Exhibit 10.20

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MARINE DOCK AND TERMINALING AGREEMENT

Between

SUNOCO PARTNERS MARKETING & TERMINALS L.P.

and

MOTIVA ENTERPRISES LLC

Dated as of December 15, 2006

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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MARINE DOCK AND TERMINALING AGREEMENT

This Marine Dock and Terminaling Agreement (the “Agreement”) is made and entered into on this 15th day of December, 2006 by and between Sunoco Partners Marketing and Terminals L. P., a Texas limited partnership ("Sunoco Partners"), and Motiva Enterprises LLC, a Delaware Limited Liability Company (“Motiva”). (Sunoco Partners and Motiva shall be hereinafter referred to individually as “Party” or collectively as the “Parties”).

WITNESSETH

WHEREAS, Sunoco Partners owns and operates a marine storage and terminaling facility which is located at or near Nederland, Texas, including marine docks, tanks, and all other facilities and services in connection with the receipt, storage, measurement and delivery of crude oil from vessels and connecting pipelines (the “Nederland Terminal”);

WHEREAS, Motiva is a refining and marketing company that owns a refinery and related facilities located at Port Arthur, Jefferson County, Texas, including the facility located in Port Neches, Texas (the “Port Arthur Refinery”);

WHEREAS, Sunoco Partners proposes to design, engineer, construct and complete certain enhancements to the Nederland Terminal, as further described herein (the “Nederland Terminal Expansion”), and to achieve Facility Mechanical Completion by no later than January 1, 2010;

WHEREAS, the Parties hereto mutually desire that during the term of this Agreement Sunoco Partners shall provide certain terminaling services at the Nederland Terminal to Motiva, including delivery of crude oil to the approximately 12.1 mile, 30” pipeline linking the Nederland Terminal to the Port Arthur, Texas Refinery (the “Pipeline”);

 

2

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WHEREAS, Motiva and Sunoco Pipeline L.P. (“Sunoco”) will enter into a Throughput & Delivery Agreement for the receipt, transportation and delivery of Crude Oil from the Nederland Terminal to the Port Arthur Refinery via the Pipeline, as well as construction services related thereto (the “T&D Agreement”).

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, Sunoco Partners and Motiva hereby agree:

1.0 TERM OF THE AGREEMENT

This Agreement shall be in full force and effect on the Effective Date; however, the Term of this Agreement shall commence upon the Commencement Date (defined in Section 2.6) and, subject to the termination provisions set forth herein, shall continue for a term of ten (10) Contract Years (the “Term”). The Parties agree to enter good faith renewal negotiations following receipt of written notification by one Party to the other no later than four (4) years prior to the end of the Term. If the Parties cannot agree on the terms and conditions of a renewal of this Agreement within six (6) months from the date of the written notification, this Agreement will terminate at the end of the Term.

2.0 CONSTRUCTION AND COMMENCEMENT DATE

2.1 Sunoco Partners, at its sole cost and expense, will design, engineer, modify, construct, and equip, or caused to be designed, engineered, modified, constructed, and equipped, the Nederland Terminal in accordance with the specifications for the Nederland Terminal Expansion listed in EXHIBIT A . Without limitation to the foregoing, EXHIBIT A shall also include a construction schedule for the Nederland Terminal Expansion, construction progress reporting procedures, and capacity requirements designed to ensure that, following the Nederland Terminal Expansion, the Nederland Terminal will

 

3

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have sufficient capacity to receive, handle and store Crude Oil per Motiva’s requirements, as well as deliver such Crude Oil to the Pipeline. Should Motiva desire to change the scope of the Nederland Terminal Expansion after the Effective Date or during the Term hereof, the Parties will work together in good faith to implement any such change.

2.2 Motiva, at its option, may be represented on Sunoco Partners’ construction team, and may have a representative present at any and all times at all locations where Sunoco Partners or its subcontractors are engaged in the construction and/or operation of any part of the Nederland Terminal, in each case in an observer capacity only; provided, however, that Motiva shall have no rights to direct or control the construction and/or operation of the Nederland Terminal.

2.3 Sunoco Partners shall apply for and use commercially reasonable efforts to secure commercially reasonable terms on all rights-of-way (whether from private parties or any governmental agency or authority); licenses; permits; property rights of ingress and egress; certificates; servitudes; judgments, orders, or ruling; patents or patent licenses; operating agreements; and other authorizations (collectively “Authorizations”) as may be required for the purpose of providing, modifying, constructing, operating and maintaining the Nederland Terminal. Motiva shall use commercially reasonable efforts to comply with any commercially reasonable request from Sunoco Partners for assistance in seeking Authorizations.

