HomeMy WebLinkAboutC2024-054 - 3/26/2024 - Approved JC Elliott Amendment
To the LANDFILL GAS AND LEASE AGREEMENT dated May 11, 2023
between the City of Corpus Christi and Corpus Christi Renewables, LLC
This JC Elliott Landfill ("JCE")Amendment(the"JCE Amendment"), dated May 11, 2023(the"ICE
Effective Date"), is between the City of Corpus Christi, a Texas home-rule municipal corporation
("Landfill Owner"), and Corpus Christi Renewables, LLC,a Texas limited liability company("CCR"),
(collectively,the "Parties").
RECITALS
A. WHEREAS,the Parties have executed a Landfill Gas and Lease Agreement, dated May 11,
2023(the "Agreement").
B. WHEREAS,the Landfill Owner owns a landfill gas collection and control system at ICE(the
"JCE GCCS" as defined herein) through which the Landfill Owner collects and manages
Landfill Gas (as defined in the Agreement).
C. WHEREAS, CCR designs and operates Landfill Gas processing facilities,converting Landfill
Gas to High-BTU Gas(as defined in the Agreement).
D. WHEREAS, the Parties desire to amend the Agreement to have CCR gather landfill gas at
JCE ("JCE Landfill Gas"), transport it to CCR's Facilities (as defined in the Agreement), and
process such JCE Landfill Gas at CCR's Facilities, creating High-BTU Gas (as defined in the
Agreement)for sale.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein, the Parties
hereto agree as follows:
1. Unless defined herein, all capitalized terms used herein have the meaning defined in the
Agreement.
2. Unless modified herein,all provisions of the Agreement apply to this Amendment.
3. "JCE GCCS" means the JC Elliott Landfill gas gathering and control system located at 7001
Ayers Street,Corpus Christi,TX,78415,and comprised of the system of wells and piping that
collects or assists in the collection and destruction of Landfill Gas from ICE including, but not
limited to, extraction wells, horizontal wells, lateral and header piping, valves, sumps,
wellheads, air supply piping, liquid force-main piping, pumps, and other appurtenances,
blowers and motors, flares, air compressors, flow meters, flare facility controls, and any
monitoring and recording devices, Blower-Flare Facility, and Meters.
4. The ICE GCCS, including the pipeline constructed by the City to transport ICE Landfill Gas to
CCR's Facility, is part of the GCCS as defined in the Agreement.
SCANNED
5. "Landfill Owner's JCE Permits" means the following JCE permits.
a. "Landfill Owner's JCE Air Permit" means permit numbers issued by the TCEQ, as it
may be amended from time to time.
b. "Landfill Owner's JCE Solid Waste Permit" means permit number issued by the
TCEQ, as it may be amended from time to time.
6. Landfill Owner's JCE Permits are included as Landfill Owner's Permits as defined in
the Agreement.
7. "JCE Site" means the real property premises described in Exhibit A to this Amendment and
is included within the definition of"Site" in the Agreement.
8. Artlice 3.1 of the Agreement is modified as follows:
Article 3.1.1 is renumber as 3.1.1.1.
The following provision is added:
3.1.1.2. Landfill Owner shall transfer ownership of JCE Landfill Gas free of any and all
encumbrances, including all environmental attributes associated wit JCECC Landfill Gas, to
CCR at the JCE Connection Point in exchange for a royalty per Article IV, "Price, Royalties,
Billing and Payments" herein.
9. The first sentence of Article 3.4 of the Agreement is modified as follows:
The Landfill Owner grants CCR the exclusive right to treat, process, and sell all Landfill Gas
and all JCE Landfill Gas produced at the Landfill and at JCE, respectively.
10. Article 4 of the Agreement is modified, adding the following provisions:
4.2.1 Effective after the Commercial Operations Date, CCR shall pay the Landfill Owner a
royalty,from Gross Revenue received by CCR from the sale of High-BTU Gas, Environmental
Attributes, RINs and other credits.
The royalty paid to the Landfill Owner from gas originating from Cefe Valenzuela shall be
calculated according to the following equation:
(Gross Revenue) * (Cefe Methane Percentage) * (Cefe Royalty Percentage) = Cefe Royalty
payment.
