Fuel Supply Agreement (Example 1)

Sector:

Energy

Name of Agreement:

Model Fuel Supply Agreement

Type of Agreement:

Fuel Supply Agreement

Part of a suite of model documents comprising also: 

• Power Purchase Agreement (PPA),
• Model Implementation Agreement
• Land Lease Agreement

Prepared in connection with sector reform as a sample agreement for a country in South East Asia. 

Region (if known):

South East Asia

Year of Agreement/ Draft:

2003

Annotated by:

Victoria Delmon/ Mark Moseley (LEGPS)

Purpose and Context:

Agreement sets out terms on which Fuel Supplier is to provide Fuel to the Delivery Point at the Facility. To be used in conjunction with a PPA.

Circumstances where this contract may be appropriate:

Main Features:

• Fuel supplier to provide fuel to Delivery Point and the Facility (3).

• Title and risk pass at the Delivery Point (6).

• Independent Power Producer (IPP) Company to advise in advance a good faith best estimate for each year’s requirement for Fuel (7.1).

• IPP Company obliged to take delivery of Fuel – to pay liquidated damages equal to [10]% of cost of Fuel not taken (7.6.2(b)).

• Seller to pay liquidated damages to extent that Dependable Net Capacity is less than Rated Capacity (no cap on liquidated damages)(3.4)

• IPP Company to pay for Fuel at price published by [ ] (13.1)

• Force Majeure (FM) (14) – Events which materially and adversely affect performance of party of its obligations, provided that such effect could not have been prevented by diligence and reasonable care.

• FM events include non-performance by a counterparty relating to a Facility by reason of an event of event that could constitute FM under this Agreement (therefore important to ensure that the different FM provisions are similar in each agreement).

• Consequences of FM – Affected Party excused from performance.

• Dispute resolution (17) - Resolution in good faith by parties. Other disputes, or where expert fails to make a determination, to Arbitration under [UNCITRAL] rules [the arbitration panels for all the contracts of the project should probably be the same].

Possible additional provisions that it might be appropriate to include:

Provisions that may not be advisable to replicate/ may need further thought:

Provisions of wider general use:

Experience Since Coming Into Force (including any amendments)/ if draft form, whether it has been applied:

N/A

Tracking Number:

Energyfuelsupply1