Capacity Allocation Mechanism for Licensed Petroleum Storage Facilities

Transnet Pipelines Tarlton Facility (c/o Rustenburg and Ventersdorp Road, Tarlton, Krugersdorp)

(License Number PPL.sf.F3/19/2006)

Revision date: December 2012

Commercial in Confidence

TABLE OF CONTENTS

1. INTRODUCTORY TERMS AND CONDITIONS ...... 1 1.1 Petroleum Storage Facility ...... 1 1.2 Pipeline Access ...... 2 1.3 Uncommitted Capacity ...... 2

2. TARIFFS ...... 3

3. CONTRACTUAL TERMS AND CONDITIONS OF USE ...... 4 3.1 Storage Capacity ...... 4 3.2 Scheduling and Planning ...... 5 3.3 Custody of Petroleum ...... 6 3.4 Product Dispatch ...... 7 3.5 Petroleum Type and Quality Control ...... 8 3.6 Slops Management ...... 9

4. TERMS AND CONDITIONS OF PAYMENT ...... 10 4.1 General ...... 10 4.2 Invoicing ...... 10 4.3 Account Suspension ...... 11

5. TECHNICAL REQUIREMENT FOR ACCESS TO STORAGE FACILITIES ...... 12

6. PROCESS TO BE FOLLOWED TO REQUEST ACCESS ...... 13 6.1 Pre-Requisite ...... 13 6.2 Existing Clients ...... 14 6.3 Prospective Clients ...... 15

This document contains proprietary information and intellectual property, and may not be disclosed, used or reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronically, mechanically, photocopying, recording, or otherwise without the prior written permission of Transnet.

This document and the contents thereof may not be used by any other party for sourcing of competitive proposals, as a basis for performing the work described herein, or for any other commercial purpose, without the prior written permission of Transnet.

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1. INTRODUCTORY TERMS AND CONDITIONS

1.1 Storage Facility

1.1.1 Transnet Pipelines (the Licensee) operates a licensed Petroleum Storage Facility at Tarlton (corner Rustenburg and Ventersdorp Road, Tarlton, Krugersdorp – license number PPL.sf.F3/19/2006) – herein referred to as the “Petroleum Storage Facility”.

1.1.2 The Petroleum Storage Facility is an extension of Transnet Pipeline’s national pipeline network and is essentially used for the distribution of liquid fuel products and to enable the efficient operation of the pipeline between Durban and Johannesburg. Products can be stored at this facility for a limited period only (refer below to Chapter 2 – Tariffs, for the applicable NERSA approved storage tariffs)

1.1.3 Transnet Pipelines owns and operates a number of storage tanks at the Petroleum Storage Facility. These tanks allow for a limited storage period to facilitate the efficient handling of petroleum products prior to transfer to road or rail.

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1.2 Pipeline Access

1.2.1 The Petroleum Storage Facility receives all fuel products exclusively via pipeline delivery.

1.2.1 Any client who wishes to make use of the Petroleum Storage Facility for petroleum storage of their fuel products requires pipeline access as a pre-requisite for their participation at the Petroleum Storage Facility. The criteria/guidelines to gain access to the pipeline are as per ANNEXURE M herein.

1.2.2 Pipeline access may be by means of a contractual agreement directly between the client and Transnet Pipelines (Conveyance Agreement) or by means of a contract with a host company who has a contractual agreement with Transnet Pipelines for the delivery of liquid fuel product to the Tarlton Petroleum Storage Facility.

1.2.3 The terms and conditions of use - the service fees, tariffs and the process to follow for establishing such a contractual agreement with Transnet Pipelines falls outside the scope of this allocation mechanism. The criteria/guidelines to gain access to the pipeline are as per ANNEXURE M herein.

1.3 Uncommitted Capacity

1.3.1 Uncommitted capacity in the context of this document refers to the “throughput capacity” and not to “storage capacity”. The Petroleum Storage Facility offers storage for a limited period only.

