LIQUEFIED PETROLEUM GAS (LPG)
PURCHASE CONTRACT
SAN JUAN PLANT
AS FIRST PARTY:
The Puerto Rico Electric Power Authority, hereinafter
referred to as “PREPA, a public corporation and government instrumentality of the
Commonwealth of Puerto Rico, created by Act of May 2, 1941, No. 83, as amended,
employer’s Social Security 66-0433747, represented in this act by its Executive
Director, Josué Antonio Colón Ortiz, of legal age, married, engineer and resident of
Caguas, Puerto Rico.
AS SECOND PARTY: [Company Name] hereinafter referred to as “Seller”, a
corporation organized and existing under the laws of _[State]_______, employer’s
Social Security __________, represented in this act by [Representative Name], its
[Position], of legal age, [Marital Status] and resident of [City, State], duly authorized
to sign this Contract on behalf of [Company Name] by virtue of a Certificate of
Resolution, dated as of__[Date]___.
The Seller and the PREPA shall each be a “Party” and, together, the “Parties”.
WITNESSETH
WHEREAS, [Company Name] is authorized and qualified as a Liquefied
Petroleum Gas (“LPG”) seller; and
WHEREAS, PREPA’s Combined Cycle Units 5 and 6 in the San Juan Power
Plant will be modified to enable the use of LPG as its primary fuel; and
WHEREAS, PREPA requested and Seller provided a proposal (Exhibit E) for the
supply of LPG on a continuous and reliable basis at PREPA’s San Juan Combined
Cycle Units 5 and 6, including the permitting, engineering, procurement, construction
and operation of the infrastructure required; and
Liquefied Petroleum Gas Purchase Contract
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NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the Parties agree as follows:
ARTICLE 1: Definitions
A. “Applicable Law” means, in relation to any legal Person, property, transaction or
event, all applicable provisions and latest version of laws, treaties, conventions,
statutes, rules, regulations, permits, official directives and orders of, and the terms of
all judgments, orders, awards, and decrees issued by, any Competent Authority by
which such legal Person is bound or having application to the property, transaction
or event in question.
B. “Business Day” means a Day, other than a Saturday, Sunday or a public holiday in
Puerto Rico
C. “Btu” means a British thermal unit, being that amount of heat that is equal to
1,055.056 Joules.
D. “Competent Authority” means any local, federal, state, regional, provincial,
municipal, national or supra-national governmental agency, authority, department,
inspectorate, minister, official, court, tribunal or public or statutory Person (whether
autonomous or not) which has jurisdiction in relation to the performance of this
Contract by either Party including, for the avoidance of doubt, any licensing authority
and any port authority, in each case acting within its legal authority, but excluding,
for the avoidance of doubt, any Party.
E. “Contract” - means this Contract and its Exhibits, as may be amended, modified,
varied or supplemented from time to time.
F. “Contract Price” shall have the meaning given to it in Article 9.
G. “Construction Period” shall have the meaning given to it in Article 3.
H. “Day” means a period of twenty four (24) consecutive hours beginning at 00:00 hours
local time in Puerto Rico.
I. “Delivery Point” means the point of interconnection between Sellers Facility and the
San Juan Steam Plant facilities downstream the vaporizers, located before gas filter
skid close to each combustion turbine, as per Exhibit B.
J. “Dispute Resolution” shall have the meaning given to it in Article 28.
Liquefied Petroleum Gas Purchase Contract
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K. “First Date of Commercial Delivery” shall be the first day in which both units 5 and 6
of the San Juan Plant are capable of burning LPG and shall commence at the end of
the Transitional Period.
L. “Force Majeure” shall have the meaning given to it in Article 13.
M. “Governmental Authority” means the government of the United States of America,
any state thereof, the Commonwealth of Puerto Rico, or any local jurisdiction, or any
political subdivision of any of the foregoing including, but not limited to courts,
administrative bodies, departments, commissions, boards, bureaus, agencies,
municipalities or other instrumentalities.
N. “LPG” means Liquefied Petroleum Gas or Propane Gas in a liquid state at or below its
boiling point.
O. “Mitsubishi Power System” or “MPS” means the San Juan units 5 and 6
combustion turbine manufacturer.
P. “MMBtu” means 1,000,000 Btu.
Q. “Off-Spec LPG” means any Liquefied Petroleum Gas that does not conform to the
LPG Specifications set forth in Exhibit C.
R. “Party” and “Parties” shall have the meaning given to them in the preamble to this
Contract.
S. “PREPA” shall have the meaning given to it in the preamble to this Contract.
T. “Quarterly Quantity” or “QQ” shall have the meaning given to it in Article 6.
U. “Reasonable and Prudent Operator” means a Person seeking in good faith to
perform its contractual obligations and comply with Applicable Law, and in so doing,
and in the general conduct of its undertaking, exercising that degree of skill,
diligence, prudence and foresight which would reasonably and ordinarily be
expected from a skilled and experienced international operator engaged in the same
type of undertaking under the same or similar circumstances and conditions.
V. “Scheduled Maintenance” shall mean the maintenance period scheduled to be
performed in San Juan Plant units 5 and 6 to occur as per Article 6.
W. “Seller” shall have the meaning given to it in the preamble to this Contract.
X. “Termination Event” shall have the meaning given to it in Articles 18, 19 and 20.
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Y. “Transitional Period” shall be the period starting when at least one unit in San Juan
Combined Cycle is capable of operating with LPG as its primary fuel and ending
when both units are capable of operate with LPG as its primary fuel.
ARTICLE 2: Scope and Term of Contract
A. Seller is responsible for the completion of all activities associated and required that
will enable Seller to sell and deliver liquefied petroleum gas (“LPG”) to PREPA,
including the permitting, engineering, procurement, construction and operation of the
infrastructure required. Seller shall complete the infrastructure required in PREPA’s
and it premises and the transmission pipeline from its facilities up to the units 5 and
6 in San Juan Plant. A detailed scope of work for Seller is included in Exhibit A. It is
understood between the Parties that if any of the mentioned activities proves to
render the intended project as not viable, this contract shall terminate immediately
without penalty to either Party.
B. Seller agrees to sell and deliver to PREPA and PREPA agrees to purchase and
receive from Seller at its San Juan Combined Cycle Plant 15,000 barrels of LPG per
day on a yearly quarterly average basis with the exception of Scheduled
Maintenance and Force Majeure conditions as establish on Article 6 and Article 13,
respectively. Said consumption at MPS’ temperature, pressure and minimum flow
requirements.
C. This Contract shall become effective on the date of its signature, and will be in effect
for a period of four (4) years after the First Date of Commercial Delivery. This
Contract is subject to additional extensions of one (1) year each to a maximum of
three (3) if agreed by the Parties. PREPA shall indicate its intention by providing the
Seller a written notice for the extension one hundred twenty (120) days before the
expiration of the original Contract term or any extension thereof, as applicable.
Seller shall confirm its acceptance for the extension with a written notice ninety (90)
days before the expiration of the original Contract term or any extension thereof, as
applicable.
An amendment of the Contract shall be signed by Parties with the
agreed additional year extension.
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ARTICLE 3: Construction Period and Penalty’s for Delays
A. A
schedule
for
the
design,
procurement,
installation,
construction
and
commissioning processes (Construction Period), required before the Transitional
Period, shall be included as Exhibit D. Construction Period shall take into
consideration PREPA’s interest in commencing the Transitional Period within 90
days.
B. If the Seller fails to comply with the supply of LPG for the Transitional Period as
established above, a penalty of $450,000 for each calendar day of delay shall apply.
