation whether or not acting under color of law,
that directly affects the ability of a party to perform any
obligation hereunder other than the obligation to remit
payments as provided in Article 10.4 hereof on account of
LPG delivered and taken or not taken and subject to payment
of Damages under this Contract.
(ii) As to Named LPG Tankers:
(A) loss of Named LPG Tanker or serious damage
thereto;
(B) closing of harbors, ports or other
facilities;
(C) accident of navigation or perils of the
sea;
(D) fire, flood, atmospheric disturbance,
lightning, storm, typhoon, tornado, or epidemics;
(E) war, riot, civil war, blockade,
insurrection, acts of public enemies, or civil disturbance;
(F) strike or other industrial disturbance
occurring aboard a Named LPG Tanker; or
(G) acts of government.
(iii) As to the Bontang Facilities, the
Receiving Facilities and Named LPG Tankers: any event or
cause whether or not of the same type or class as described
above and whether or not foreseeable, reasonably beyond the
control of the party affected which by the exercise of due
diligence that party is unable to overcome.
(b) Notwithstanding the provisions of paragraph (a)
above:
(i) Buyer shall in no event be relieved of its
obligations to pay Seller for LPG sold and delivered to it
hereunder or for payment of Damages pursuant to Article 5.2
for LPG not taken;
(ii) neither party shall be relieved from any other
obligations to make payments required hereunder to the other
party; and
(iii) neither party shall be relieved from its
obligation to make payments in immediately available U.S.
Dollars in the place or places otherwise provided for
herein.
(c) Settlement of strikes, lockouts or other industrial
disturbances shall be entirely within the discretion of the
party experiencing such situations, and nothing herein shall
require such party to settle industrial disputes by yielding
to demands made on it when it considers such action
inadvisable.
15.2 Notice, Resumption of Normal Performance
(a) Immediately upon the occurrence of an event of Force
Majeure that gives a party warning that the event may delay
or prevent the performance by Seller or Buyer of any of its
obligations hereunder, the party affected shall give notice
thereof to the other party describing such event and stating
the obligations the performance of which are, or are
expected to be, delayed or prevented, and (either in the
original or in supplemental notices) stating (i) the
estimated period during which performance may be suspended
or reduced, including, to the extent known or ascertainable,
the estimated extent of such reduction in performance, and
(ii) the particulars of the program to be implemented to
ensure full resumption of normal performance hereunder.
(b) In order to promote resumption of normal performance
of this Contract within the shortest practicable time, the
party affected by an event of Force Majeure shall take all
measures to that end which are reasonable in the
circumstances, taking into account the consequences
resulting from such event of Force Majeure, provided that
such party shall not be required to take measures which
would involve it in material additional expense or in a
material departure from its normal practices. Prior to
resumption of normal performance the parties shall continue
to perform their obligations under this Contract to the
extent not prevented by such event of Force Majeure.
15.3 Effect on Deliveries, Supplies, Term
(a) No curtailment or suspension of deliveries or
receipt of deliveries shall operate to extend the duration
of this Contract or to terminate this Contract (except as
specified in paragraph (c) below). Neither Buyer nor Seller
shall be obliged to make up shipments omitted due to Force
Majeure, whether affecting Seller or Buyer.
(b) Under no circumstances shall Seller be obliged to
purchase or otherwise obtain LPG lost or not produced as the
result of Force Majeure, or to replace or supplement the Gas
Supply Area as the source of supply of Natural Gas for LPG
or to replace or supplement the Bontang LPG Facilities for
production of LPG. Should Seller obtain or acquire
alternate LPG supplies, Seller shall not be obligated to
allocate any such supplies to Buyer.
(c) If either Buyer's or Seller's performance hereunder
is delayed or prevented by Force Majeure for more than one
hundred and eighty (180) consecutive days, the other party
shall have the right to terminate this Contract upon sixty
(60) days' prior notice after expiration of such period of
one hundred and eighty (180) days to the other party
provided that such event of Force Majeure is not remedied
within such period of notice.