1.3.2 Clients may use this allocation mechanism as a guideline for the allocation of petroleum storage at the Tarlton facility. The document stipulates: i. A tariff schedule ii. The contractual terms and conditions for use of the facility iii. Contractual terms and condition for payment iv. Access to the Petroleum Storage Facility, and v. The process to follow to request access (Annexure L)

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2. TARIFFS

2.1.1 The table below lists the currently NERSA approved tariffs for the Tarlton Petroleum Storage Facility.

Tariffs as Approved by NERSA for the Tarlton Petroleum Storage Facility Tariffs (c/l) 2011/12 2012/13 1 – 7 days 7.72 8.31 8 – 14 days 11.59 12.47 12 – 21 days 23.27 24.93 22 – 31 days 34.56 37.40

2.1.2 All Tariffs shown above excludes VAT. (VAT will be charged on invoice)

2.1.3 The 2011/12 tariffs are effective until 31st March 2012 where after the 2012/13 tariffs will apply

2.1.4 Transnet Pipelines will review these tariffs from time to time and apply for a revised tariff from the National Energy Regulator (NERSA), according the process prescribed by NERSA

2.1.5 On approval of a revised tariff structure, the revised tariff will be communicated to all clients in writing, it will be available from the Licensee on request and will be published on the energy regulator’s website (http://www.nersa.org.za)

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3. CONTRACTUAL TERMS AND CONDITIONS OF USE 3.1 Storage Capacity

3.1.1 The Petroleum Storage Facility currently offers 28,600 m3 of workable capacity as in the table below. The capacity per product grade is 11,200 m3 for 500 ppm Diesel and 17,400 m3 for 93 Octane Unleaded Petrol.

Tank Tank Volume Unpumpable 5% Total Working No Capacity in below Volume of Tank Transnet Capacity Litres Striker Plate Capacity in Litres Pipeline m3 Stock holding Diesel 500 A1 6,017,586 40,495 300,879 Total 5,600 A2 5,995,779 41,862 299,789 600,668 5,600 93 ULP A3 5,188,388 34,605 259,419 4,700 A4 5,187,293 35,516 259,365 4,700 A5 3.575,906 39,246 178,795 3,200 Total A6 3,568,770 30,492 178,439 3,200 966,953 A7 462,693 8,413 23,135 400 A8 460,129 7,711 23,006 400 A9 895,886 12,180 44,794 800

3.1.2 The assignment of product grades to tanks may change according to requirements.

3.1.3 The Licensee owns all unpumpable - or dead stock in all product tanks.

3.1.4 The Client is not allocated segregated storage capacity. Each Client is allocated a certain throughput volume according to the agreements entered into with Licensee. The amount of volume in tank per product per client will vary over time according to the volume of product received and dispatched by the client.

3.1.5 A receiving tank’s volume is measured for quantity assurance purposes by dipping before and after each delivery. Dip volume measurements are compensated for differences in temperature or density through volume conversion tables.

3.1.6 The exact volume delivered is measured electronically. The Petroleum Storage Facility makes use of turbine flow meters, one for each product. A meter prover upstream of the flow-meter proves the volume delivered. The meter prover is calibrated for accuracy once every two years. The latest certificate of calibration is included in Annexure C.

3.1.7 All measurements occur at standard temperature and pressure (20 °C, 101.325 kPa). The metering software compensates for differences in ambient temperature, atmospheric pressure and density when registering the volume measurement.

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3.1.8 The meter printed receipt (refer Annexure D) is deemed binding of the volume received. Should a dispute arise, or a fault with the metering equipment be suspected, the manual dipping measurements above will be agreed upon by the parties and used.

3.2 Scheduling and Planning

3.2.1 The Petroleum Storage Facility keeps detailed stock progression records. Each client’s allocated throughput volume is updated daily on product receipts and product dispatches to keep track of the volume of each product in tank allocated to each client.

