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Exhibit 10.6

GRACE PLATFORM LEASE AGREEMENT

BETWEEN

VENOCO, INC.

AND

CRYSTAL ENERGY, LLC

DATED

MARCH 1, 2003

GRACE PLATFORM LEASE AGREEMENT

Table of Contents

SCHEDULES

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GRACE PLATFORM LEASE AGREEMENT

        This Grace Platform Lease Agreement (the "Agreement" or the "Platform Lease") is made and entered into effective as of the 1st day of October, 2002 ("Effective Date"), by and between Venoco, Inc., a Delaware corporation ("Venoco" or "Platform Owner"), as owner of Grace Platform (defined below) and Crystal Energy LLC, a Delaware limited liability company ("Crystal Energy" or "Lessee") with each party to this Agreement being referred to individually as "Party" and collectively as the "Parties."

INTRODUCTION

        Platform Owner owns the Grace Platform and conducts a pipeline Pigging Operation on the Grace Platform.

        Lessee is in the process of developing a business of accepting and vaporizing LNG delivered by LNG Tankers, transporting the vaporized LNG through proprietary Gas Pipelines and selling the vaporized LNG to third party customers.

        Lessee desires to lease the Grace Platform for use in its LNG Business, including serving as a location for use and operation of its LNG Equipment and as a location for connection to its LNG Mooring System and its Gas Pipelines.

        Platform Owner agrees to lease the Grace Platform to the Lessee for use in its LNG Business pursuant to the terms hereof.

        The construction of the LNG Mooring System, fabrication of the LNG Equipment, and construction of the Gas Pipelines by Lessee or its affiliates and the operation of the LNG Business will require Permits to be obtained at Lessee's cost by Platform Owner and/or Lessee.

        Neither Platform Owner nor Lessee can predict when, if ever, all such Permits will be obtained as required to construct and operate the LNG System.

        Lessee desires to obtain from Platform Owner an annually renewable option to commence the Lease Term with respect to the Grace Platform.

        Platform Owner and Lessee desire to set out the terms of their agreement (1) applicable during the period before Lessee exercises its option to cause commencement of the Lease Term; (2) applicable during the Lease Term; and (3) regarding rights and responsibilities for removal of the LNG System from the Grace Platform, in connection with the termination of the Lease Term.

        For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and also in consideration of the mutual covenants and conditions contained herein, the Parties agree as follows:

1.0   DEFINITIONS, INTERPRETATIONS AND PROCEDURAL CONVENTIONS

        Unless the context shall otherwise require, terms used and not defined herein shall have the meanings set out in Schedule 1 attached hereto and incorporated herein by this reference and all rules as to usage and procedural conventions set forth in Schedule 1 shall govern this Agreement.

2.0   OPTION TO LEASE GRACE PLATFORM AND LEASE OF GRACE PLATFORM

        2.1   In consideration of the timely payment annual Option Payment by Lessee to Platform Owner, Platform Owner hereby grants to Lessee the option, at any time during the Option Period, to lease, under the terms of this Agreement, the Grace Platform and to take possession of the Grace Platform

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as a tenant. The Option Payment equals Three Hundred Thousand Dollars ($300,000) for each twelve month Option Period and shall be due according to the following schedule:

        2.2   A five percent (5%) late charge will be due on all Option Payments more than thirty (30) days late. If any Option Payment is more than sixty (60) days past due, Lessee shall forfeit all rights in this Agreement and the right to proceed to lease hereunder unless the option payment due date is extended in writing by Platform Owner at Platform Owner's sole option.

        2.3   Lessee has the right to terminate this Agreement, at any time during any Option Period, and thereafter have no obligation to the Platform Owner to pay any additional Option Payment (other than past due amounts or other charges owing), to commence the Lease Term or to lease the Grace Platform. If Lessee exercises its right to terminate this Agreement without commencing the Lease Term, Lessee shall not be entitled to any refund, repayment, credit or offset for any Option Payment previously paid to Platform Owner. If Lessee exercises its right to lease the Grace Platform and to commence the Lease Term during any Option Period, a prorata portion of the Option Payment for the Option Period in effect at the time the Lease commences shall be credited to the account of Lessee as prepaid rent. The proration of the Option Payment shall be made, as of the day the Lease Term commences, using a per day proration based on an Option Period of 365 days.