The Cefe Royalty Percentage will be based on the price at which CCR sells High-BTU Gas, as
follows:
(i) At a High-BTU Gas sales price below$10.00 per MMBTU, the royalty is 10%.
(ii) At a High-BTU Gas sales price between $10.00 per MMBTU and $22.00 per MMBTU,
the royalty is 10.00% at $10.00 per MMBTU, increasing 0.01% for each $0.01 per
MMBTU increase in sale price, up to a maximum royalty of 22% at a High-BTU Gas
sales price of$22.00 per MMBTU.
At a High-BTU Gas sales price exceeding$22.00 per MMBTU, the royalty is 22%.
4.3.1. For JCE Landfill Gas routed to CCR's facility at Cefe Valenzuela("Cefe")for treatment and sale
as High-BTU Gas,CCR will pay the Landfill Owner a royalty as follows:
(i) For a period of twenty-four(24) months from the date CCR initiates the flow,treatment,
and sale of Landfill Gas as High BTU Gas from JCE, the JCE royalty percentage is zero.
(ii) Following the 24-month period, per 4.3.1.(i), the royalty paid to the Landfill Owner
will be determined each month as follows:
JCE Royalty Payment = (JCE Royalty Percentage) * (JCE Methane Percentage) * (Gross
Revenue)
JCE Royalty Percentage = average monthly flowrate (in SCFM) divided by 100 and
rounded to the nearest 0.1%, where the flowrate is measured at the JCE flow meter
downstream of the JCE landfill gas compressor
JCE Methane Percentage= (JCE Methane Production) / (JCE Methane Production + Cefe
Valenzuela Methane Production)
JCE Methane Production = (total JCE Landfill Gas flows (in SCF)) * (ICE Landfill Gas
methane concentration)
Cefe Methane Production = (total Cefe Valenzuela Landfill Gas flows (in SCF)) * (Cefe
Valenzuela Landfill Gas methane concentration)
Cefe Methane Percentage = 100% — JCE Methane Percentage OR (Cefe Valenzuela
Methane Production)/ (JCE Methane Production + Cefe Valenzuela Methane
Production).
For example, in the 25th month of JCE Landfill Gas production, assuming JCE flows an
average 1,000 SCFM at 55% methane, Cefe Valenzuela flows 2,000 SCFM at 56%
methane, High-BTU sales total 70,679 MMBtu, and the average total High-BTU gas sales
price is$25 per MMBtu,the following values are determined:
JCE Royalty Payment = (Gross Revenues) * (JCE Methane Percentage) * (JCE Royalty
Percentage) =($1,766,987) * (32.93%) * (10%)=$58,194
JCE Royalty Percentage= 1,000/100= 10.0%
JCE Methane Production = (1,000 SCFM) * (60 Min/Hr) * (24 Hr/Day) * (30 Days) * 55%
=23,760,000 SCF (This SCF value will be pulled directly from the flow meter each month)
Cefe Methane Production=(2,000 SCFM) * (60 Min/Hr) * (24 Hr/Day) * (30 Days)* 56%
=48,384,000 SCF (This SCF value will be pulled directly from the flow meter each month)
JCE Methane Percentage= (23,760,000)/(23,760,000+48,384,000) = 32.93%
Cefe Methane Percentage= 100%—32.93%=67.07%
In this scenario Cefe Royalty payment would be:
(Gross Revenues) * (Cefe Methane Percentage) * (Cefe Royalty Percentage) =
($1,766,987) * (67.07%) * (22%) =$260,709
11. Article 7.3.3.2. of the Agreement is modified, adding the following language after the
1"paragraph:
If CCR deems, in its sole and reasonable judgment, that it is not commercially feasible to
continue to operate at JCE, CCR may discontinue operations at ICE by providing 90 days
written notice to the Landfill Owner. All CCR responsibilities for the collection system
maintenance and operation will end after this 90-day period.
12. Article 8.1.1 of the Agreement is modified and renumbered as 8.1.1.1.
13.The following Article 8.1.1.2. is added after 8.1.1.1. in the Agreement:
Beginning at the JCE Effective Date and continuing until the end of the Term or earlier
Termination of this Agreement, the City does hereby lease to CCR the ICE Site solely for the
purposes of construction, installing, operating, and maintaining CCR's 10E Facility and
connecting ICE's Facility to the GCCS. CCR shall have sole and exclusive access to the JCE Site
except as otherwise provided in this Agreement.