ARTICLE 16
EARLY TERMINATION
If Buyer shall become insolvent or unable to pay its
debts as they mature, or commits or suffers any act of
bankruptcy (including filing or failing to have discharged
any petition in bankruptcy, reorganization, winding-up,
liquidation or similar proceeding, the appointment of a
receiver or trustee of Buyer or its assets, and assignment
for the benefit of its creditors or similar composition),
then Buyer shall be in material breach hereunder and (in
addition to such other remedies as it may have) Seller shall
have the right to terminate this Contract forthwith upon
notice to Buyer.
ARTICLE 17
ARBITRATION
Any dispute between Seller and Buyer in connection with
this Contract or the interpretation, performance or non-
performance hereof shall be finally settled by arbitration
pursuant to the Rules of Conciliation and Arbitration of the
International Chamber of Commerce ("ICC"), in effect at that
time, by three (3) arbitrators appointed in accordance with
said Rules. The place at which such arbitration proceedings
shall be held shall be Paris, France and the arbitrators
shall be bound to apply the laws of the State of New York in
determination of the dispute. The award rendered by the
arbitrators shall be final and binding upon the parties, and
may be entered and enforced in any court having
jurisdiction. The arbitration proceedings shall be
conducted in the English language.
ARTICLE 18
APPLICABLE LAW
This Contract shall be governed by and interpreted in
accordance with the laws of the State of New York, United
States of America.
ARTICLE 19
CONFIDENTIALITY
Information or documents furnished by a party to the
other party hereunder in connection with the performance of
this Contract, and which the disclosing party identifies as
confidential may not be used or communicated to third
parties without the agreement of Seller, in the case of
information and documents furnished to Buyer, and of Buyer,
in the case of information and documents furnished to
Seller. This restriction shall not apply to information or
documents which:
(a) have fallen into the public domain otherwise than
through the act or failure to act of the party that has
received them;
(b) are communicated to any Supplier or any Affiliate of
a party or a Supplier, with the obligation of the receiving
persons to maintain confidentiality;
(c) are communicated to legal counsel, accountants,
other professional consultants or advisers, underwriters or
lenders of a party of a Supplier, or other persons that are
participating in the implementation of sales of LPG from the
Bontang Facilities, with the obligation of the receiving
persons to maintain confidentiality;
(d) are communicated to contractors for or operators of
the Bontang Facilities, the Loading Port, any LPG Tanker, or
the Loading Terminal, provided that such communication is
necessary for the performance by a party of the obligations
under this Contract and provided further that said
contractors and operators shall be subject to an obligation
to maintain confidentiality; or
(e) are communicated to any governmental authorities of
Japan or the Republic of Indonesia, or the United States of
America, or the country of incorporation of any Supplier
claiming authority to require such disclosure, in accordance
with that authority.
The foregoing obligations of the parties shall survive
termination of this Contract.
ARTICLE 20
NOTICES
All notices and other communications for purposes of this
Contract shall be in English and in writing, which shall
include transmission by telex, cable, or other electronic
means such as facsimile transmission, except that notices
given from ships at sea may be by radio in English. Notices
and other communications given by telex, cable or other
electronic means shall be confirmed by air mail unless
otherwise agreed by the parties. Notices and communications
shall be directed as follows:
A. To Seller at the following:
PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA
(PERTAMINA)
(Mail address) P.O. BOX 12 / JKT
Jl. Medan Merdeka Timur 1 A
Jakarta Pusat, Indonesia
(Cable address) PERTAMINA
JAKARTA, INDONESIA VIA RCA
(Telex address) PERTAMINA
44302 or 44152
JAKARTA, INDONESIA
(Facsimile address) 62-21-355271
In each case marked for the attention of:
Head of Gas Marketing Department
B. To Buyer at the following:
JAPAN INDONESIA OIL CO., LTD.
(Mail address) 3-18 Kudan-Minami
2-Chome
Chiyoda-Ku
Tokyo 102
JAPAN
(Cable address) JIOKTOK
(Telex address) 232 4349 JIO J
(Facsimile address) 81-3-323
Either party may designate additional addresses for
particular communications as required from time to time, and
may change any address, by notice given thirty (30) days in
advance of such addition or change. Immediately upon
receiving communications by telex, cable, facsimile or
radio, a party shall acknowledge receipt by the same means
(or may acknowledge receipt of facsimile by telex or cable),
and may request a repeat transmittal of the entire
communication or confirmation of particular matters.