3.2.2 Clients are required to remove their product from the facilities within 7 days following official notification by the Licensee that the product has arrived at the facility.

3.2.3 Failure to move product within the prescribed period above will incur a penalty per litre of product as stipulated in the tariff schedule (refer chapter 2)

3.2.4 The client is responsible for all pipeline product receipt schedules and capacity planning according to the terms and conditions as stipulated in their agreement with Transnet Pipelines or their Host Company. This includes all indicative and firm order planning (refer Annexure A for an example).

3.2.5 Transnet Pipelines will issue the Petroleum Storage Facility with an Operations Notice of all planned deliveries one week in advance (see Annexure C for an extract of an Operations Notice). The Operations Notice contains all relevant information on all planned product receipts – source, Client, product, size of product delivery, exact time delivery will start, duration of delivery.

3.2.6 The Petroleum Storage Facility will monitor its ability to take receipt of a client’s product by pipeline. Should it be unable to take receipt of a product delivery, the necessary remedial actions as stipulated in the Client’s agreement with Transnet Pipelines for product deliveries and the necessary fees as applicable (Transnet Pipeline Service Fees) will be applicable. The remedial actions to be taken and fees applicable in such a case forms part of the Client’s contractual agreement with Transnet Pipelines and falls outside the scope of this allocation mechanism.

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3.3 Custody of Petroleum

3.3.1 Custody of all petroleum products transfers to the Licensee the moment that the product passes from the pipeline through the turbine flow meters into the Storage Facility.

3.3.2 Custody of petroleum products transfers to the Client the moment the product flows through the dispatch flow meters for road and rail dispatches.

3.3.3 Any loss of product, or deterioration of product quality due to incorrect operation of equipment or leakage or faulty equipment or faulty maintenance of equipment or theft or fire, etc. that the Licensee experiences for any product that it has custody of has to be replaced to the Client at the Licensee’s expense.

3.3.4 Any loss of product, or deterioration of product quality due to incorrect operation of equipment, by the Client’s operator, or leakage or faulty equipment or faulty maintenance of equipment or theft or fire, etc. of all product after it passed through the dispatch meters, thus in the custody of the Client is the Client’s responsibility.

3.3.5 A detailed investigation of each incident will follow in which both the licensee and client will be involved to determine any additional claims or remedial actions to be taken by either party for each incident as the incident may require.

3.3.6 The Licensee will perform a three monthly product reconciliation to determine any surpluses or losses or product.

3.3.7 Product gains will be prorated to clients according to each client’s throughput.

3.3.8 Product losses will be paid to the Client.

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3.4 Product Dispatch

3.4.1 Product is dispatched from the Licensee’s Storage Facility by road or rail.

3.4.2 All road orders are to be confirmed at least 24 hours in advance and the necessary documentation lodged with Licensee’s representative. After the 24-hour deadline, orders may be cancelled, but no new orders may be entered.

3.4.3 The Client’s transporters are allowed between 06h:00 and 22h:00. Transporters are matched with orders received. Where there is no transporter for the applicable order, the order is automatically cancelled.

3.4.4 The Petroleum Storage Facility dispatches product by rail to Botswana.

3.4.5 All orders for rail dispatches (next week’s business) are to be lodged and the necessary documentation submitted with the Licensee’s representative by the Friday afternoon at 17h00 for the week starting the Monday after the following Monday, that is the Friday a week before.

3.4.6 The Licensee is able to load a maximum of 36 rail tank cars per day, of which 18 are Diesel and 18 are ULP.

3.4.7 Rail orders are allocated to rail tank cars according to Client orders for rail transport as far as possible. Where more next week’s business rail orders are received than available rail tank cars, the next week business’ orders are allocated by the Licensee pro rata the Client’s orders received.

3.4.8 Required rail tank cars are finalised, order numbers assigned and the orders for rail tank cars sent to Transnet Freight Rail (TFR) for wagon allocation by Tuesday at 17h00.