2.4 The design and construction at the Nederland Terminal shall materially comply with all applicable federal, state, and local laws, regulations, ordinances, orders, and directives and generally accepted pipeline industry standards.

 

4

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

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2.5 As of the Effective Date, Sunoco Partners shall begin engineering and other work with respect to the Nederland Terminal Expansion and shall use all commercially reasonable efforts to cause the Nederland Terminal Expansion to achieve Facility Mechanical Completion on or before January 1, 2010, provided that this date shall be extended by any period of Force Majeure, by delays due to regulatory matters or inclement weather, or as may otherwise be agreed in writing by the Parties.

(a) Notwithstanding the foregoing, and as an incentive to achieving Facility Mechanical Completion of the Nederland Terminal Expansion ahead-of-schedule, Motiva will pay Sunoco Partners the Throughput Fees outlined in Section 7.1, plus [******] (the “Incentive Payment”), if (1) Sunoco Partners achieves Facility Mechanical Completion of the Nederland Terminal Expansion by December 1, 2009; and (2) Sunoco achieves Pipeline Mechanical Completion of the Pipeline, as required by the T&D Agreement, by December 1, 2009. Such Incentive Payment will only apply on the first [******] Barrels stored and handled at the Nederland Terminal during the first Contract Year.

(b) Should Sunoco Partners not achieve Facility Mechanical Completion of the Nederland Terminal Expansion by January 1, 2010, or should Sunoco not achieve Pipeline Mechanical Completion of the Pipeline, as required by the T&D Agreement, by January 1, 2010, for reasons other than Force Majeure, and should the Facility Mechanical Completion of the expansion project at the Port Arthur Refinery have been achieved by that date, then Sunoco Partners will credit Motiva (in the form of Prepaid Terminaling Credits) with the Base Throughput Fee multiplied by the pro rata Base Volume Amount for the period from January 1, 2010 until the Commencement Date, subject to Motiva’s obligation to exercise its commercially reasonable efforts to minimize such damages.

 

5

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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(c) Should Sunoco Partners achieve Pipeline Mechanical Completion on or before December 1, 2009, and provided that Sunoco Partners has achieved Facility Mechanical Completion of at least one storage tank at the Nederland Terminal, then upon notice by Sunoco to Motiva of such Facility Mechanical Completion, Motiva shall throughput Crude Oil or cause Crude Oil to be throughput at the Facility, at the Base Throughput Fee outlined in Section 7.1, a minimum guaranteed volume of [******] Barrels per month (the “Pre-Commencement Date Obligation”), from the date of first crude oil delivery until the Commencement Date. Any excess or shortfall of the Pre-Commencement Date Obligation during any month prior to the Commencement Date shall be cumulatively carried forward to each succeeding month. Should Motiva fail to throughput the total Pre-Commencement Date Obligation by the end of the month immediately preceding the Commencement Date, then Motiva shall have the obligation to make a payment to Sunoco in an amount equal to the amount of such shortfall in barrels for the Pre-Commencement Date Obligation multiplied by the applicable rate, and Motiva shall have no further obligation to throughput any shortfall of Pre-Commencement Date Obligation barrels. Such payment to Sunoco will be made within fifteen (15) days after the Commencement Date.

2.6 The “Commencement Date” of this Agreement shall be the latter of: (i) the date that the expansion project at the Port Arthur Refinery achieves Facility Mechanical Completion; or (ii) the first day of the month following the date Sunoco Partners notifies

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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Motiva in writing that Sunoco Partners has achieved Facility Mechanical Completion of the Nederland Terminal Expansion. Without prejudice to the foregoing, if the Commencement Date has not occurred by July 1, 2010 because the expansion project at the Port Arthur Refinery has not achieved Facility Mechanical Completion, then Motiva shall begin to pay Throughput Fees to Sunoco Partners, calculated based on the pro rata portion of the Base Volume Amount for the time period from July 1, 2010 until the Commencement Date, and Motiva shall receive Prepaid Terminaling Credits corresponding to such payments, subject to the provisions of Section 6.

2.7 Without prejudice to any other provision of this Agreement, Motiva shall have the option, exercisable at any time before 11:59 p.m. on July 1, 2007, to provide a written notice instructing Sunoco Partners to proceed with the construction of the dock and related facilities described on EXHIBIT B, under the terms provided therein (the “ [******] Option”).

3.0 FACILITIES TO BE PROVIDED BY SUNOCO PARTNERS.

As part of the services to be provided at the Nederland Terminal, Sunoco Partners shall provide to Motiva the use of the following facilities at the Nederland Terminal in accordance with the terms and conditions set forth herein.

