Fuel Supply Agreement (Example 1)

Region
Latin America and Caribbean
Publication Year
Jan,2003

Sector:

Energy

 

Name of Agreement:

Model Fuel Supply Agreement

 

Type of Agreement:

Fuel Supply Agreement

Part of a suite of model documents comprising also: 

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

 

Last Updated : Wed,2016-11-09