If the sender receives no acknowledgement of receipt
within twenty-four (24) hours, or receives a request for
repeat transmittal or confirmation, said party shall repeat
the transmittal or answer the particular request. Unless
otherwise expressly provided herein, all notices hereunder
shall become effective upon receipt, and for the purposes
hereof, "receipt" in the case of a telex shall refer to a
message sent for which an "answer-back" was received by the
sender. Prior to the first Shipment Month, the parties shall
establish radio channels, frequencies and procedures for all
communications between LPG Tankers, the Bontang Facilities
and the authorities for the Loading Port and Loading
Terminal.
ARTICLE 21
ASSIGNMENT
Neither this Contract nor any rights or obligations
hereunder may be assigned by Buyer without the prior written
consent of Seller, or by Seller without the prior written
consent of Buyer.
ARTICLE 22
AMENDMENTS
This Contract may not be amended, modified, varied or
supplemented except by an instrument in writing signed by
the President-Director or other duly authorized
representative of Seller and by a Director or other duly
authorized representative of Buyer.
Performance of any condition or obligation to be
performed hereunder shall not be deemed to have been waived
or postponed except by an instrument in writing signed by an
authorized signatory, as specified in the preceding
paragraph, of the party who is claimed to have granted such
waiver or postponements.
ARTICLE 23
ENTIRE AGREEMENT
This Contract constitutes the entire agreement between
the parties relating to the subject matter hereof and
supersedes and replaces any provisions on the same subject
contained in any other agreement or communications between
the parties prior to the execution of this Contract, whether
written or oral.
ARTICLE 24
LANGUAGE OF THE CONTRACT
This Contract has been made and executed only in the
English language.
ARTICLE 25
HEADINGS
The headings and captions in this Contract are inserted
solely for the sake of convenience and shall not affect the
interpretation or construction of this Contract.
ARTICLE 26
COUNTERPARTS
This Contract has been executed in two (2) identical
counterparts, each of which shall have the force and dignity
of an original, and both of which shall constitute but one
and the same Contract.
IN WITNESS WHEREOF, each of the parties has caused
this Contract to be executed in Jakarta by its duly
authorized representative as of the date first written
above.
SELLER: BUYER:
PERUSAHAAN PERTAMBANGAN MINYAK JAPAN INDONESIA OIL CO.,LTD.
DAN GAS BUMI NEGARA (PERTAMINA)
By : F. ABDA'OE By : HIDEO KAMIO
PRESIDENT DIRECTOR PRESIDENT DIRECTOR
ATTACHMENT 1
Measurement and Sampling Procedures
(A) Sampling
Sampling shall be in accordance with GPA Publication 2174
latest revisions and Appendix B of API Chapter 14.1. Should
other approved sampling methods be adopted by Seller, Buyer
will be notified.
(B) Measurement
(i) Seller shall, at its sole cost, risk and expense,
install or caused to be installed metering facilities of a
standard make for the purpose of metering each grade of LPG.
Said metering and sampling facilities shall meet Seller's
specifications and shall be approved by the Government of
Indonesia and shall be installed shoreside in a manner and
at a location approved by Seller and shall be operated and
maintained by Seller for Seller's account. Buyer, in the
presence of a member of Seller's staff, shall at reasonable
times have access to the said metering facilities for the
purpose of inspection, checking and reading.
(ii) Equipment and Procedures
1. Detail engineering of the metering system shall
be done by the contractor and is anticipated to be equipped
with the following devises:
Densitometer, de-aerator and strainer, turbine
meters, pressure and temperature indicator, automatic
sampler, electronic computer, ticket printer, system of
valves and meter prover, all of which shall be
approved/calibrated by MIGAS. All measurements shall be in
the metric system.
2. Loading lines shall be fully filled and cooled
by circulation prior to loading.
