Agreement To Design And Construct New Facilities

AGREEMENT TO DESIGN AND CONSTRUCT NEW FACILITIES


This AGREEMENT, made this 15th day of March 1995, between COLUMBIA GAS TRANSMISSION CORPORATION ("Columbia"), and MARKWEST HYDROCARBON PARTNERS, LTD. ("Processor").


WHEREAS, Columbia and Processor will enter into a series of Agreements whereby Processor will: (1) design and construct processing facilities which will allow Processor to remove certain hydrocarbons from natural gas being shipped on Columbia's pipeline system: (2) demolish certain facilities now in existence on Columbia's real property; and, (3) ultimately purchase a portion of Columbia's real property.


NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and in the Purchase and Demolition Agreement - Construction Premises, Purchase and Demolition Agreement - Remaining Premises and Processing Agreement of even date herewith to be executed simultaneously herewith, the receipt and sufficiency of which is hereby acknowledged. Columbia and Processor agree as set forth below:


ARTICLE I. EXTENT OF CONTRACT


Processor agrees to furnish the engineering, design, procurement, fabrication, erection, commissioning, start-up services, equipment, materials, machinery, labor and any other items or services required for the construction, installation, start-up and operation of a natural gas liquids extraction facility ("Plant") on such portion of Columbia's 9.8 acre tract of land situate adjacent


to Columbia's Kenova Compressor Station, in Ceredo District, Wayne County, West Virginia, as is necessary to afford Processor ample area to construct the Plant ("Construction Premises"). Processor agrees to furnish acceptable industry practices, business administration and superintendence, and to otherwise complete the Plant in accordance with the terms of this Agreement and to meet the specifications in the Processing Agreement. Time is of the essence for the performance of this Agreement. The design, construction and start-up of the Plant must be completed, subject to the force majeure provisions contained herein in Article VIII, within 45 weeks following receipt of the later of all requisite FERC and any necessary Bankruptcy Court approvals and local, state or federal permits and completion of any environmental remediation agreed to by the parties, with 14 consecutive calendar day maximum downtime of the Kenova Extraction Plant allowable for the Commissioning Process of the Plant as set forth herein.


ARTICLE II. RESPONSIBILITIES OF PROCESSOR


2.1 (a) Processor shall be responsible for furnishing the design of the Plant.


(b) Processor shall be responsible for providing all utility services, except natural gas, necessary for the operation of the Plant, including but not limited to electrical service and any necessary water supply.


(c) Both the Plant inlet gas and residue gas piping shall contain an electrical insulation flange at the points Columbia delivers to and receives gas from Processor, capable of withstanding the design pressure of the Plant.

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The Plant shall have a corrosion protection system electrically isolated from Columbia's Kenova Compressor Station and any other facilities owned by Columbia. including without limitation, the remaining dehydration facilities of the Kenova Plant.


(d) The Plant shall meet all applicable federal, state, local and industry rules regulations, codes, standards, laws and ordinances. The Plant shall meet legally required emissions limits for noise and pollutants (air, water and any other), and shall meet all applicable federal, state and local environmental regulations governing the use and disposal of hazardous wastes, hazardous substances, pollutants and contaminants as they may be defined by the various federal, state and local environmental laws and regulations.


2.2 Prior to the construction of the Plant, Processor shall dismantle, demolish, remove and dispose of such portion of the existing Kenova Plant located on the Construction Premises which is necessary to provide ample area to construct the Plant and which is not necessary for the continued operation of the existing Kenova Plant. Prior to Processor beginning dismantlement, demolition, removal and disposal of the Operations Building which houses the Laboratory, Workshop, Warehouse, Boiler and Air Compressor Room, Locker/Wash Room Facility and Assembly Room, Processor shall be responsible for providing temporary facilities which will perform the function of the Operations Building to the extent required for the safe operation of the Kenova Plant.