Penalty shall be applied until completing the work up to a maximum of $13,500,000.
The Seller and his sureties shall be joint and several liable for such amount.
C. In the event that the Seller had to pay the total amount of the penalty as above
mentioned due to this delay, said circumstances could be considered a breach of
contract and PREPA may terminate the Contract, execute the Performance Bond
and pursue any other remedies under this Contract, law or equity. PREPA shall
have the right to the payment or to the withholding of Seller's payments in case of
Seller's delay in completion of the work. The Seller agrees that the penalty shall not
be subject to reduction, moderation or modification, since this penalty is a pecuniary
punishment for the delay, and not a liquidation of damages.
ARTICLE 4: Specifications
A. Seller guarantees that the LPG to be supplied under this Contract shall comply with
the
classification
HD5,
temperature,
pressure
and
flow
as
per
MPS
recommendations and shall be in accordance with the latest edition of the applicable
ASTM Method, all as detailed in Exhibit C- LPG Specifications.
In determining compliance with the LPG Specifications, Seller is required to make a
laboratory analysis, as per the specified methods of the LPG actually being supplied
to assure that the LPG meets all the specifications of this Contract. The samples for
such analysis shall be taken at the unloading point (San Juan Port) of the tanker
ships (LPG Vessels). The analysis shall be made and certified by an internationally
recognized laboratory that is mutually agreeable to PREPA and Seller. The cost of
such analysis shall be shared equally between PREPA and Seller. Copies of the
Liquefied Petroleum Gas Purchase Contract
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certified analysis shall be sent to PREPA’s Fuels Office at the time of arrival each
new shipment of LPG. If PREPA encounters difficulties in the efficient handling and
burning of the LPG, special analysis shall be requested by PREPA to determine
whether such difficulties are attributable to a possible noncompliance of the
delivered LPG with the specifications. Cost of the special analysis will be paid by
the non-prevailing Party. If Off-Spec LPG is determined by special analysis, Seller
will take such immediate measures as are necessary to prevent further difficulties
and PREPA shall not be obliged to take nor pay for such Off-Spec LPG.
PREPA’s acceptance of Off-Spec LPG, or agreement to remedial or preventive
measures, shall not be interpreted or considered as a waiver of any rights available
to it under the law, including, but not limited to, rights to actions or claims for
damages caused by Seller’s noncompliance with the LPG Specifications established
in Exhibit C, or with any other provision of this Contract.
B. The LPG to be supplied shall be appropriate for burning successfully without causing
extraordinary maintenance to the combustion turbines and associated equipment, or
other extraordinary problems in the operation of the station, and shall conform to
Applicable Law.
C. In the event that during the term of the Contract, any Applicable Law is enacted
requiring any change in the specifications of LPG described in Exhibit C, whether
these changes may require an adjustment in the price of the LPG contracted for,
then the Parties, at Seller´s request, shall meet within five (5) days from the
enactment of any such Applicable Law to discuss the matter for the purpose of
establishing amended specifications and reasonable price changes, if applicable, for
the LPG, in a manner that is satisfactory to both Parties. If an agreement cannot be
reached prior to the enforcement date, because the Seller change in price is not
competitive, or if Seller for any other reason cannot provide the LPG according to
the amended specifications, then PREPA shall have the right to terminate this
Contract, but in such case PREPA shall compensate Seller for the remaining portion
of the costs incurred by Seller for the construction of the infrastructure necessary for
its performance under this Contract.
Liquefied Petroleum Gas Purchase Contract
Page 7
D. The Seller will be held responsible for any fines, penalties, damages, expenses,
costs or claims, actions, and causes of actions, which may arise due to the fact that
any of the LPG provided by Seller has deviations or variations from the LPG
Specifications established in Exhibit C. Therefore, if such circumstance takes place,
the Seller will hold and save harmless and will defend PREPA, its officers, agents,
and employees, from any claims, actions, causes of actions, damages, costs, fines
penalties and expenses due to the above.
E. If during any delivery the Seller fails to meet the LPG specifications established in
Exhibit C, PREPA reserves the right to reject the shipment, evaluate the deviation
and deduct a monetary equivalent from the amounts due to Seller, establish a claim
for nonperformance, or, subject to the provisions of Article 17, terminate the
contractual relationship with Seller for non-performance.
ARTICLE 5: Delivery and Title
A. Title to the LPG and risk of loss shall pass to PREPA when the LPG passes the LPG
Meters to be located in PREPA’s facilities. LPG will be transferred through pipelines
from Seller’ facilities into PREPA’s facilities (the Delivery Point). Such pipeline will
have meters (such meters hereinafter, the “LPG Meters”) installed at the Delivery
Point. PREPA request the use of steam vaporizers to be located within the Facility.
The steam for the operation of the vaporizers shall be provided by PREPA.
Notwithstanding the above, Seller shall be responsible for the operation and
maintenance of the vaporizers and compliance with the LPG fuel Specifications; and
accordingly will take care and custody of the LPG from the LPG Meters to the gas
skids.
B. In order to fulfill PREPA’s operational requirements, deliveries shall be made
continuously on a twenty-four (24 hours) and seven (7) days a week basis. Any
need to interrupt the delivery of LPG by reasons attributable to Seller, shall be
coordinated with PREPA reasonably in advance with the exception of Force Majeure
events.
C. If Seller, for any reason other than Force Majeure, (as defined in Article 13) fails to
deliver the LPG required as provided for in this Contract, said event shall be
Liquefied Petroleum Gas Purchase Contract
Page 8
considered an event of non-compliance and PREPA may procure an alternate fuel
from any other supplier.
In such event, Seller shall reimburse PREPA for any
difference in the price per MMBTU of such alternate fuel which PREPA may have
paid in excess of the contracted price herein. It shall be understood that PREPA is
not waiving any rights available to it under the law, including rights to any claims or
actions for damages caused by Seller’s noncompliance with the terms of this
Contract.
ARTICLE 6: Quarterly Quantity and Delivery Program
A. The Quarterly Quantity will be the amount of LPG expected to be consumed by
PREPA on a specific quarter based on an average of 15,000 bbls daily minus the
days of Schedule Maintenance, plus the make-up quantities from previous quarters.
Quarterly Quantities shall be provided by PREPA with the expected Schedule
Maintenance dates within the specific quarter at least fifteen days before the
commencement of the quarter.
B. PREPA will provide Seller the Quarterly Quantity according to the following
schedule:
1) Q1- January, February and March: will be provided before the previous
December 1st.
2) Q2- April, May and June: will be provided before the previous March 1st.
3) Q3- July, August and September: will be provided before the previous June
1st.
4) Q4- October, November and December: will be provided before the previous
September 1st.
C. PREPA will provide to the Seller its LPG requirements for the next month before the
fifteen (15th) Day of the previous month (M-1).
D. On or before 00:00 hours Puerto Rico Time of each Wednesday of each week, or, if
such Day is not a Business Day, on the Business Day immediately preceding such
Day, PREPA shall provide to the Seller a daily estimate of its LPG requirements for
the coming week, to be provided on a daily basis (Weekly Programme). For the
purpose of this Clause each Weekly Programme shall contain consumption details
beginning 00:00 hours Sunday until 23:59 hours the following Saturday.
Liquefied Petroleum Gas Purchase Contract
Page 9
ARTICLE 7: INTENTIONALLY LEFT BLANK .
ARTICLE 8: Measurements and Payment
A. LPG consumption shall be metered through the LPG Meters which will be adjusted
for readings at 60°F. Details regarding equipment selection, accuracy, calibration
recertification, maintenance and custody of metering station will be addressed during
the negotiation.