3. Meters shall be proved each time a shipment is
made and it shall be acceptable to prove meters either
before, during or after tanker loading. Testing of the
meters with the meter prover shall be conducted during
loading at loading rates that are normal for the LPG Tanker
being loaded. At least five runs shall be made with the
meter prover. At least three consecutive runs must achieve
0.05% repeatability. Data obtained shall be recorded on the
meter proving report which shall be signed by the operators
present during the proving procedure. If the meter factor
changes by more than 0.2% from the previous test the
metering system shall be thoroughly examined.
4. Correction factors shall be first approved by
the Customs & Excises Officer and the meter factor shall
become certified by the Customs & Excises Officer signing
the meter proving report. The Customs & Excises Officer
shall witness the entry of said meter factor into the
computer and shall seal the door of the meter panel in use
during loading.
5. Samples of each grade of LPG delivered shall be
taken with an automatic sampler. The samples obtained shall
be analyzed in accordance with test methods specified in
Exhibit A. The results of these analyses shall determine
the quality of LPG delivered. Samples shall be kept for 90
days.
6. The mass of each grade of LPG delivered shall
be read from the delivery ticket that has been produced by
the totalizer of the ticket printer.
7. The results shall be recorded on the Quantity
Certificate and Quality Certificate referred to in Article
9.1.
8. Should the meter prover be out of service, so
that meters can not be tested with the meter prover, the
meter factor of a meter during a delivery shall be
determined from an average of at least two previous meter
provings at comparable rates.
(iii) Accuracy
The accuracy of the measuring equipment shall be
verified by Direktorat Jenderal Minyak dan Gas Bumi
("MIGAS") of Indonesia at Seller's cost at intervals
specified by Government regulations. Upon demand of Buyer
any meter shall be tested for accuracy of measurement and if
found to be correct, or if found to be in error of not more
than 1/2 of one percent (1/2%) with respect to liquid
measurement, the expense of such testing shall be borne by
Buyer, but the expense shall be borne by Seller if found
incorrect by more than 1/2 of one percent (1/2%) with
respect to liquid measurement. In any event meters shall be
adjusted properly at once to record accurately.
In the event measuring equipment is out of service
or out of repair, so that the volume being measured is not
correctly indicated during any period by the reading
thereof, the quantities attributable to such period shall be
estimated and agreed upon the basis of the best data
available, using the first of the following methods which is
feasible:
(a) By using the registration of any check
measuring equipment, if installed and accurately
registering, or failing;
(b) By correcting the error if the percentage of
error is ascertained by calibrations, test, or mathematical
calculations, or failing;
(c) By shoreside tank gauging or failing;
(d) By ship tank gauging, or failing;
(e) By estimating on the basis of actual quantities
measured during the preceding periods under similar
conditions when the meter was registering accurately.
Operators shall preserve and make available for
inspection by Buyer all original test data, charts, and
other similar records for a period of at least twenty six
(26) months after the Year to which the data relates.
(iv) Basis or Method of Measurement
Notwithstanding any provisions of this Contract to
the contrary, if in order to comply with or by reason of any
present or future law, rule, regulation or order of any
governmental authority having jurisdiction therein, now or
hereafter, in effect during the term of this Contract, the
basis or method of measurement hereunder is changed, or in
the event Seller elects to measure by an alternate method of
measurement which has been approved by the appropriate
agency of the Government of Indonesia, then measurement
procedures shall be adjusted to compensate for the change in
the basis or method of measurement, such that the same
selling price for the same quantity shall remain in effect,
except as such selling price may be varied in accordance
with the provisions of this Contract.
(C) Seller shall inspect LPG on a regular basis as it is
produced and, in case the inspection results do not comply
with the specifications set forth in Exhibit A pursuant to
Article 7, Seller shall promptly advise Buyer of such
results.
ATTACHMENT 2
Testing Method of LPG Residual Matter (Mass Analysis Method)
1. Scope
This Standard provides for the testing method of LPG
residual matter.