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2.3 In conducting its activities hereunder, Processor shall (i) comply with any and all applicable local, state and/or federal laws, regulations, orders and agreements, including, but not limited to, those laws, regulations, orders and agreements directed at protecting the environment, (ii) obtain, from the governmental authorities having jurisdiction over the premises, such permits and approvals as may be required to lawfully conduct Processor's activities, including, without limitation, all permits and approvals required under local, state and/or federal environmental laws and regulations, and (iii) timely provide the governmental authorities having jurisdiction over the premises with all notifications required under applicable local, state and/or federal laws, regulations, orders and agreements.


2.4 (a) Processor shall provide, or cause to be provided, all construction supervision, inspection, labor, utilities, materials, tools, construction equipment and other services and items necessary for the completion of the Plant, together with the procurement and/or fabrication of all equipment, components and initial Plant charge materials required for the proper construction, installation and start-up of the Plant.


(b) Processor shall make all necessary tie-ins to the Kenova Plant during the time which the Kenova Plant is undergoing its annual maintenance or such time as is mutually agreed to between the parties hereto; provided, however, should the occurrence of the annual maintenance or other mutually agreeable times


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be at a time which will delay completion required under Article I, then the completion date will be correspondingly extended.


(c) Processor agrees to promptly apply for, diligently prosecute and obtain all requisite permits and approvals from and make all required notifications to governmental authorities having jurisdiction over the premises as may be necessary to design, construct, install, start-up and operate the Plant, including, without limitation, all necessary air permits, water permits and all other permits required under applicable local, state and federal laws and regulations.


(d) Processor will give all notices and comply with all applicable federal, state and local rules, regulations, codes, laws and ordinances, legally enacted at the date of execution of this Agreement, or thereafter during the course of the construction, installation, start-up and operation of the Plant.


2.5 (a) Processor shall notify Columbia when the Plant is ready for the running of a performance test. Processor shall commence that test within seven (7) consecutive calendar days following the notice and will give Columbia a further notice five (5) business days prior to the date the test will commence. The day the test commences shall be the day the Commissioning Process of the Plant begins


(b) Processor shall have complete responsibility for conducting performance tests to verify the proper functioning of the Plant, including the ability of the Plant to accept raw feedstock and perform its specified functions.

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Columbia shall have a right to attend all tests. Records of the performance tests shall be submitted by Processor to Columbia regardless of whether Columbia attends or does not attend the test.


(c) The Plant shall be deemed to have satisfactorily completed the performance tests when the Plant successfully comes on line from a "cold start", provides residue gas to the specifications agreed to in the Processing Agreement, adjusted as mutually agreeable for the available inlet gas conditions, for a continuous 48 hour period and completes an orderly, automatic shutdown. After the Plant successfully completes the performance test process, the Plant shall be deemed to have completed the Commissioning Process and be ready for Unrestricted Service. Processor and Columbia shall thereafter be required to comply with the terms of the Processing Agreement.


2.6 Processor covenants and agrees that it will rely solely on (1) Columbia's obligations under Section 7 of the Purchase and Demolition Agreement - -Construction Premises and (2) its own due-diligence investigation concerning the environmental condition and fitness of the property and its improvements for the construction and operation of a natural gas liquids extraction facility and not upon any representation, warranty or statement of or on behalf of Columbia by its officers, employees, agents, advisors or representatives.


ARTICLE III. RESPONSIBILITIES OF COLUMBIA

3.1 From and after the date of this Agreement until such time as Columbia transfers legal title to the Construction Premises to Processor, Columbia has and

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shall continue to afford to Processor and its representatives, during its normal business hours, reasonable access to the facilities and any non-privileged business records, files, maps, existing surveys, if any, describing physical characteristics, subsurface characteristics, environmental assessments zoning requirements and utility locations, the legal description of the Kenova Plant site, equipment data sheets and all other non-privileged records of Columbia connected with the Kenova Plant. Processor shall have the right to enter upon the Kenova Plant Premises for purposes of examining and inspecting the Kenova Plant and Plant site. Any documents provided to Processor hereunder shall be confidential and Processor shall use its best efforts, to the extent permitted by law, to preserve the confidentiality of such documents in any dispute with third parties. Notwiths ...