B. The LPG Meters will permit their continuous remote reading by PREPA at PREPA’s
San Juan Plant.
C. Seller will invoice PREPA on a monthly basis for LPG consumed and metered as of
12:00 pm each month and invoices shall be paid by PREPA without deductions,
offsets or counterclaims of any kind, in U.S. currency, not later than thirty (30)
calendar days after the receipt of the invoices at PREPA’s Fuel Office. Payments
shall either be sent by wire transfer to Seller’s account at Seller’s bank account
no._______________ or be available for pick-up by Seller at PREPA’s Treasury
Division.
D. All invoices submitted by Seller shall include the following Certification in order to
proceed with its payment.
This is an essential requirement and those invoices
without this Certification, will not be processed for payment.
No Interest Certification:
Under the penalty of absolute nullity, I hereby certify that no employee, official or
director of PREPA is a Party or has any interest in the profits or benefits to be
obtained under this Contract or if any employee, official or director of PREPA has
any interest in the profits or benefits under this Contract or a waiver has been
previously obtained. I, also certify that the only consideration to provide the LPG
under this Contract is the payment agreed with PREPA’s authorized
representative.
The total amount of this invoice is fair and correct. The LPG was delivered and
no payment has been received for said concept.
Liquefied Petroleum Gas Purchase Contract
Page 10
_______________________
Seller’s Signature
E. All invoices and requests for payments shall be hand-delivered and delivered via fax
or email to the following addresses:
Puerto Rico Electric Power Authority
Attention: Fuels Office Manager
P.O. Box 364267
San Juan, Puerto Rico 00936-4267
Physical address:
Juan Ruiz Velez Building
Fuels Office, Suite 301
1102 Ponce de Leon Avenue
Santurce P.R.
Tel: (787) 521-4005
Fax: (787) 521-3464
Email:
ARTICLE 9: Price
A. Contracted price for LPG delivered shall be per gallon, volume corrected to a
temperature of 60°F.
B. Price will be determined in dollars per MMBtu per shipment, rounded to four (4)
decimal places as follows:
Price = ( I x A% + T+ F)/ 0.915
Where;
I = Index, average for Propane price on a 5-published day average basis upon
the LPG Vessels’ Notice of Readiness for discharge (NOR) according to Mont
Belvieu column on Platt’s Oilgram Price Report – Gas Liquids section. Platt’s
Oilgram Price Report reference postings for Saturday, Sunday, or holidays,
shall be the last published price before the invoice date (in gallons).
A = Percentage applicable to index: _____ %.
T = a differential of $______ per gallon to account for transportation.
F = a differential of $_______ per gallon to account for infrastructure finance.
C. In addition to the contracted price, PREPA shall reimburse to Seller the cost
associated with the payment of any
municipal license taxes (“Patentes
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Municipales”), all Puerto Rico excise taxes assessed on the LPG (if any) and all
municipal construction taxes that may be assessed on the Seller by reason of the
construction or installation of the pipelines and other facilities necessary for the
servicing of this Contract. All these items will be presented as separate line items in
Seller’s invoices to PREPA.
D. The contracted price shall be capped to a value on a dollars per million BTU basis
($/MMBtu) equivalent to ________ percent of the price for No. 2 Fuel Oil contracted
by PREPA. This price is calculated using the Ultra-Low Sulfur Diesel (ULSD) as
published
Platt’s
Oilgram
Price
Report
using
the
following
formula:
Fifty percent (50%) of ULSD fuel from the average of quotations for the “New
York/Boston” (Cargo) as published by the Platt’s Oilgram Price Report; rounded to
four (4) decimal places. Plus fifty (50%) of ULSD from the average of quotations for
the “US Gulf Coast (Waterborne)” as published by the Platt’s Oilgram Price Report;
rounded to four (4) decimal places plus 27.38 cents per gallon.
Conversion factors for propane and ULSD shall be as follows:
1 gallon of propane = 91,500 Btu
1 gallon of ULSD = 132,000 Btu
ARTICLE 10: Duties and Taxes
PREPA will be responsible for all new taxes, fees, or established import tariffs for
foreign material that may be assessed on the LPG to be supplied hereunder. In the
event that new or increased taxes, fees or tariffs applicable to the product being
supplied hereunder are levied by the Federal Government and/or the Commonwealth of
Puerto Rico Government, and so long as these taxes, fees, or tariffs do not discriminate
as to whether the product is domestic or foreign, these will be passed in their entirety to
PREPA.
Any changes up or down in these taxes, fees, or tariffs, should they be
imposed, will be reflected in the price in its entirety and Seller will adjust the price
accordingly. However, should said new or increased taxes, fees or tariffs discriminate
depending on whether the product is domestic or foreign and said new or increased
taxes, fees or tariffs result in a lower price for any LPG, Seller must supply LPG which
results in the lowest cost to PREPA. Should said LPG be unavailable, the Parties shall
Liquefied Petroleum Gas Purchase Contract
Page 12
meet within five (5) days from Seller’s notification to PREPA that the lowest priced LPG
is unavailable, or at PREPA’s request, to discuss LPG availability from other sources
and negotiate the financial aspect of any such taxes, fees or tariffs applicable to that
product. If an agreement cannot be reached, PREPA shall have the right to terminate
the Contract after following the procedures set forth in Article 28. In the event of such
termination, PREPA shall compensate Seller for the remaining portion of the costs
incurred by Seller for the construction of the infrastructure necessary for its performance
under this Contract.
ARTICLE 11: Performance Bond by Seller
Upon execution of this Contract, Seller shall deliver a performance bond payable to the
order of PREPA, issued by a qualified surety company authorized to do business in
Puerto Rico and acceptable to PREPA, in the amount equivalent to five percent (5%) of
the estimated annual value of this Contract.
PREPA will accept a letter of credit for the same amount in lieu of a performance bond,
provided that the letter of credit shall incorporate the following conditions to be
acceptable to PREPA:
A. be issued or notified and confirmed by a local bank in Puerto Rico,
B. be unconditional and irrevocable,
C. payments to be made by issuing bank on a business day, notice by wire transfer,
immediately after PREPA’s instructions,
D. to be governed by and construed in accordance with the laws of the Commonwealth
of Puerto Rico, applicable to contracts being made and performed solely within
Puerto Rico, without giving effect to any conflicts or choice of law principles which
otherwise might be applicable, except to the extent such laws are inconsistent with
the uniform customs and practices for documentary credits,
E. final draft of the letter of credit shall be subject to approval by PREPA’s Treasurer.
ARTICLE 12: Insurances
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A. The Seller shall secure and maintain in full force and effect during the construction
period of this Contract as provided herein, policies of insurance covering all
operations engaged in by the Contract as follows:
1) Workmen’s Compensation Insurance
a.
The Seller shall provide Workmen’s Compensation Insurance as
required by the Workmen’s Compensation Act of the Commonwealth
of Puerto Rico. The Seller shall also be responsible for compliance
with said Workmen’s Compensation Act by all its subcontractors,
agents, and invitees, if any.
b.
The Seller shall furnish the Authority a certificate from the State
Insurance Fund showing that all personnel employed in the work are
covered by the Workmen’s Compensation Insurance, in accordance
with this contract.
c.
If imported technical personnel are exempted, as per Act of May 16,
1958, No. 16, the Seller shall furnish evidence of such exemption and
certificate from the insurance carrier covering said personnel.