3.4.9 TFR will allocate available wagons, assign consignment numbers to the rail tank cars according to the order numbers received and confirm consignment numbers with matched order numbers with Licensee’s representative.

3.4.10 On arrival at the rail yard, consignment numbers and order numbers allocated to rail tank cars are matched to the Licensee’s records before the rail tank cars are shunted and loaded. The Client’s dispatched volume is updated with the actual loaded.

3.4.11 A Client may cancel any pending rail order up until the Wednesday at 17h00 of the week before. The necessary documentation, stating the reason for the cancellation needs to be submitted with the cancellation.

3.4.12 Licensee will attempt to match cancelled wagons to orders from the remaining Clients on a pro rata basis if uncommitted orders are available.

3.4.13 All penalties in terms of cancellation of orders are compensated for in terms of the impact it will have on a client’s ability to move their product within the Commercial in Confidence. Page 7

prescribed period. Should a client fail to move their product within the prescribed period (see 3.2.2), a higher tariff will apply.

3.5 Petroleum Type and Quality Control

3.5.1 All petroleum must adhere to South African National Standards (SANS), specifically: i. ULP 93 in accordance with SANS 1598: 2006 (metal free) ii. LSD in accordance with SANS 342: 2006.

3.5.2 Product samples are taken hourly during a pipeline delivery and analysed at Licensee’s laboratory on site. The tests performed are i. Temperature, ii. Density, iii. Final Boiling Point, iv. Flash Point and v. X-Ray for Metal Content

3.5.3 The Licensee will perform the following tests as minimum quality requirement: PRODUCT MINIMUM QUALITY REQUIREMENTS PRODUCT NAME and PROPERTY UNITS LIMITS CODE Colour Straw Straw Density @ 20ºC kg / litre 0,800 minimum 62 min at Intake & 55 min at Flash point @ 101,325 º C Delivery (62 at KRO and Automotive Diesel (Diesel) kPa KPR) Haze Rating Number 2 max mg / litre Sulphur content 500 ppm max (ppm) Colour Yellow Yellow Density @ 20ºC kg / litre 0,710 to 0,785 Octane Rating N/A 93 210 max at intake and 213 Final Boiling Point º C max at delivery 93 Unleaded Petrol (ULP 93) Residue Ml 2,0ml max

Haze Rating Number 2 max mg / litre Lead Content 13 ppm max (ppm) Sulphur Ppm 500 max Manganese Ppm 2 max

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3.5.4 After delivery, a representative sample of the tank content is taken for analysis.

3.5.5 Samples are kept for 30 days.

3.5.6 If during a product injection analysis indicates that the product is off- specification, the following process is followed i. The pipeline operator is informed immediately and injection of the product is stopped ii. The relevant product tank is measured for volume content and a representative sample is taken iii. The representative sample is analysed and if off-specification the Client and his supplier of the product is contacted iv. An investigation will be launched to determine liability, if the Client is found liable the Client will direct Licensee as to where to route the product in the tank. v. If the Licensee is at fault, it will direct the product as it sees fit and will replace any lost volume to all clients as negotiated on a per client basis.

3.6 Slops Management

3.6.1 The Licensee takes possession of all slops the moment it enters the Storage Facility.

3.6.2 Licensee may re-process the slop at its re-processing facilities to the lowest degradable specification relevant to the product type.