3.1 Facilities for Motiva’s Exclusive Use

During the Term, Sunoco Partners shall make the following facilities and related services at the Nederland Terminal available for Motiva’s exclusive use:

 

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TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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(a) Sunoco Partners will provide Motiva with exclusive use of the following storage tanks:

 

(b) Substitution of similar storage tanks when required for Sunoco Partners’ convenience will be as mutually agreed between Sunoco Partners and Motiva.

(c) At Sunoco Partners’ discretion, any tank cleaning and gas freeing of storage tanks required at the end of the Term or as the result of a change of service will be paid by Motiva at Sunoco Partners’ actual cost (subject to verification by Motiva). Tank cleaning means squeegee clean suitable for Crude Oil service and gas freeing refers to tank farm safety standards and not certified hot work.

(d) Motiva will maintain a sufficient quantity of Crude Oil at the Nederland Terminal to float the roofs of the storage tanks until time of final exit of the Crude Oil, consistent with agreed operating procedures established between Sunoco Partners and Motiva.

3.2 For Motiva’s Non-Exclusive Use

During the Term, Sunoco Partners will provide, operate, and maintain for Motiva’s non-exclusive use at the Nederland Terminal facilities consisting of lines, pipes, gauges, berths, and pumping sufficient to receive and deliver Motiva’s Crude Oil, including the following:

 

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(a) The use of the following ship berths:

 

The above ship berths shall have the following equipment:

 

Sunoco shall exercise its commercially reasonable efforts to maintain the water depth at each of these ship berths at 40 (forty) feet below mean low water.

 

9

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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(b) A mainline pump station and metering facility for deliveries of Crude Oil to the Pipeline will be provided and operated by Sunoco Partners. Capacity of such mainline pump station will be sufficient to provide up to [******] BPH pumping rate at a discharge pressure of 500 psig when pumping Crude Oil, based on the following assumptions:

(i) Pumping through the Pipeline from the Nederland Terminal to the Port Arthur Refinery.

(ii) Crude Oil with characteristics of 21º API Gravity and 500 SSU viscosity.

(iii) Delivery pressure at the inlet to the metering facility at the Port Arthur Refinery at 80 psig.

(c) A delivery metering facility for measurement to the Pipeline will be provided and operated by Sunoco Partners. The capacity of such facility will be a maximum of [******] BPH.

4.0 MAINTENANCE OF THE NEDERLAND TERMINAL

During the Term, Sunoco Partners shall use commercially reasonable efforts to operate the Nederland Terminal so as not to interrupt the flow of ratable deliveries to the Port Arthur Refinery, including by maintaining the Nederland Terminal and scheduling shutdowns for preventive maintenance in a manner that minimizes disruptions to Motiva hereunder. To the extent reasonably possible, Sunoco Partners shall provide Motiva with reasonable notice of any scheduled shutdown of the Nederland Terminal for maintenance which would materially and adversely affect Sunoco Partners’ performance hereunder. Sunoco Partners shall promptly perform any unscheduled maintenance of the Nederland Terminal, including without limitation any unscheduled maintenance required or reasonably requested by Motiva. During the Term of this Agreement, Sunoco will make commercially reasonable efforts to operate the Pipeline.

 

10

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

5.0 SERVICES TO BE PERFORMED BY SUNOCO PARTNERS

5.1 Sunoco Partners agrees to receive deliveries of Crude Oil into the Nederland Terminal by vessel and to store such Crude Oil in tanks provided for Motiva’s use pursuant to Section 3.1, all in accordance with terms of this Agreement and conditions set forth in the latest edition of the Nederland Terminal Port Manual.

5.2 All Crude Oil received hereunder by Sunoco Partners shall have properties within the following limits:

 

Sunoco Partners shall have no obligation to receive or handle any of Motiva’s Crude Oil with properties that do not meet the criteria specified above. Sunoco Partners may, in its sole discretion, elect to receive and handle such non-conforming Crude Oil, subject to the physical limitations of the Nederland Terminal and general terminal industry practice. In no event, however, shall Sunoco Partners be required to receive into storage tanks at the Nederland Terminal any Crude Oil with properties which would result, in Sunoco Partners’ sole opinion, in Sunoco Partners’ non-compliance with federal, state, or local regulatory requirements applicable to the Nederland Terminal.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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5.3 Sunoco Partners will perform routine physical inspections and laboratory tests of Crude Oil shipments and receipts in order to properly identify shipments and in order to ensure conformance with the above criteria. Motiva shall have the right to witness such inspections and tests.

5.4 Deliveries from the Nederland Terminal storage tanks will be made to the Pipeline in accordance with Motiva’s reasonable instructions and with scheduling practices for the Pipeline.

