This excerpt taken from the CF 8-K filed Oct 14, 2009.
Item 1.01 Entry into a Material Definitive Agreement.
On October 13, 2009, CF Industries Perú S.A.C. (CF Peru), an indirect wholly-owned subsidiary of CF Industries Holdings, Inc., entered into a Contract for the Supply of Gas (the GSA) with Pluspetrol Perú Corporation S.A., Pluspetrol Camisea S.A., Hunt Oil Company of Peru L.L.C., Sucursal del Perú, SK Energy, Sucursal Peruana, Tecpetrol del Perú S.A.C., Sonatrach Perú Corporation S.A.C., Repsol Exploración Perú and Sucursal del Perú (collectively, Sellers). CF Peru entered into the GSA in connection with its evaluation of the construction of a facility to produce nitrogen fertilizers in Peru (the Facility).
Subject to the satisfaction of certain conditions precedent, including the completion of the Facility and related gas pipeline and other infrastructure, the GSA provides for the purchase, on a take-or-pay basis, by CF Peru and the sale, on a deliver-or-pay basis, by Sellers of up to 99 million cubic feet per day of natural gas for use at the Facility to produce petrochemicals and generate electricity for use within the Facility. The purchase price for the natural gas used to produce petrochemicals at the Facility is based on an index price for urea. The purchase price for natural gas used to produce electricity for use within the Facility will be the applicable regulated rate for utilities. The term of the GSA runs through the 20 year anniversary of the date the Facility achieves commercial operation.
The GSA is subject to termination in certain circumstances, including by Sellers in the event that CF Peru fails to achieve certain milestones with respect to the construction and operation of the Facility, such as the Facility not achieving commercial operation by October 13, 2013 (subject to CF Perus right to extend such date up to October 13, 2017 upon payment of specified non-refundable cure amounts, with such amounts to be treated as prepayments for natural gas under the GSA in the event the Facility begins operations within the extension period).
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.