3.6.3 The reprocessed product will be disposed by one of the following methods i. Blending it back into delivered products to product specifications, at an allowable blend rate agreed by all relevant authorities, according to the pipeline operator’s standard operating procedure for blending ii. In a market for un-resolvable reprocessed Intermixture

3.6.4 The table below indicated the current permissible blend ratio Blend Table Product Diesel Diesel ULP ULP 95 500ppm 50ppm 93 Name Diesel – 500ppm - 1.0 0.25 0.2 Diesel – 50ppm 0 - 0.25 0.25 Jet A1 0 0 0 0 ULP 93 0.25 0.25 - 5.0 LRP 93 0.25 0.25 2.0 2.0 ULP 95 0.25 0.25 0.25 -

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4. TERMS AND CONDITIONS OF PAYMENT

4.1 General

4.1.1 All clients must apply for credit using the Standard Credit Application for Transnet Pipelines. This application is part of the application process considered in Chapter 6.

4.1.2 Unless otherwise agreed between duly authorized representatives of the Client and the Licensee respectively, the terms of payment to Licensee shall be by means of electronic funds transfer (EFT) into Licensee’s Bank Account

4.2 Invoicing

4.2.1 The Licensee generates a weekly tax invoice for each client, which will serve as an account for services rendered including other amounts due to Licensee by the Client such as interest charges. The weekly tax invoices will be the:

i) VAT invoice; and

ii) Proof of the VAT payable.

4.2.2 At the end of the calendar month, the Licensee will make print outs of all weekly invoices and generate a statement for each client. The paper invoices and statement will be couriered to each client at month end.

4.2.3 All outstanding amounts debited to the Client’s account must be paid within 25 days, on or before the 25th day of the month following the date of statement. Payments must be made into such account as Licensee may from time to time notify the Client. When the 25th day is not a Business Day payment is required on the last Business Day prior to the 25th day following the date of statement.

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4.3 Account Suspension

4.3.1 If the Client has made no payment for outstanding debt or no alternative arrangements are made within three working days after notification by the Licensee then the credit account will be suspended.

4.3.2 The Licensee shall inform the Client both telephonically and in writing of the suspension of their account and that no dispatch orders can be processed while the account is suspended.

4.3.3 Should a Client wish to re-activate their suspended account they must make a payment directly into the Licensee’s bank account and fax or email through a remittance advice.

4.3.4 Once the payment has been verified the Client is to re-perform the credit application (extension) process.

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5. TECHNICAL REQUIREMENT FOR ACCESS TO STORAGE FACILITIES

5.1.1 Any transporter (road or rail) that enters Licensee’s premises has to be in possession of a Safe Loading Pass (SAF), which is valid for one year.

5.1.2 If the transporter is not in possession of a SAF, it may complete an application form to be certified accordingly. [Tarlton Road / Rail: New Road Haulage / Rail Tank Registration Form, Document Number OPS-FORM-020, Annexure E].

5.1.3 On successfully passing the inspection, the transporter will be issued with the relevant SAF, valid for one year, after which the registration process will be repeated.

5.1.4 All Bulk Vehicle Operators has to undergo training in the following Unit Standard (see Annexure F): The National Certificate in Professional Driving: Convey Dangerous Goods (In terms if Chapter VIII – Regulation 280 of The National Road Traffic Act 93 of 1996) Theoretical and Practical Course, Unit Standard 123259: Comply with Legal docs, Apply Safety Standards, Fire Fighting and Professional Equipment.

5.1.5 Bulk Vehicle Operators entering Licensee’s facility need to have undergone the “Contractor Employee SHE Induction”. (Refer Annexure G). The induction is offered on site.

5.1.6 Road Transporters have to present the following information to gain entry into Licensee facilities: i. Transporter: Safe Loading Pass ii. Transporter: Transport Permit – Storage, Use and Handling of Flammable Liquids and Substances, issued by Local Municipality (Annexure H) iii. Transporter: Pressure Test Certificate (Annexure I) iv. Transporter: Motor Vehicle License and Roadworthy Certificate v. Transporter: Tarlton Road Haulage Vehicle Pre-Entry Inspection [OPS- DISTLIST-001, Annexure J] vi. Bulk Vehicle Operator: Training Certificate as contemplated above vii. Bulk Vehicle Operator: Contractor Employee SHE Induction viii. Bulk Vehicle Operator: Driver’s License and certified copy of Identity Document

5.1.7 Documentation requirements for rail Transporters: i. Safe Loading Pass ii. Pressure Test Certificate iii. The necessary consignment documentation

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6. PROCESS TO BE FOLLOWED TO REQUEST ACCESS

6.1 Pre-Requisite

6.1.1 Any client who wishes to make use of the Petroleum Storage Facility must have access to the Transnet Pipeline network for delivery of product to the Petroleum Storage Facility. The criteria/guideline’s to gain access to the pipeline are as per ANNEXURE M herein.