2) Employer’s Liability Insurance
The Seller shall provide Employer’s Liability Insurance with minimum bodily
injury limits of $1,000,000 for each employee and $1,000,000 for each
accident covering against the liability imposed by Law upon the Seller as
result of bodily injury, by accident or disease, including death arising out of
and in the course of employment, outside of and in the course of employment,
and outside of and distinct from any claim under the Workmen’s
Compensation Act of the Commonwealth of Puerto Rico.
3) Commercial General Liability Insurance
The Seller shall provide a Commercial General Liability Insurance with limits
of $5,000,000 per occurrence and $5,000,000 aggregate. Including XCU
hazards coverage.
4) Automobile Liability Insurance
Liquefied Petroleum Gas Purchase Contract
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The Seller shall provide a Comprehensive Automobile Liability Insurance with
limits of $2,000,000 combined single limit covering all owned, non-owned and
hired automobiles.
5) Professional Liability Insurance
The Seller shall maintain Professional Liability Insurance with limits of
$2,000,000 per occurrence and $2,000,000 aggregate
6) Builders Risk Insurance
Seller shall provide and maintain in force Builders Risk Insurance for the
entire work. Such insurance shall be written in an amount equal to the total
construction part of the contract sum, as well as subsequent modifications of
that amount.
7) Pollution Liability Insurance
The Seller shall maintain Pollution Liability Insurance with limits of $2,000,000
per occurrence and $2,000,000 aggregate
8) Bonds : The Seller shall furnish at the execution of this contract:
a.
A Payment Bond in the amount of one hundred percent (100 %) of the
contract price for the construction part of it, with good and sufficient
surety satisfactory to the Authority, to guarantee the prompt payment
of all labor, supervision, equipment and materials required in the
performance of the work.
b.
A Performance Bond in the amount of one hundred percent (100%) of
the contract price, for the construction part of it, with good and
sufficient surety satisfactory to the Authority, guaranteeing that the
Seller will well and faithfully perform the work within the time specified.
All bonds shall be presented before the commencement of any work and shall
be executed in the official form of the Authority.
9) Requirements under the Policies
The Commercial General Liability and Commercial Automobile Liability
Insurance required under this service contract shall be endorsed to include:
a.
As additional insured:
Puerto Rico Electric Power Authority
Liquefied Petroleum Gas Purchase Contract
Page 15
Risk Management Office
PO Box 364267
San Juan, PR 00936-4267
b.
A 30 day cancellation or nonrenewable notice to be sent to the above
address.
c.
An endorsement including this contract under contractual liability
coverage and identifying it by number, date and parties to the contract.
d.
Waiver of Subrogation in favor of PREPA.
e.
Breach of Warranties or Conditions: The Breach of any of the
Warranties or Conditions in this policy by the Seller shall not prejudice
PREPA’S rights under this policy.
10) Furnishing of Policies
a.
All required policies of insurance shall be in a form acceptable to the
“Authority” and shall be issued only by insurance companies
authorized to do business in Puerto Rico.
b.
The Seller shall furnish a certificate of insurance in original signed by an
authorized representative of the insurer in Puerto Rico, describing the
coverage afforded. This certification shall be in the “Acord” form, in
general use by the insurers. Also, original of the endorsements shall be
furnished.
B. The Seller shall secure and maintain in full force and effect during the supply of LPG
according to Contract as provided herein, policies of insurance covering all
operations engaged in by the Contract as follows:
1) Workmen’s Compensation Insurance
a. The Seller shall provide Workmen’s Compensation Insurance as required
by the Workmen’s Compensation Act of the Commonwealth of Puerto
Rico. The Seller shall also be responsible for compliance with said
Workmen’s Compensation Act by all its subcontractors, agents, and
invitees, if any.
Liquefied Petroleum Gas Purchase Contract
Page 16
b. The Seller shall furnish the Authority a certificate from the State Insurance
Fund showing that all personnel employed in the work are covered by the
Workmen’s Compensation Insurance, in accordance with this contract.
c. If imported technical personnel are exempted, as per Act of May 16, 1958,
No. 16, the Seller shall furnish evidence of such exemption and certificate
from the insurance carrier covering said personnel.
2) Commercial General Liability Insurance
The Seller shall provide a Commercial General Liability Insurance with limits
of $5,000,000 per occurrence and $5,000,000 aggregate.
3) Employer’s Liability Insurance
The Seller shall provide Employer’s Liability Insurance with minimum bodily
injury limits of $1,000,000 for each employee and $1,000,000 for each
accident covering against the liability imposed by Law upon the Seller as
result of bodily injury, by accident or disease, including death arising out of
and in the course of employment, outside of and in the course of employment,
and outside of and distinct from any claim under the Workmen’s
Compensation Act of the Commonwealth of Puerto Rico.
4) Pollution Liability Insurance
The Seller shall maintain Professional Liability Insurance with limits of
$2,000,000 per occurrence and $2,000,000 aggregate
5) Requirements under the Policies
The Commercial General Liability and Commercial Automobile Liability
Insurance required under this service contract shall be endorsed to include:
a.
As additional insured:
Puerto Rico Electric Power Authority
Risk Management Office
PO Box 364267
San Juan, PR 00936-4267
b.
A 30 day cancellation or nonrenewable notice to be sent to the above
address.
Liquefied Petroleum Gas Purchase Contract
c.
Page 17
An endorsement including this contract under contractual liability
coverage and identifying it by number, date and parties to the contract.
d.
Waiver of Subrogation in favor of PREPA.
e.
Breach of Warranties or Conditions: The Breach of any of the
Warranties or Conditions in this policy by the Seller shall not prejudice
PREPA’S rights under this policy.
6) Furnishing of Policies
a.
All required policies of insurance shall be in a form acceptable to the
“Authority” and shall be issued only by insurance companies
authorized to do business in Puerto Rico.
b.
The Seller shall furnish a certificate of insurance in original signed by an
authorized representative of the insurer in Puerto Rico, describing the
coverage afforded. This certification shall be in the “Acord” form, in
general use by the insurers. Also, original of the endorsements shall be
furnished.
ARTICLE 13: Force Majeure
The Parties hereto shall be excused from performing hereunder and shall not be liable
in damages or otherwise, if and only to the extent that they shall be unable to perform or
are prevented from performing by a Force Majeure event.
For purposes of this
Contract, “Force Majeure” means any cause without the fault or negligence and beyond
the reasonable control of, the Party claiming the occurrence of a Force Majeure. Force
Majeure may include, but not limited to, the following:
Acts of God, industrial
disturbances, acts of the public enemy, war, blockages, boycotts, riots, insurrections,
epidemics, earthquakes, storms, floods, civil disturbances, lockouts, fires, explosions,
interruptions of services due to the acts or failure to act of any governmental authority,
provided that these events, or any other claimed as a Force Majeure event, and/or its
effects, are beyond the reasonable control and without the fault or negligence of the
Party claiming the Force Majeure, and that such Party, within ten (10) days after the
occurrence of the alleged Force Majeure, gives the other Party written notice describing
the particulars of the occurrence and its estimated duration.
Liquefied Petroleum Gas Purchase Contract
Page 18
The burden of proof as to whether a Force Majeure has occurred shall be on the Party
claiming the Force Majeure.
Limitations on Force Majeure
Indemnity and Payment Obligations. Notwithstanding Section no Force
Majeure shall relieve, suspend, or otherwise excuse either Party
from performing any obligation to indemnify, reimburse, hold
harmless or otherwise pay the other Party under this Agreement.