2. Summary of Method
After approximately 1 kg of liquid sample is evaporated
in an atmosphere by using the prescribed testing apparatus,
it is evaporated for 20 minutes in constant temperature
water bath at 750C, and then the residual matter is weighed.
It is evaporated for 30 minutes in oven at 1050C, and then
the residual matter is weighed, so as to obtain the residual
matter at respective temperature.
3. Residual Matter Testing Equipment
The equipment consists of apparatus (1) through (6)
described below, and its assembly drawing is shown in Figure
1.
Figure 1: Assembly Drawing of Residual Matter
Testing Equipment
(1) Sample Cylinder
This is of a construction shown in Figure 2. It is
a cylinder made of stainless steel, steel or aluminum alloy,
withstanding a pressure of more than 31 kgf/cm2 {3.04 MPa},
equipped with two or one nozzle opening (s) and capable of
connecting a sample introduction pipe thereto. The cylinder
valve should be equipped with a gas filling nozzle of a
construction set forth in JIS BS245 (Valve for LPG
Cylinder).
Figure 2: Sample Cylinder [One Example]
(2) Connecting Pipe
This is a pipe of approximately 5 mm in diameter,
made of stainless steel or aluminum alloy, withstanding a
pressure of more than 80 kgf/cm2. It is provided with a
connector to the sample cylinder on one end and with a
connector to the cooler on the other end.
(3) Cooling Bath
This is of a type set forth in Figure 3.
Figure 3: Cooling Bath
(4) Filter
Wire netting of stainless steel; 400 mesh
(5) Evaporation Cylinder and Upper Evaporation Pipe
These are of glass with Class 1 hardness, and are of
dimensions and a form shown in Figure 4
Figure 4: Evaporation Cylinder and Upper Evaporation
Pipe
(6) Graduated Test Tube (with Plug)
This is of glass with Class 1 harness, and is of a
construction shown in Figure 5
Figure 5: Graduated Test Tube and Plug
4. Constant-Temperature Water Bath and Others
(1) Constant-Temperature Water Bath
This shall be capable of immersing the graduated
cylinder down to the graduation line of 100 ml, and also
capable of holding the bath temperature at 37.8 + 0.50 C,
and also capable of holding it at 75+ 10 C.
(2) Platform Scale
It shall have graduations of 0.01 kg or less
(3) Oven
It shall be capable of holding the temperature at
105+ 20 C, and shall not be provided with an ignition
source.
5. Preparation for Testing
(1) Glass apparatus, etc. to be used in the testing
shall be washed with cleaning solvents, such as acetone,
etc., and water and foreign matters are removed therefrom.
(2) A piece of zeolite (one piece of ceramics, etc.
of approximately 2 mm in diameter) is put into the graduated
test tube and the tube is plugged. Then the tube is held in
the oven at 105 0 C for 30 min., and cooled in the decicator
for another 30 min., the mass is measured to the digit of
0.1 mg. often opening the plug once and closing it again.
(3) The evaporation cylinder and the graduated test
tube are assembled in a manner as shown in Figure 1, and all
of the ground glass joints are clamped with springs.
6. Collection of Sample
(1) Dry ice and isopropanol are put into the cooling
bath, so as to spiral tube.
(2) Sample cylinder, connecting pipe, cooler and
filters are connected as shown in Figure 1 (1).
Then, the valves are opened in the order of the sample
cylinder valve, sample valve and needle valve, and the
connecting pipe, spiral tube and filter are co-washed with the
liquid sample.
Note (1): In making connections, all places which will
contact with the sample shall be of stainless steel or
aluminum alloy. When connections are made with rubber pipe,
the connecting portions shall not be annointed with grease or
lubricating oil.
(3) Sample cylinder valve is closed, and then the
connecting pipe is removed from the sample cylinder. The mass
of sample cylinder is weighed to the digit of 0.01 kg.
(4) After the connecting pipe is attached to the
sample cylinder, the sample cylinder valve is opened, and the
sample is let into the evaporation cylinder in liquid state.
At this time, the sample is supplied little by little until
the evaporation cylinder cools down. Needle valve should be
used in adjusting the flow of the sample.