6.1.2

6.1.3 The application process for access to the pipeline falls outside the scope of this guideline. The client has to engage with Transnet Pipelines directly re the necessary process to follow.

6.1.4 In the event of prospective clients not having direct access to the pipeline but making use of a Host company, prospective clients must make the agreement with their Host Company for pipeline deliveries available with their application.

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6.2 Existing Clients

6.2.1 It is advised that all clients wishing to engage with Transnet Pipelines for allocation of uncommitted capacity at the Tarlton Petroleum Storage Facility engage electronically via email with the Transnet Pipelines Commercial Manager: Operations, Transnet Pipelines prior to applying through the official channels.

6.2.2 Existing clients should submit:

i. A 12-month forecast of additional volume movement by road per product and per destination

ii. A 12-month forecast of additional volume movement by rail per product and per destination

iii. A 12-month forecast of volume intake into the Petroleum Storage Facility by pipeline

iv. A motivation as to why they require additional capacity

v. Any other information that may assist Transnet Pipelines to gauge the client’s additional throughput volume requirements

6.2.3 The Commercial Manager: Operations, Transnet Pipelines will advise the client as to any additional information that may be required.

6.2.4 Once all documentation has been received the Commercial Manager: Operations, Transnet Pipelines will review the application and provide feedback to the client within 14 days of receiving the application for an extension of the client’s throughput volume.

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6.3 Prospective Clients

6.3.1 It is advised that all clients wishing to engage with Transnet Pipelines for allocation of uncommitted capacity at the Tarlton Petroleum Storage Facility engage electronically via email with the Transnet Pipelines Commercial Manager: Operations, Transnet Pipelines prior to applying through the official channels.

6.3.2 All clients seeking to utilise the Petroleum Storage Facility must be registered as a Wholesaler of Petroleum Products as required by the Petroleum Pipelines Act, 1977 (Act No. 120 of 1977)

6.3.3 Prospective clients should submit:

vi. A 12-month forecast of volume movement by road per product and per destination

vii. A 12-month forecast of volume movement by rail per product and per destination

viii. A 12-month forecast of volume intake into the Petroleum Storage Facility by pipeline

ix. Any other information that may assist Transnet Pipelines to gauge the client’s throughput volume requirements

6.3.4 The Commercial Manager: Operations, Transnet Pipelines will advise the client as to any additional information that may be required.

6.3.5 The Client should complete the Standard Credit Application Form (Transnet Pipelines) – see Annexure K.

6.3.6 Annexure K, page 2 lists all the supportive documents that should be submitted with the application form.

6.3.7 Original copies of the Credit Application Form together with all the supportive documentation as well as all the commercial information contemplated above (6.3.3 and 6.3.4) are to be submitted in a sealed envelope, attention the Commercial Manager: Operations, Transnet Pipelines, either by mail to

Transnet Pipelines, PO Box 3113, Durban, 4000;

or by hand to Transnet Pipelines, 202 Anton Lembede Street, Durban, 4001

6.3.8 The Commercial Manager: Operations, Transnet Pipelines will review the application and inform the prospective client on any additional information required.

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6.3.9 Once all information has been received, the Client will be issued with a letter stating that Transnet Pipelines had received the application and all supportive information.

6.3.10 The Client will receive feedback from Transnet Pipelines re the status of its application within 30 days from the date of the letter above confirming receipt of the application and all supporting documentation.