Events Not Force Majeure. The following events shall not constitute Force
Majeure: a Party’s inability to finance its obligations under this
Agreement.
breakdown or failure of plant or equipment caused by normal wear
and tear or by a failure to properly maintain such plant or
equipment; and
in the case of Buyer, acts of a Governmental Authority of, or
changes in Applicable Laws of, the Commonwealth of Puerto
Rico which affect solely or primarily Buyer and are not
generally applicable to all public and private entities doing
business in the Commonwealth of Puerto Rico.
No Extension of Term
The Term shall not be extended as a result of or by the duration of an
event of Force Majeure.
If fiftheen days have elapsed after a Force Majeure event claimed by
Seller PREPA shall have the rigth
Contract.
ARTICLE 14: INTENTIONALLY LEFT BLANK.
ARTICLE 15: Protests and Disputes Resolution
to declare the termination of the
Liquefied Petroleum Gas Purchase Contract
Page 19
Seller and PREPA shall endeavor in good faith to resolve any dispute that arises
between PREPA and Seller regarding the application, interpretation or performance
under any provision of this Contract. If Seller’s and PREPA are unable to reach an
equitable resolution to the dispute, the aggrieved Party shall give notice of protest in
writing to the other Party invoking the provisions of this Article 28 The notice of protest
must be accompanied by a detailed statement clearly identifying supporting
documentation (if applicable). Upon the receiving Party’s receipt of the aggrieved
Party’s written notice of protest invoking the provisions of this Article 28, the following
process shall take place.
A. Within ten (10) calendar days after receipt of a Party’s written notice of protest which
includes a detailed statement and supporting documentation of the claim, the
receiving Party shall answer the protest, in writing, with a detailed statement clearly
identifying the basis upon which the receiving Party refutes the aggrieved Party’s
claims.
B. Within five (5) calendar days of receipt of a Party’s written notice of protest, both
Seller and PREPA shall identify authorized representatives within their organizations
that have the requisite authority to settle the dispute and bind their respective
organizations through their signature and acceptance of the terms and conditions of
a settlement agreement (“Authorized Representatives”). Within the same five (5)
calendar day period, identification and contact information for each organization’s
Authorized Representative shall be communicated through official notification
between the Parties. The Authorized Representative identified by each Party need
not be the same representative previously engaged by either the Seller or PREPA to
lead negotiations to settle the dispute prior to the aggrieved Party’s filing of the
notice of protest.
C. Within fifteen (15) calendar days of receipt of the Party’s written notice of protest, the
Authorized Representatives shall have opened communications and set a date upon
which the Authorized Representatives shall meet at a mutually acceptable location
within San Juan, Puerto Rico, in order to pursue dispute resolution.
D. Within thirty five (35) calendar days of receipt of a Party’s written notice of protest,
the Authorized Representatives shall meet and attempt to resolve the dispute. The
Liquefied Petroleum Gas Purchase Contract
Page 20
dispute resolution process shall proceed in whatever manner that is mutually
acceptable to the Authorized Representatives.
The signature of the Authorized
Representatives on any settlement agreement shall bind the Seller and PREPA
respectively to the terms and conditions of the settlement agreement.
E. In the event that the Authorized Representatives do not reach an agreement and
sixty (60) calendar days have elapsed after receipt of a Party’s written notice of
protest, either Party may pursue its remedy at law or equity. In the meantime, if the
protest involves the lack of payment when due of any invoice presented by Seller to
PREPA, the Seller may stop supplying LPG to PREPA without incurring liability.
ARTICLE 16: Notices
A. Any notice to be given hereunder shall be in writing and will be sufficiently served
when delivered in person or properly mailed, or delivered via fax or via email to the
following addresses:
To PREPA:
Puerto Rico Electric Power Authority
Attention: Fuels Office Manager
P.O. Box 364267
San Juan, Puerto Rico 00936-4267
Physical address:
Juan Ruiz Velez Building
Fuels Office, Suite 301
1102 Ponce de Leon Avenue
Santurce P.R.
Tel: (787) 521-4005
Fax: (787) 521-3464
Email:
To Seller:
COMPANY NAME
Attention:
COMPANY POSTAL ADDRESS
Liquefied Petroleum Gas Purchase Contract
Page 21
Either Seller or PREPA, upon any change of its address set forth above, shall notify of
such change to the other Party in writing.
After such notice, the address therein
specified shall be deemed the address of such Party for the giving of notices.
ARTICLE 17: Termination by PREPA
In the event the Seller fails to materially comply with any of its obligations under this
Contract (a “default”), PREPA may terminate this Contract if, after following the
procedures set forth in Article 28 for resolving protests and disputes, Seller fails to
correct the default condition within the period agreed by the Parties or, if no such
agreement is reached, after the lapse of the sixty (60) day period set forth in Article 28
The exercise of its right to terminate this Contract as set forth hereinabove shall not be
understood as a waiver by PREPA of any other remedy that it may have under this
Contract or pursuant to law for delays or breach incurred by the Seller in the
performance of its obligations under this Contract. PREPA agrees that in the event of
any such termination PREPA shall indemnify Seller for the remaining portion of the
costs incurred by the Seller for the construction of the infrastructure necessary for the
fulfillment of this Contract.
ARTICLE 18: Termination by Reason of Seller’s Insolvency
If Seller enters into bankruptcy proceedings, or if Seller becomes bankrupt or insolvent,
or if a petition in bankruptcy is filed against Seller, or if a receiver is appointed for Seller,
PREPA shall have the right to terminate this Contract upon written notice to Seller,
without prejudice to any claim or any other right of PREPA under this Contract at the
time of such termination.
The termination of this Contract under this provision shall create no liability to PREPA,
unless Seller’s bankruptcy or insolvency is due to PREPA’s failure to perform its
punctual payment obligations under this Contract. In any event, PREPA shall still be
responsible for the payment of amounts due and owing to Seller not subject to valid
claims by PREPA.
Liquefied Petroleum Gas Purchase Contract
Page 22
ARTICLE 19: Termination by Seller
In the event that PREPA shall fail to pay when due any invoice or other sums herein
specified to be paid by PREPA or if PREPA shall fail to perform or observe any other of
its covenants, agreements or obligations hereunder (each, a “default”) Seller may, after
following the procedures set forth in Article 28 for resolving protests and disputes, and
without prejudice to any other remedies which may available to Seller pursuant to law,
terminate this Contract.
ARTICLE 20: Contingent Fees
A. Seller warrants that it has not employed any person to solicit or secure the Contract
upon any agreement for a commission, percentage, brokerage or contingent fee.
Breach of this warranty shall give PREPA the right to immediately terminate the
Contract and/or to deduct from payments to Seller the amount of such commission,
percentage, brokerage, or contingent fee, or to claim said amount by whatever
means available under the law.
B. No officer, employee, or agent of PREPA or of the Commonwealth or Municipal
Governments shall be permitted to share any benefit that may derive from this
Contract, but this provision shall not be construed in a manner that will prevent any
well-established corporation engaged in the sale or distribution of petroleum
products to enter into this Contract merely by reason of its employment of any
person who is related, either by consanguinity or affinity, with a PREPA employee.
C. Seller represents and warrants that it is authorized to enter into and to perform its
obligations under this Contract and that it is not prohibited from doing business in
Puerto Rico or barred from contracting with agencies or instrumentalities of the
Commonwealth of Puerto Rico, including PREPA.