5.5 Sunoco Partners receives and delivers both sweet Crude Oil and sour Crude Oil (for the purpose of this Agreement, “sour Crude Oil” means Crude Oil with sulphur content greater than 0.5%) through certain common usage facilities (i.e., dock lines, pump suction lines, pumps, etc.). Mixing of sweet and sour Crude Oil in common usage facilities during receipt and redeliveries of Motiva's Crude Oil may occur. Motiva agrees that Sunoco Partners will not be liable for any resultant downgrading due to the mixing of Motiva's Crude Oil in common usage facilities at the Nederland Terminal. Sunoco Partners agrees to use commercially reasonable efforts to operate such common usage facilities in a manner which minimizes such downgrading, provided, however, that Sunoco Partners shall not be required to make line displacements.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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6.0 THROUGHPUT OBLIGATION AND DEFICIENCY PAYMENT

6.1 During each Contract Year of the Term or any renewal thereof, Motiva will throughput or cause to be throughput at the Nederland Terminal a volume of [******] Barrels of Crude Oil (the “Base Volume Amount”).

6.2 At the conclusion of each Contract Year, an accounting will be made of the quantities of Crude Oil that Motiva has throughput or caused to be throughput at the Nederland Terminal during such Contract Year. If, during any Contract Year, the shipments of Crude Oil that Motiva throughput or caused to be throughput at the Nederland Terminal do not meet or exceed the Base Volume Amount, then Motiva shall receive prepaid terminaling credits (“Prepaid Terminaling Credits”) equal to the difference between the Base Volume Amount and the number of Barrels of Crude Oil that Motiva actually throughput or caused to be throughput at the Nederland Terminal during that Contract Year (the “Base Volume Shortfall”).

6.3 Motiva may use Prepaid Terminaling Credits as credits against the payment of terminaling charges for Crude Oil that Motiva may throughput or cause to be throughput at the Nederland Terminal during the succeeding two (2) Contract Years, subject to Section 6.4 below. In the event Motiva holds unused Prepaid Terminaling Credits at the time of the termination or expiration of this Agreement (except for a termination by Sunoco Partners for a Motiva default), then Motiva shall have the one (1) year period immediately following such termination or expiration to use such Prepaid Termination Credits. In such event, Motiva shall notify Sunoco Partners of the number of Prepaid Termination Credits that Motiva plans to use during that one (1) year period, and within 30 (thirty) days of that notice, Motiva will provide to Sunoco Partners a schedule for the corresponding throughputs at the

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

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Nederland Terminal. Sunoco Partners shall designate tankage and facilities at the Nederland Terminal for Motiva’s throughputs according to that schedule. Any Prepaid Terminaling Credits that remain at the end of the one (1) year period will expire.

6.4 Motiva must first meet or exceed the Base Volume Amount during the applicable succeeding Contract Year before any Prepaid Terminaling Credits may be applied for quantities in excess of the Base Volume Amount; provided, however, that Motiva shall not be required to meet or exceed the Base Volume Amount in order to use Prepaid Terminaling Credits during the one (1) year period immediately following the termination or expiration of this Agreement.

6.5 If Motiva is unable to throughput the Base Volume Amount during any Contract Year due to Sunoco Partners’ failure to operate the Nederland Terminal in accordance with generally accepted terminal industry standards and the terminal industry practices and procedures used by a commercially reasonable operator, the Prepaid Terminaling Credits arising from the Base Volume Shortfall attributable to Sunoco Partners’ failure may be utilized by Motiva during any succeeding Contract Year during the Term or during the one (1) year period immediately following the termination or expiration of this Agreement (except for a termination by Sunoco Partners for a Motiva default).

7.0 FEES

7.1 Each Contract Year during the Term, Motiva shall pay to Sunoco Partners an amount equal to [******] Barrels multiplied by the then-current Throughput Fee (the “Base Throughput Fee”). The Base Throughput Fee in effect on the Effective Date will be [******] for each Barrel of Crude Oil, subject to indexation in accordance with the provisions of Section 7.8.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL

TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [******] AND HAS

BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

7.2 For any Barrel of Crude Oil that Motiva throughputs during any Contract Year in excess of the Base Volume Amount, but less than [******] Barrels, Motiva shall pay to Sunoco Partners a Throughput Fee of [******] per Barrel, subject to indexation in accordance with the provisions of Section 7.8.

7.3 For any Barrel of Crude Oil that Motiva throughputs during any Contract Year in excess of [******] Barrels, Motiva shall pay to Sunoco Partners a Throughput Fee of [******] per Barrel, subject to indexation in accordance