6.3.11 Based on the information received, Transnet Pipelines will perform a credit risk analysis on the Prospective Client to determine whether its financial performance meets the required financial criteria.

6.3.12 Transnet Pipelines will perform an external credit assessment on the Prospective Client credit profile; the Prospective Client must provide a letter granting Transnet Pipelines the authority to do so.

6.3.13 Dependent on the results of the Prospective Client’s credit analysis, a Bank Guarantee, the value of which will be determined by Transnet Pipelines, may have to be provided by the Prospective Client. (The format of the Bank Guarantee will be provided by Transnet Pipelines)

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ANNEXURES

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1. FORECASTS, NOMINATION AND SCHEDULING Forecasts Shipper shall provide the Carrier with Indicative Nomination forecast volumes for three month as detailed in the SHIPPER MANUAL, Section 7: Nominations and Scheduling Sequence of Events. Shipper shall provide, on request from the Carrier, a bi-annual forecast of intended volumes to be transported in the Main Pipeline. The forecast data shall include Product grade, Intake Point, Delivery Point and volume per year. The Shipper shall ensure that the Carrier is informed of relevant plans for maintenance, tests, shut-down, temporary periods of decreased/increased intake or deliveries and the time and duration for such events, as soon as such information is available. The Carrier shall inform the Shipper of programmes for planned maintenance, shut-downs, tests and any other activities related to the Main Pipeline Network which could affect the Intake Point availability and/or the Delivery Point availability or otherwise influence delivery Shipper’s product. Nomination and Scheduling Shippers desiring to inject Product shall furnish Nominations and receive, after Carrier completed Scheduling, Operations Notices for use of the Shippers Entitled Capacity according to the process, criteria and method described in the SHIPPER MANUAL, Section 7, Nomination and Scheduling. The scheduled time and location for Product Intake and Delivery will be determined by Carrier's transportation and Delivery obligations to its Shippers and by the necessity of economical use and efficient operation of Carrier's facilities. Carrier will assume no liability for its inability to maintain schedules or comply with Shipper's Delivery requests when caused by operational or scheduling problems, excess demand, delays and other problems encountered in pipeline operations. Product will be accepted for Intake during the Nominated Intake Cycle subject to the successful scheduling of the Nomination. The scheduled lead time between Intake and Delivery could be up to 21 days. The Carrier will determine the number of scheduled Deliveries per Nomination (Supplier, Product, Delivery Point, Consignee, Cycle), unless otherwise agreed the standard will be one Delivery per Cycle.

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Carrier may schedule Product to be delivered any time during the Delivery Cycle and the interval between deliveries will not necessarily be 7 days. Scheduling of an Intake of Product from Accumulator tanks will be subject to rules in Section 13, Minimum Order and Batch Size. Product in the MPP Pipeline will be fungible as stated in Section 19, Product Specifications. Carrier may substitute and deliver Product of the same specification as the Product shipped with product from different Sources.

1.1 Nomination and Scheduling Sequence of Events

1) Consignees shall enter 3 months Indicative Orders forecast on the Carrier’s ERP Portal. 2) Firm Monthly Orders are entered by the 25th of the month before Intake takes place. Suppliers and Shippers shall review these orders to verify that is within the volumes agreed between Consignee, Shipper and Supplier.** 3) The Consignee edits the Firm Weekly Orders on a Tuesday and submits before 14:00 for the following week’s Intakes.* 4) If the Consignee is not the same Party as the Shipper or Supplier the Consignee must submit the Nominations before 12:00 on a Tuesday, Shipper should then check the Nominations and submit to the Carrier before 14:00 on the Tuesday.* 5) The Carrier checks the Nomination against allocated and available capacity. 6) The SAP Portal does not allow users to enter Nomination Volumes greater than their Entitled Capacity. If Shipper’s total of the submitted Nomination volumes is equal to the Shippers entitled capacity the Carrier’s will inform the Shippers if additional capacity is available. The Shipper will be allowed, if the Carrier increases the Entitled Capacity setting in the SAP Portal temporarily, to increase the Nomination volume if agreed with the Carrier. 7) If Shipper’s total of the submitted Nomination volume is less than Shipper’s Entitled Capacity, the available capacity will be offered to other Shippers. 8) Only Consignees will be allowed enter Nominations on the SAP Portal, Consignors/Shippers and Suppliers can approve submitted Nominations.