14.The following Article 8.1.20. is added after 8.1.19 in the Agreement:
CCR will pay the City$1,776,795.29 to install the pipeline between Cefe and JCE. This cost will
cover the installation, all necessary right-of ways, and all other costs required to install the
pipeline except for the material cost. CCR will provide the material required at CCR's cost. The
City will own the pipeline and will charge CCR a fee of$0.20 per mcf for the operation of
the pipeline. The operation of the line will include all required compliance, one-
calls, and other tasks necessary to maintain compliance with all applicable
regulations/regulatory agencies.
The payment terms for the pipeline installation will be as follows:
• 25%due upon mobilization of the installation crew.
• 25%due upon 50%completion of the pipeline installation.
• 50% due upon final completion of the pipeline.
15.The responsibility table in Exhibit 3 and Exhibit 3A will also apply to the JCE project.
16.Article 2.1.4.1 will be added after 2.1.4.
Election to Utilize the City's Blower System(s). During the term of this contract CCR may
elect to utilize the city's blower systems to pull field vacuum and boost the gas pressure to
CCR's facility. If CCR makes this election CCR will give the city 5-day notice prior to utilizing
the blowers.After the 5-day period CCR will pay for the city's electric bill for the blower
station only, and the Exhibit 3 responsibility matrix will be replaced with Exhibit 3A. If, at a
later date, CCR no longer wishes to utilize the City's blower system to pull field vacuum
then CCR will notify the city. CCR will stop paying for the City's electric bill for the blower
system at the end of the electrical billing period during which the blowers stopped being
utilized by CCR and the responsibility matrix will default back to Exhibit 3. CCR can
separately elect to utilize the blower systems at Cefe Valenzuela and JCE.
Signatures on next page.
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed in
duplicate originals by their duly authorized,undersigned officers.
Corpus Christi Renewables, LLC,a Texas
limited liability company
By:
Nance: Paul D. Morrow
Title: President
Date: i/ (-Li (_ j:_'_-
City of Corpus Chri i
By: ( lAd
Name: NeimanF ng
Title:Assi anManager
Date: 3 ;L7 , ,
Approved as to legal form: bg701 09bZN
.01A/kt d„,ig,
Assistant City Attorney for
City Attorney Miles Risley
do‘ AUTHUKILLJ
ATTEST:
3rNc�� 3"a1o ' a
REB CCA HUERTA If-lib...6..
CITY SECRETARY SEGRFTAQV
"EXHIBIT A"TYPE IX LEASE TRACT
30,088 SQUARE FEET(0.6907 ACRES)
OUT OF A CALLED 157.579 ACRE TRACT,
LOT 6,SECTION 14,BOHEMIAN COLONY LANDS
NUECES COUNTY,TEXAS
Being a 30,088 square foot(0.6907 acre)tract of land situated in Nueces County,Texas and being a portion
of Lot 6,Section 14 of Bohemian Colony Lands,a plat recorded in Volume A,Page 48,Map Records,Nueces
County,Texas(M.R.N.C.T.)and being a portion of a called 157.579 acre tract of land described in a General
Warranty Deed to City of Corpus Christi, recorded in Volume 1413, Page 840, Deed Records, Nueces
County,Texas(D.R.N.C.T.)and being more particularly described as follows:
COMMENCING at a point in the northwest right-of-way(R.O.W.)line of Greenwood Drive(variable width
R.O.W.), in the southwest line of Lot 1, Section 15 of said Bohemian Colony Lands and a called 68 acre
tract of land described in a deed to City of Corpus Christi, recorded in Volume 770, Page 325, D.R.N.C.T.,
and for the east corner of Lot 2A,Section 15 of Bohemian Colony Lands, a replat recorded in Volume 36,
Page 23, M.R.N.C.T. and a called 14.273 acre tract of land described in a Special Warranty Deed to TM
Corpus Christi Services, L.L.C., recorded in Instrument No. 2002036560, Official Public Records, Nueces
County,Texas (0.P.R.N.C.T.),from which a concrete monument with brass disc found for reference bears
North 66°07'43" East a distance of 0.36 feet;
THENCE South 61°51'51"East(called South 61 1/2°East),along the common line of the northwest R.O.W.