        2.4   Upon exercise by Lessee of the option described in Section 2.1, Lessee shall provide written notice to Platform Owner of the Lessee's exercise of the option to lease the Grace Platform and of the date, not more than thirty (30) days thereafter, of commencement of the Lease Term ("Lease Effective Date"). Platform Owner agrees to lease the Grace Platform to Lessee and Lessee agrees to lease from Platform Owner the Grace Platform, during the Lease Term. Lessee agrees to pay to Platform Owner and Platform Owner agrees to accept as consideration of the lease of the Grace Platform during the Lease Term the Rent as computed in accordance with Section 4.

        2.5   During the Option Period or Periods, Platform Owner may utilize the Platform for certain alternative uses consistent with the terms of this Agreement and with the permitting process for the LNG System. Not as a limitation on the foregoing sentence, advance approval is deemed specifically herein provided for the allowance of Platform Owner's oil and gas operations as set forth in Section 10 and a pilot mariculture project for salt-water fish breeding and rearing as described in that certain Draft Lease Agreement dated March 10, 2003 attached as Appendix A hereto. Should Lessee exercise its option to proceed to Platform Lease, said mariculture project shall be subject to timely cessation, which total cessation and removal from the Grace Platform shall not exceed 200 days from the date of notice of cessation is sent by Lessee to Platform Owner. Lessee's right to timely cessation of alternative uses shall not apply to Platform Owner's oil and gas operations as set forth in Section 10.

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3.0   TERM OF AGREEMENT AND LEASE TERM

        3.1   This Agreement shall commence on the Effective Date and unless sooner terminated as provided for elsewhere in this Agreement, this Agreement shall remain in full force and effect until the end of the applicable Lease Term. The Lease Term, unless sooner terminated, shall be as follows:

        (a)   The Lease Term shall be for ten (10) years from the Lease Effective Date as set forth in Section 2.4. Thereafter, Lessee shall have the option to extend the lease for three (3) additional consecutive periods of Ten (10) years each, a total potential aggregate Lease Term of forty (40) years. At the commencement of each of the First, Second and Third Extended Lease Terms, Lessee shall pay a non-refundable lease extension fee of $1,000,000, $1,500,000 and $2,000,000, respectively in order to enter the next ten (10) year period.

        (b)   The Lease Term may terminate on the earliest to occur of (1) the date of the closing of the purchase of the Grace Platform by Lessee according to the provisions of Section 3.2; (2) a date which is sixty (60) days after any uncured default in the payment of rent to Platform Owner as set forth in Section 4; and (3) the date which is one (1) year after delivery by the Lessee of written notice of its election to terminate the applicable Lease Term; provided that the Lease Term shall not be terminated sooner than the date that Lessee completes its obligations for LNG System Removal as set forth herein below.

        3.2   (a) Lessee shall have the right to purchase the Grace Platform "as is" at any time before the first anniversary of the Lease Effective Date, including any time before the Lessee shall have received all the Permits required for the construction and operation of the LNG System. Lessee shall exercise said right by written notice to Platform Owner effective within said time period. The purchase price shall be (i) ten million dollars ($10,000,000) plus (ii) the agreement of Lessee to assume the obligations to conduct, at Lessee's expense, the reclamation and abandonment operations described on Schedule "3.2" ("Platform Purchase Price"). If Lessee elects to exercise its option to purchase the Grace Platform under this Section 3.2, Platform Owner will provide to Lessee an assignment, if and as permitted by all relevant governmental agencies and Chevron USA, Inc. ("CUSA") pursuant to that certain agreement referred to in Schedule 3.2, (Platform Owner shall use its best efforts to obtain CUSA consent) of all of Platform Owner's interest in the Grace Platform, including any contract rights, permits or other assets necessary for Lessee to own and use the Grace Platform for the LNG Business, and Lessee shall indemnify and hold Platform Owner harmless from any and all costs associated with obtaining government and CUSA consents or permits necessary therefor. Lessee shall fully cooperate with Platform Owner in pursuing such consents and permits, and the parties shall use their best efforts to close and complete such purchase and sale within ninety (90) days from the effective date of the notice required in this subsection 3.2(a).