ARTICLE 21: General Liabilities
A. The Seller agrees to make, use, provide, and take all proper, necessary precautions,
safeguards and protection against the occurrence or happening of injuries, death
and/or damages to any person or property during the delivery process, and to be
responsible for, and indemnify, and save PREPA harmless from public liability,
Liquefied Petroleum Gas Purchase Contract
Page 23
costs, and expenses resulting there from, or damages that may happen or occur
solely through the fault or negligent acts or omissions of the Seller, its employees,
agents, and subcontractors, during the performance or the supply, or while carrying
out any act or action directly or indirectly related, or in connection with the
performance of this Contract, and from loss, liability, and fines incurred for, or by
reason of violation by the Seller of any federal, state, or municipal ordinance, or
regulation of law, while said delivery is in progress.
B. Seller will be held responsible for any fines, penalties, damages, expenses, costs, or
claims, actions and causes of actions, which may arise due to the fact that any of the
LPG provided by Seller has deviations or variations from the contracted and
guaranteed specifications for the same. Therefore, should such circumstances take
place, Seller will hold and save harmless and will defend PREPA, its officers,
agents, and employees from any claims, actions, causes of actions, damages, costs,
fines, penalties, and expenses due or attributable to variations or deviations from
LPG specifications as contracted and guaranteed by Seller.
C. Seller agrees to indemnify, defend, and hold harmless PREPA and its directors,
officers, employees and agents against any and all claims, losses, damages and
liabilities, including reasonable attorneys’ fees and costs incurred by any of them
arising out of any breach of any obligation hereunder or any representation or
warranty by Seller hereunder or any tortious or negligent act or omission of Seller in
connection with its performance or non-performance of its obligations hereunder.
D. PREPA agrees to indemnify, defend and hold harmless Seller and its affiliates and
subsidiaries and their respective directors, officers, employees and agents against
any and all claims, losses, damages and liabilities, including reasonable attorneys’
fees and costs incurred by any of them arising out of any breach of any obligation
hereunder or any representation or warranty by PREPA hereunder or any tortuous
or negligent act or omission of PREPA in connection with its performance or nonperformance of its obligations hereunder.
E. The appearing Parties agree that their responsibilities for damages under this
Contract will be governed by the Puerto Rico Civil Code and its case law, as
interpreted by the Supreme Court of Puerto Rico.
Liquefied Petroleum Gas Purchase Contract
Page 24
F. The obligations arising under this Article shall survive and be enforceable after the
termination of this Contract.
ARTICLE 22: Certifications and Sworn Statements
Previous to the signing of this Contract, Seller shall submit the following documents or
certifications:
A. A certification by the Seller which indicates that it has filed its Income Tax Returns
during the five (5) previous years and that it does not owe taxes to the
Commonwealth of Puerto Rico or that it is paying such taxes in accordance with an
installment plan and is in full compliance with its terms.
B. An Income Tax Return Filing Certificate issued by the Treasury Department of
Puerto Rico, Area of Internal Revenues, certifying that the Seller has filed its Income
Tax Returns for the last five years. To require such Certification, the Seller will use
the Request for Copy and/or Certification of Income Tax Returns Form issued by the
Treasury Department of Puerto Rico.
In addition, the Seller shall submit a
Certification of Debt issued by the Area of Internal Revenues.
C. A certification issued by the Municipal Revenues Collection Center (MRCC)
certifying that the Seller does not owe any tax to such governmental agency. To
require such Certification, Seller will use the form issued by the MRCC.
D. A certification by Seller which indicates that at the time of signing this Contract it has
paid to the Department of Labor and Human Resources of Puerto Rico its
employees’ contributions, in accordance with Puerto Rico’s Employment Security
Act (unemployment, temporary disability or sickness or social security for
drivers/chauffeurs); or that it is paying such contributions in accordance with an
installment plan and is in full compliance with its terms. It shall also be Seller’s
responsibility to require all subcontracted third Parties to comply with such
Certification and notify PREPA of such compliance.
E. A certificate, issued by the Department of Labor and Human Resources of Puerto
Rico, assuring that Seller has paid to the Department of Labor and Human
Resources of Puerto Rico its employees’ contributions, in accordance with Puerto
Rico’s Employment Security Act (unemployment, temporary disability or sickness or
Liquefied Petroleum Gas Purchase Contract
Page 25
social security for chauffeurs); or that it is paying such contributions in accordance
with an installment plan and is in full compliance with its terms. To require such
certification, Seller shall use the form issued by the Department of Labor and Human
Resources of Puerto Rico.
F. A sworn statement that neither Seller nor any of its partners or owners have been
convicted of, nor have they plead guilty to the commission of, any felony or
misdemeanor involving fraud, misuse or illegal appropriation of public funds as set
forth in Article 3 of Public Law 428 of September 22, 2004, as amended.
G. A sworn statement to the effect that neither its officials and directors, nor any of its
stockholders, partners, affiliates, subsidiaries or alter egos have been convicted of,
nor have they plead guilty to the commission of, any felony or misdemeanor
involving fraud, embezzlement, or illegal appropriation of public funds as
enumerated in Article 3 of Public Law 428 of September 22, 2004, as amended.
H. The above referenced sworn statement shall also state the neither Seller nor any of
its officials, directors nor any of its stockholders, partners, affiliates, subsidiaries or
alter egos have been convicted of, nor have they plead guilty to the commission of,
any felony or misdemeanor involving fraud, embezzlement, or illegal appropriation of
public funds either in the federal jurisdiction, any territory of the United States or any
other country.
I. Seller expressly acknowledges that the conviction or pleading of guilt by Seller or
any of its officials, directors, or any of its stockholders, partners, affiliates,
subsidiaries or alter egos of any felony or misdemeanor involving fraud,
embezzlement or illegal appropriation of public funds shall constitute sufficient cause
for PREPA to terminate, cancel or rescind this Contract and Seller shall have to
refund all payments received hereunder.
J. It shall also be Seller’s responsibility to require all subcontracted third Parties to
comply with the production of all the aforesaid Certifications and documents, and
agrees to notify PREPA of such compliance within ten (10) working days of
subcontracting such third Party.
K. If any of the previously required Certifications shows a debt, and Seller has
requested a review or adjustment of such debt, Seller will certify that it has made
Liquefied Petroleum Gas Purchase Contract
such request at the time of executing this Contract.
Page 26
If the requested review or
adjustment is denied and such determination is final, Seller will immediately provide
to PREPA proof of payment of such debt.
L. Seller recognizes that the production of the aforementioned certifications and
documents is an essential condition of this Contract; and that even in case that they
are partially incorrect, PREPA will have sufficient cause to terminate, cancel or
rescind the Contract and Seller shall have to refund all payments received.
ARTICLE 23: Modifications and Novation
No modification, change, renewal, extension, discharge, or waiver of this Contract, or
any of the provisions herein contained, shall be valid and binding except by a written,
mutual agreement of the Parties signed by a duly authorized officer of each Party.
PREPA and Seller expressly agree that no amendment or change order which could be
made to the Contract, during its term, shall be understood as a contractual novation,
unless both Parties specifically agree to it, in writing. The previous provision shall be
equally applicable in such other cases where PREPA gives Seller a time extension for
the compliance of any of its obligations under the Contract or where PREPA dispenses
the claim or demand of any of its credits or rights under the Contract.
ARTICLE 24: Independent Contractor
Seller shall be considered an independent contractor for all material purposes under this
Contract, and all persons engaged or contracted by the Seller for the performance of its
obligations herein, shall be considered as its employees or agents or those of its
subcontractors, and not as employees or agents of PREPA. Accordingly, the Seller is
not entitled to any fringe benefits, such as, but not limited to vacations, sick leave or
other.