(5) When approximately 2 liters of liquid sample is
let into the evaporation cylinder, the sample cylinder valve
is closed, and the sample cylinder is left as it is for
approximately one minute.
(6) Then the connecting pipe is disconnected from the
sample cylinder, and the mass of sample cylinder is weighed to
the digit of 0.01 kg. Then, the collected quantity of sample
is calculated from the difference between this weight and the
weight measured in item (3) above.
7. Preliminary Evaporation of Sample
(1) Upper evaporation pipe is attached to the
evaporation cylinder and is fastened with springs.
(2) While cautioning that sudden boiling will not
occur (2), the evaporation cylinder is exposed to atmosphere
thus the sample will be evaporated until it is reduced to
approximately 5 ml.
Note (2): Evaporation shall be carried out so that
bubbles will come out uniformly from the bottom of the
graduated test tube. If bubbles are not generated uniformly,
it is recommended that the upper evaporation pipe is removed
and the tip of copper wire (approximately 2 mm in diameter and
500 - 550 mm in length) is polished with rough-faced file and
inserted from the top of the evaporation cylinder. When
evaporation speed is low, the graduated test tube shall be
immersed in water bath of below 20 o C.
Remarks: When the evaporation work is conducted
outdoors, a place with good ventilation but without direct
sunlight should be selected. Adequate consideration shall
also be made for fire, explosion and offensive odor. When the
work is conducted indoors, measures shall be taken to disposal
Safety the evaporated gas from the upper evaporation pipe.
(3) After the test tube is immersed in the constant-
temperature water bath at 37.8oC up to its shoulder for 20
minutes, the graduated test tube is taken out of the constant-
temperature water bath.
(8) Measurement of Residual Matter at 75o C
(1) The graduated test tube is removed from the
evaporation cylinder (3), and the graduated test tube is
immersed into the constant temperature water bath at 75o C
down to the 100 ml graduation line. After being held there
for accurately 20 minutes, air is blown into the same test
tube for accurately 10 seconds at a rate of 3 l./minute (4),
and the gas in the test tube is replaced by air.
Note (3): Before removing the test tube, the water drops
between the graduated test tube and the connecting portion of
the evaporation cylinder shall be wiped off.
Note (4): Method of blowing the air into the test tube
shall be in accordance with Figure 6.
Figure 6: Method of Blowing Air into Test Tube
(2) The graduated test tube is taken out the
constant temperature water bath, and it is immediately
plugged. Water adhered to the graduated test tube should be
wiped off.
After being left cooling in the desicator for
30 minutes, opening plug once and closing it again in order to
prevent vacuum situation, the graduated test tube is weighed
to the digit of 0.1 mg.
9. Measurement of Residual Matter at 105o C
(1) Upon completing the operation in Section 8, the
plug on the graduated test tube is removed, and the graduated
test tube is horizontally placed in the oven at 105o C for 30
minutes, and then air is blown into the graduated test tube
for accurately 10 seconds at a rate of 3 l./minute (3), and
the gas in the test tube is replaced by air.
(2) The graduated test tube is taken out of the
oven. After being left cooling in the desicator for 30
minutes, the mass of the graduated test tube, together with
the plug, is weighed to the digit of 0.1 mg.
10. Calculation and Results
The residual matter is calculated in accordance with the
following equation, and the result is rounded to an
integer. Each of the results will carry an additional
remark of evaporation temperature.
S = (A - B) X 10 3
M
where: S: Residual Matter (mass in ppm)
A: Mass (g) of the graduated test tube (with
plug) after evaporation at 75o C or 105o C
B: Mass (g) of the graduated test tube (with
plug)
M: Collected amount of the sample (kg)
Remarks: When foreign matters, such as rust, etc.
are found at the inspection of the filter, such effects
should be recorded.
ATTACHMENT 3
Precision for Residual Matter
1. Repeatability
Duplicate results by the same operator should be
considered suspect if they differ by more than the amounts
shown in Figure 1 and 2 for repeatability.
2. Reproducibility
The results of two laboratories should be considered
suspect if the two results differ by more than the amounts
shown in Figure 1 and 2 for reproducibility.