        (b)   The Grace Platform sale to Lessee herein shall not include the interests of Platform Owner in and to Platform Owner's oil and gas production and/or reserves and leasehold interests. Lessee's reclamation and abandonment activities shall be deferred until such production and reserves have been produced and, in the sole opinion of Platform Owner, have become uneconomic. This provision shall not relieve Lessee of its obligations to indemnify Platform owner as herein provided.

        (c)   If at any time after the first anniversary of the Lease Effective Date, Platform Owner desires to sell the Grace Platform, Lessee shall have the right but not the obligation to purchase the Grace Platform by paying to Platform Owner the amount of an actual bona fide offer from a third party. Lessee shall exercise said right by written notice to Platform Owner effective within thirty (30) days of receipt by Lessee of notice of said third party offer. The closing and cash payment of the purchase price by Lessee shall occur not later than ninety (90) days after Lessee's election to purchase.

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        (d)   In the event Platform Owner desires permanently to cease the Pigging Operations and other Platform Owner oil and gas and related operations conducted on the Grace Platform before the expiration of this Agreement, Platform Owner shall give written notice to Lessee. Lessee shall have the exclusive right for thirty (30) days from receipt of such notice to negotiate with the Platform Owner for the price and terms of a purchase of the Grace Platform. If after thirty (30) days of exclusive negotiation, the parties are unable to reach agreement on the price and terms for the sale of the Grace Platform to the Lessee, the Platform Owner shall have the right to obtain offers from third parties. Lessee shall have an additional thirty (30) days in which to accept the same price and terms of any bona fide third party offer for the purchase of the Grace Platform. If the third party offer includes any other assets or any consideration other than cash, the terms of the third party offer shall be presented with any consideration other than cash or deferred cash converted to cash. At the closing of any sale to Lessee herein, according to this paragraph 3.2 (d), Platform Owner shall provide to Lessee an assignment from the Platform Owner for all of its interest in Grace Platform, including any contract rights, permits or other assets necessary for Lessee to own and use the Grace Platform for the LNG Business. In the event of a sale to Lessee pursuant to this clause, (1) Lessee shall pay a mutually agreed upon purchase price or match the third party offer; and (2) Lessee shall retain all costs, risks and liabilities for abandonment and reclamation in accordance with Schedule 3.2 and in accordance with present or future MMS regulations or applicable requirements of other Governmental Authorities. If Lessee fails to purchase the Grace Platform as provided in this Section 3.2 (d) and if a third party shall purchase the Grace Platform, such third-party purchase shall be subject to Lessee's rights hereunder such that Lessee shall continue to have the right to lease the Grace Platform under the terms of this Agreement.

        (e)   Any sale to Lessee pursuant to this Section 3.2 shall be subject to the execution of a mutually satisfactory purchase and sale agreement ("PSA") between the Parties containing the terms specified in the relevant subsection of Section 3.2 and which in all respects shall be consistent with the Parties' respective rights and duties as provided in this agreement.

        3.3   At the election of the Lessee, the Lessee may give written notice to Platform Owner that the Lessee and its Affiliates are required to cease operation of the LNG System due to the lack of any approval, permit, or other governmental authorization that is required for continued operation of the LNG System or conduct of the LNG Business by the Lessee or its Affiliates. Such an early termination of the lease shall be effective upon the later of (1) completion of the LNG System Removal or (2) the notice period required in Section 3.1 (b).