ARTICLE 25: Contract Assignment
This Contract, as well as any of the rights, duties, liabilities, and obligations under it,
cannot be assigned, transferred, subcontracted, hypothecated, or otherwise disposed of
by Seller without the previous written consent of PREPA. PREPA, however, agrees to
Liquefied Petroleum Gas Purchase Contract
Page 27
authorize the assignment of this Contract and the revenues deriving there from, as
collateral, to the financial entity that from time to time shall be providing financing to the
Seller for the performance of Seller’s activities under this Contract.
ARTICLE 26: Choice of Law
This Contract shall be governed by and construed in accordance with the laws of the
Commonwealth of Puerto Rico. Also, the contracting Parties expressly agree that only
the state courts of Puerto Rico will be the courts of competent and exclusive jurisdiction
to decide over the judicial controversies that the appearing Parties may have between
them regarding the terms and conditions of this Contract.
ARTICLE 27: Code of Ethics
The Seller agrees to comply with the provisions of Act of June 18, 2002, No. 84, which
establishes a Code of Ethics for the Contractors, Suppliers and Economic Incentive
Applicants of the Executive Agencies of the Commonwealth of Puerto Rico
ARTICLE 28: Dispute Resolution
A. Any claim, dispute, disagreement or controversy (each, a “Dispute”) that arises
between the Parties under this Agreement or that is otherwise related to the subject
matter of this Agreement, except for those Disputes to be resolved through Expert
Determination pursuant to Article 28.2 below, shall be resolved in the Federal District
Court for the District of Puerto Rico.
In the event of such Dispute, the PREPA shall continue paying amounts due under
Article 8.
B. Expert Determination
Any Dispute that arises between the Parties with respect to (a) the determination of
quality under Exhibit C may be referred by either Party to an Expert for such Expert’s
determination of such Dispute, disagreement or other matter of interpretation in
accordance with the following guidelines:
1) The Parties hereby agree that such determination shall be conducted
expeditiously by an Expert selected unanimously by the Parties.
Liquefied Petroleum Gas Purchase Contract
Page 28
2) The Expert shall not be deemed to be acting in an arbitral capacity.
3) The Party requesting that any matter arising under Exhibit C of this
Agreement is referred to an Expert shall give the other Party notice of such
request. If the Parties are unable to agree on the identity of an Expert within
ten (10) days after receipt of the notice of request for an Expert determination,
then, upon the request of any of the Parties, the International Centre for
Expertise of the International Chamber of Commerce shall appoint such
Expert and shall administer such Expert determination through the ICC’s
Rules for Expertise.
4) The Expert shall be and remain at all times wholly impartial as between the
Parties, and, once appointed, the Expert shall have no ex parte
communications
with
either
of
the
Parties
concerning
the
Expert
determination or the underlying Dispute.
5) The Expert procedure shall take place in San Juan, Puerto Rico in English.
6) Both Parties agree to cooperate fully in the expeditious conduct of such
Expert determination and to provide the Expert with access to all facilities,
books, records, documents, information and personnel necessary to make a
fully informed decision in an expeditious manner.
7) Before issuing a final decision, the Expert shall issue a draft report and allow
the Parties to comment on it.
8) The Expert shall endeavor to resolve the Dispute within thirty (30) days (but
no later than sixty (60) days) after his appointment, taking into account the
circumstances requiring an expeditious resolution of the Dispute.
9) The Expert’s decision shall be final and binding on the Parties.
C. Qualification of Experts
1) No person, without the prior written agreement of the Parties, shall be
appointed as an expert pursuant to Clause 28.2, if such person:
a.
is (or has been at any time within ten years preceding notice of the
Dispute) an employee of a Party or of an Affiliate of a Party;
Liquefied Petroleum Gas Purchase Contract
b.
Page 29
is (or has been at any time within five years preceding notice of the
Dispute) a consultant or contractor of a Party or of an Affiliate of a
Party;
c.
holds any significant financial interest in a Party;
d.
or does not have at least ten-year experience advising or working in the
North American LPG industry with respect to the subject matters
subject to the Expert’s determination under Clause 28.2.
2) The Parties shall, within two months after the Execution Date, agree on a list
of possible Experts for purposes of Clause 28.2; provided, however, that in
the event that the Parties are unable to agree on a list of acceptable Experts,
then in the event of a Dispute subject to Expert Determination pursuant to
Clause 28.2, the Expert shall be appointed by the International Centre for
Expertise of the International Chamber of Commerce in accordance with
Clause 28.2.
ARTICLE 29: Separability
If a court of competent jurisdiction declares any of the provisions of this Contract null or
invalid, such holding will not affect the validity and effectiveness of the remaining
provisions thereof, and the Parties agree to comply with their respective obligations
under such provisions not included by the judicial declaration.
ARTICLE 30: Entire Agreement
This Contract contains the entire agreement between Parties regarding the subject
matter and any other understandings or agreements are hereby superseded.
Signature page to follow
Liquefied Petroleum Gas Purchase Contract
Page 30
IN WITNESS WHEREOF, the Parties hereto have caused this Contract to be
duly executed as of the_______day of ______, 2012, at San Juan, Puerto Rico.
COMPANY NAME
PUERTO RICO ELECTRIC
POWER AUTHORITY
_______________________________
Name of Representative
Title of Representative
Josué A. Colón Ortiz
Acting Executive Director
EXHIBIT A - Scope of Work
LPG PURCHASE CONTRACT
SAN JUAN PLANT
Tri-Fuel Retrofit of San Juan Combined Cycle Combustion Turbines
I.
Project Description
The scope of work includes the supply of Liquefied Petroleum Gas (LPG or
propane) for a period of four years and the infrastructure required to transport the
LPG to the combustion turbine nozzle inlet in San Juan Plant Units 5 & 6 at MPS
minimum specifications, 370psi and 210°F, at gas combustion turbine’s nozzle
inlet The Project is of the turn-key type and the seller shall be responsible for the
engineering, procurement, and construction (EPC) required for the equipment
modifications, auxiliary equipment, and infrastructure necessary to burn LPG in two
existing 501F Mitsubishi combustion turbines at the Puerto Rico Electric Power
Authority (PREPA) San Juan Plant, keeping the Distillate No. 2 fuel oil as a
secondary fuel and the capability of burning natural gas.
Seller shall use
appropriate certified and authorized personnel, to complete the project within the
scope of supply. The design part of the engineering phase shall consider a
transient loads management solution for supplying LPG continuously during load
fluctuations of electric generators and vaporizers to assure the propane conditions
per MPS propane specifications.
The design and construction of the supply steam piping from PREPA’s commercial
steam header to the vaporizers and its control system shall be part of Seller’s
scope of supply.
For developing this project, modifications to the DF42 nozzles of the combustion
turbines are prohibited.
Category 5 hurricane winds and seismic zone per Puerto Rico’s International
Building Code are the design base parameters.
There shall be 100% of redundancy in the custody metering station, vaporizers and
Seller’s infrastructure’s control systems.
Liquefied Petroleum Gas Purchase Contract
Page 2
For the successful of the project the Seller shall work in coordination with MPS and
Emerson, the company in charge of the combustion turbine’s controls upgrade.
A.
The Seller shall perform all the mechanical, electrical, and civil works
necessary to complete the Project.
B.