line of said Greenwood Drive,Lot 1 and Lot 2 of said Section 15,and said 68 acre tract,passing at a distance
of 9.38 feet,a concrete monument found for reference,
continuing along said common line and over and across said Greenwood Drive, passing at a
distance of 40.00 feet, a point for the common corner of Lot 6 and Lot 7 of said Section 14 and Lot 1 and
Lot 2 of said Section 15 and for the south corner of said 68 acre tract,
continuing over and across said Greenwood Drive and along the common line of Lot 6 and Lot 7
of said Section 14, passing at a distance of 60.00 feet, a point in the southeast R.O.W. line of said
Greenwood Drive and for the southwest corner of a called 29.902 acre tract of land described in a
Warranty Deed to Ronald A. Voss, recorded in Instrument No. 2007063583, O.R.R.N.C.T, from which a
5/8"iron rod found for reference bears South 50°53'46" East a distance of 1.46 feet,
continuing along the common line of the southeast R.O.W. line of said Greenwood Drive, Lot 6
and Lot 7 of said Section 14,and said 29.902 acre tract for a total distance of 70.00 feet to a point for the
north corner of said 157.579 acre tract,from which a concrete monument found for reference bears North
86' 10'08"West a distance of 0.49 feet;
THENCE South 28° 38'09"West(called North 26° East),along the common line of the southeast R.O.W.
line of said Greenwood Drive and said 157.579 acre tract,a distance of 9.08 feet to a point;
THENCE over and across said 157.579 acre tract the following courses and distances:
Sheet 1 of 3
South 61°31'06" East,a distance of 78.00 feet to a 1/2"iron rod with yellow cap stamped"WCG"
set for the POINT OF BEGINNING,having surface coordinates of Northing:17,156,586.70,Easting:
1,321,540.19,relative to the Texas Coordinate System of 1983,South Zone, NAD83(2011)EPOCH
2010.00;
South 61°31'06"East,a distance of 175.00 feet to a 1/2"iron rod with yellow cap stamped"WCG"
set;
South 28° 28' 54" West, a distance of 125.00 feet to a 1/2" iron rod with yellow cap stamped
"WCG"set for the beginning of a tangent curve to the right,having a radius of 50.00 feet,a chord
bearing South 73°28' 54"West,and a chord distance of 70.71 feet;
Westerly, along said tangent curve to the right, through a central angle of 90° 00' 00" an arc
distance of 78.54 feet to a 1/2" iron rod with yellow cap stamped "WCG" set, having surface
coordinates of Northing: 17,156,373.27, Easting: 1,321,566.61, relative to the Texas Coordinate
System of 1983,South Zone, NAD83 (2011)EPOCH 2010.00,and for a point of tangency;
North 61° 31' 06" West, a distance of 125.00 feet to a 1/2" iron rod with yellow cap stamped
"WCG"set;
North 28° 28' 54" East, a distance of 175.00 feet to the POINT OF BEGINNING and containing
30,088 square feet(0.6907 acres), more or less.
SURVEY NOTES:
1. A survey exhibit of even date accompanies this description,shown on sheet 3 of this document.
2. Basis of Bearings: Grid North, relative to the Texas Coordinate System Of 1983, South Zone, NAD83
(2011) EPOCH 2010.00. Distances and coordinates shown hereon are surface in U.S. survey feet, to
convert to grid,multiply by the combined project scale factor of 0.9996001599.
3. This survey has been prepared based upon field observations performed on July 28, 2023 and
information provided by the client, if any, and was prepared without the benefit of a title commitment
and is subject to any easements or encumbrances not visible on the ground which might be identified in
a current title search.
4. Type IX Lease Tract corners described herein as "set" will be set by Weaver Consultants Group, LLC
within 30 days of issuing the signed survey.
OF
Weaver Consultants Group . q/Q' * 4p4a
6420 Southwest Blvd I Suite 206 }
• ANDREW J. WIDOLFF •
Fort Worth,TX 76109 t, :••••f
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817-735-9770 ` 1,,<teopeS8�0414
TBPLS REG#No. 10095400 • p S •»�"
TBPE REG#F-3727 •+ Pt -
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