        3.4   At any time during the term of this Lease, the Platform Owner, at its election, may give written notice to Lessee, effective in one hundred eighty (180) days after the date of such notice, that Platform Owner will no longer maintain Platform Grace as herein provided as a result of governmental actions or other events making it, in the opinion of Platform Owner, legally or economically infeasible to continue to honor this Lease. Upon receipt of such notice, Lessee shall have the right to purchase the Platform for the Platform Purchase Price as defined in subsection 3.2(a) upon all of the terms provided therein, except the time limit of the first anniversary, and upon giving notice of its election to do so within thirty (30) days of receipt of said notice from Platform Owner, provided such purchase is completed before the earlier of ninety (90) days from the exercise of such right by Lessee or the date by which governmental action requires the termination of operation on Grace Platform by Platform Owner.

4.0   COMPUTATION OF RENT

        During the Lease Term Platform Owner shall have the exclusive right to maintain, repair and modify the Grace Platform as set forth in this Agreement. The following is the Rent required to be

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paid by Lessee to Platform Owner for such work and services to be computed and paid in accordance with Schedule 13.3 of this Agreement:

        (a)   BASE MONTLY RENT: Lessee shall pay to Platform Owner the base monthly rent ("Base Monthly Rent") compiled as follows:

        i.      As the Base Monthly Rent, Lessee shall pay Platform Owner an amount equal to the actual maintenance component for the Grace Platform equal to the maintenance, repair and modification costs, including employee benefits, incurred by Platform Owner in connection with the maintenance, repair and modification of the Grace Platform plus a charge equal to fifteen percent (15%) of the aggregate of all such costs to reimburse Platform Owner for the administrative costs associated with conducting the maintenance program. The Base Monthly Rent component will be computed and paid according to Schedule 13.3.

        ii.     Upon the earlier to occur of the tenth (10 ^th ) anniversary of the Lease Effective Date or the termination of production from platform Gail, Lessee shall owe Platform Owner the Base Monthly Rent, payable as provided in Schedule 13.3, plus an additional One Hundred Thousand Dollars ($100,000) per month "Base Minimum Monthly Fixed Rental", payable in advance each month, without the necessity of Platform Owner invoicing Lessee therefor. The Base Minimum Monthly Fixed Rental shall be a deduction against any amounts of Variable Rent accrued. For example, if the Base Minimum Monthly Fixed Rental paid to Platform Owner exceeds the amount of the Variable Rent, no Variable Rent will be due for that month. If the Variable Rent exceeds the Base Minimum Monthly Fixed Rental, such excess shall be paid when otherwise due to be paid. In no instance, however, shall Base Minimum Monthly Fixed Rental be returned to Lessee by Platform Owner.

        (b)   VARIABLE RENT: Lessee shall pay to Platform Owner the Variable Rent computed with respect to the activity recorded by Lessee with respect to each calendar quarter. Such Variable Rent shall be computed as follows:

        (i)    The greater of (a) an amount equal to $0.02 per MSCF of each MSCF of gas delivered from the LNG Equipment into the Gas Pipeline or (b) an amount equal to five percent (5%) of the gross revenue received by the Lessee for LNG Processing Services. LNG Processing Services as used herein means the aggregate charges of Lessee for accepting, pressurizing, heating vaporizing the LNG delivered from LNG Tankers through the LNG System.

        (ii)   The amount of Variable Rent shall be computed each calendar quarter and shall be paid by Lessee to Platform Owner on or before the fifteenth (15 ^th ) day of the month following the end of each calendar quarter. During the period in which the Base Minimum Monthly Fixed Rental is paid, the amount of Variable Rent to be paid shall be compared to the Base Minimum Monthly Fixed Rental that has been paid, with the excess amount paid to Platform Owner as provided in Section 4.1(a) above.

        (c)   METHOD FOR REVIEWING COMPUTATION OF RENT:

        i.      Within fifteen (15) days of the end of each calendar quarter, Lessee shall provide to Platform Owner an accounting, including delivery sheets, bills of lading and other documents as may be needed to show all LNG processing volumes for the previous calendar quarter. The information shall be in sufficient detail to allow the Platform Owner to review the computation of the Variable Rent provid