LPG Piping: Seller shall procure the materials and construct the pipeline
inside San Juan Plant according to the design completed for the natural gas
conversion. Seller shall comply with the following drawings and specifications
completed by SOCOIN, Is Seller’s responsibility to recertify Socoin drawings
and specifications for the use of liquid and gas propane according to NFPA,
API, ASME, AWS and others that may apply Drawings and specifications are
covered under the terms and conditions of the signed Confidentiality and
Nondisclosure Agreement.
a. Drawings
i.
ii.
iii.
iv.
v.
vi.
vii.
Electric: E-1 to E-3
Grounding: G-1 to G-6
Structural: S-0, S-3 to S-13
Civil: C-0, C-2 to C-4
Process: P-1, P-2
Mechanical: M-0, M-2 to M-6
Isometrics: NG-101 (sheets 1, 2), NG-201: (sheets 1-13),
NG-701, NG-801 (sheet 14), NG-301(sheets 1-11), NG601/501 and NG-501(sheets 2-14)
b. Specifications
i. Document No. DFCP-SJ-C-001 Civil Works Technical
Specification - Revision 1.0
ii. Document No. DFCP-SJ-E-001 Power Cable List - Revision
3.0
iii. Document No. DFCP-SJ-I-001 I&C Cable List - Revision 3.0
iv. Document No. DFCP-SJ-I-002 Signal List Revision 3.0
v. Document No. DFCP-SJ-M-001 Technical Specification For
Piping, Fittings And Flanged Union Components Revision 3.0
vi. Document No. DFCP-SJ-M-002 Technical Specification For
Manual Valves Revision 2.0
vii. Document No. DFCP-SJ-M-003 Technical Specification For
Ball Valves Revision 3.0
Liquefied Petroleum Gas Purchase Contract
Page 3
viii. Document No. DFCP-SJ-M-004 Technical Specification For
Painting Revision 2.0
ix. Document No. DFCP-SJ-M-005 Cathodic Protection System,
Basic Design And Calculations Revision 2.0
x. Document No. DFCP-SJ-SOW-001 Construction Of Natural
Gas Piping Interconnection Revision 1.0
c. The Seller shall prepare other applicable construction drawings and
submit them for PREPA’s evaluation and approval, before starting
the construction. Once the construction and commissioning of the
Project is completed, the awarded seller shall prepare and submit
PREPA As Built Drawings of the project.
C.
Dedicated Auxiliary Equipment: All the dedicated auxiliary equipment
specified, procured, and installed by the awarded contractor for the Project
shall comply with the recommendations of Mitsubishi Power Systems, the
San Juan Combined Cycle Combustion Turbines (SJCCCT) manufacturer.
The dedicated auxiliary equipment includes but is not limited to control valves,
gas evaporator (vaporizers), heater or heat tracer, compressor, relief valves,
stop valves, safety vent valves, safety shut down valve at fuel gas turbine
manifold, over speed trip valve, fuel gas meter, filters, gas leak detectors,
heat and temperature sensors.
D.
Electronics and Communications: All operational, control, and supervisory
signals from auxiliary equipment, the metering station, and send out pumps
shall be integrated to the combustion turbine Digital Control System (DCS)
and fire protection system supervisory terminal at Units’ control room by
means of dedicated fiber optic cables and conduits
E.
Recertification of vessel docking area, if required.
F.
Coating: All steel surfaces, including but not limited to pipes, flanges,
enclosures, cabinets, and supporting structures, shall be painted with a three
coating system for corrosive environment and UV protected, according to
Applicable Law.
G.
Fuel Gas Meter for operational control and performance: The fuel gas
meter to be installed at the combustion turbines for measuring their
Liquefied Petroleum Gas Purchase Contract
Page 4
performance and operational levels shall be a Daniel Coriolis type meter with
accuracy of six aces.
H.
Metering Station (Financial Custody): The financial custody transfer gas
meter at the metering station shall be a Daniel ultrasonic type meter with
accuracy of six aces.
I.
The seller shall performed Non-Destructive Tests (NDT) to all welds: X-Ray
tests to 100% of the welds and hydrostatic tests.
J.
K.
II.
The design and construction of the Project shall include:
1.
Cathodic protection of the pipelines and other equipment.
2.
Gas leak sensors with heat sensor.
.
Combustion Turbines MPS Recommendations for LPG Parameters at the
Turbine Gas Control Skid:
III.
A.
Pressure (minimum): 370 psi
B.
Temperature (minimum): 210 degrees Fahrenheit
C.
Flow of each unit: 428,373 gallons/day = 15.4 MMSCFD = 1,782,717 lbm/day
D.
LPG Classification: HD5
PREPA’s Responsibilities:
A.
Five days for submittal evaluation
B.
Schedule progress meetings
C.
Supply of steam to the vaporizers from the power plant’s commercial steam
header.
IV.
Seller’s Responsibilities
a. Submittals for PREPA approval:
-
Design
-
Equipment’s
-
Materials
-
Parts
-
Procedures
-
I/O signals
-
NDT
Liquefied Petroleum Gas Purchase Contract
-
WPS
-
WPQ
-
PQR
Page 5
b. Compliance with all PREPA’s and local safety and environmental
regulations.
c. All welders and procedures shall be certified and tested per ASME and
AWS standards.
d. Environmental and Safety Program for PREPA’s acceptance evaluation.
e. Engineer Project Manager
f. Safety Supervisor
g. As Built Drawings.
V.
Documentation Delivery
a. Submittals: six copies for evaluation
b. Final Drawings after acceptance: three original signed and certified by an
engineer registered and authorized in Puerto Rico
c. As Built Drawings
d. Project Schedule
e. Insurance for PREPA’s evaluation and acceptance.
f. Environmental and Safety Program for PREPA’s acceptance evaluation.
g. WPQ, PQR
h. Pipe’s mill’s test
i.
Proposals shall be accompanied with a project schedule and with all
requirements as specified in the Request for Proposal document.
VI.
Most Recent Regulations, Codes and Standards, but not limited to
a. NACE
b. ASME
c. AWS
d. API,750, Management of Process Hazards, API 2510 Design and
Construction of LPG installations, eight edition, May 2001; and others that
may apply.
e. DOT
Liquefied Petroleum Gas Purchase Contract
Page 6
f. ANSI
g. IEC
h. Puerto Rico Public Service Commission
i.
NFPA,
58
Liquified
Petroleum
Gas
Code,
2011
Edition
and
Sections13.2.1.9, 6.9.3.10,6.22.2.2; and others that may apply.

NFPA 85, Boiler and Combustion System Hazardous Code, 2011
Edition and Chapter 8; and others that may apply.

NPFA 850, Section 8.5.3.3 (2010 Edition); and others that may
apply.

j.
NFPA 70,
ASCI
k. NEC
l.
Puerto Rico International Building Code
----------------------------------------END OF PROJECT SCOPE---------------------------------------
EXHIBIT B – Delivery Point
LPG PURCHASE CONTRACT
EXHIBIT C - Specifications
LPG PURCHASE CONTRACT
LPG SPECIFICATIONS
LIQUEFIED PETROLEUM GASES (LPG)
PROPANE- HD-5
Composition
No less than 90 liquid
volume
more
percent;
than
volume
5
not ASTM D-2163
liquid
percent
propylene
Vapor pressure at 100o, max, psig
208
ASTM D-1267
-37
ASTM D-1837
Volatile residue: evaporated temperature,
95%, max, 60°F
Residual matter:
residue on evaporation 100 mL, max 0.05 ml pass
ASTM D-2158
mL
oil stain observation
Corrosion, copper, strip, maX
No. 1
ASTM D-1838
Sulfur, ppmw
123
ASTM D-2784
Moisture content
Pass
ASTM D-2713