See the note below from Paul. The contract expires on Dec 31, 2002, and as advised by Hilda, Procaribe would need to provide a 90 days prior notice to extend it(Section 4.02 of the Tallaboa Pier Agreement),  if there is the need to do so under the Credit Agreement. This however would be a matter (hopefully) under Mirant's watch.

Coralina

 -----Original Message-----
From: 	Y'Barbo, Paul  
Sent:	Thursday, September 06, 2001 6:04 PM
To:	Rivera, Coralina
Cc:	Maltes, Miguel
Subject:	Tallaboa Pier Use and Maintenance Agreement


Coralina,

The above referenced document between The Puerto Rico Ports Authority and The Protane Corporation is due to expire December 31, 2002 (Section 4.01). ProCaribe and the owner of EcoElectrica will make a decision next year about whether or not to extend.

Note that the LPG Storage and Services Agreement between ProCaribe and Eco states in Section 23.2.1(c) that ProCaribe will exercise all renewal or extension options under the Tallaboa Pier Agreement for the life of the LPG Storage and Services Agreement. Eco may, however, request or consent to the termination of the Tallaboa Pier Agreement as outlined in Section 23.2.1(b). 

The Tallaboa Pier Agreement calls for ProCaribe and/or EcoElectrica to pay an annual fee of $200,000 plus escalation (Section 5.01). In return, ProCaribe and Eco receive First Preferential Use of the pier (Section 3.01 and 5.01) and do not pay dockage or wharfage (Section 5.01).

When the Eco deal was first put together, it was probably considered to be important that Eco have the First Preferential Use of the pier during Phase I of the project. It was expected that an LPG ship was going to be docked at Tallaboa Pier a large percentage of the time. As it turned out, there were no conflicts with other vessels as we are the only ones that have used the pier for the past few years. The pier could get other traffic in the future but that only matters if Eco is burning LPG. 

It would be interesting to know if the Credit Agreement requires Eco to maintain its First Preferential Use rights for the life of the PPOA. Since LPG is Eco's back-up fuel, there is a possibility that the banks are requiring it.  

Let me know if you need me to take this any further.


Paul