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9) The Carrier will schedule the Intake to meet nominated demand. Scheduling for Intakes during the following week will be completed by close of business on the Thursday.* 10) After the weekly scheduling is completed on the Thursday an Operations Notice is generated and distributed to Shippers and Intake and Delivery Point operating staff. The Operations Notice contains scheduled Intakes and Deliveries information for the next 10 days until the end of the next Cycle. 11) Training on interpretation of the Operations Notice including slug numbers will be provided on acceptance of new Shippers. 12) The Carrier will issue updated daily Operations Notices on Mondays, Tuesdays and Fridays after schedules have been updated.

* Cut of times for submission of monthly and weekly Nominations specified above are relevant for normal working weeks, Carrier may inform the Shipper of changes to these dates for a specific cycle if there are events such as public holidays that influence the normal working days of a week.

* * The Supplier in the SAP Portal is the Party that will be instructed to physically inject product .i.e. Back to back supply arrangements are not accommodated in the SAP Portal. 1.2 Criteria for Acceptance of Nominations 1) Minimum Order Size a) See Section 13

2) Nomination Submission On-Time a) Unless otherwise specified by the Carrier, weekly Nominations agreed by Shippers and Suppliers, should be submitted before 14:00 on Tuesdays of the Cycle prior to the Cycle that the Product is required to be injected into the Main Pipeline.

3) Valid Intake Point and Delivery Point a) The Intake Point and Delivery Point should be on a valid schedulable route. See Section 6.

4) Within Agreed Capacity Entitlement Limits

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a) A valid Agreement should be in place with the Carrier and nominated volumes should be within the agreed limits.

5) Ability to Receive Deliveries a) Delivery facilities should have sufficient tank capacity to take the Delivery in one Slug.

6) Shipper Should Have Clearance from Finance Department

1.3 Nominations Method – Carrier’s Ordering Partal Interface

1.3.1 All Parties shall use Carrier’s ERP Ordering Portal to enter, submit and amend Nominations. 1.3.2 The SAP Portal can be accessed through the internet. 1.3.3 Training on the use of the Portal will be provided by the Carrier upon acceptance of new Shippers and for new users of existing Shippers. 1.3.4 Existing Shippers shall ensure that new users are versed in the processes, concepts and terminology used in daily pipeline related business before the users are sent for SAP PORTAL training. 1.3.5 A user will be registered to use the SAP Portal after receiving the training. 1.3.6 Users may only use their own User ID and password to log on to the SAP Portal system. 1.3.7 Users must ensure that they have alternative/backup access to the internet if their corporate connection or 3G connection is down. Internet connectivity issues will not be accepted as an excuse for late submission of Nominations. 1.3.8 If a user can access the internet but cannot access the SAP PORTAL the Carrier must be informed immediately.

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RE-CONSIGNMENT AND AMENDMENDS TO ORDERS

In the event Shipper or its Consignee does not have adequate facilities available to receive Products from the Main Pipeline, at the time, any Slug or portion thereof arrives at a Delivery Point to which it is consigned and cause the Main Pipeline flow rate to be slowed down or stopped, the Shipper may levy a Charge as detailed in Section 27.

Re-consignment by Carrier

In the event Shipper or its Consignee does not have adequate facilities available to receive Products from the Main Pipeline without delay, at the time, any Slug or portion thereof arrives at a Delivery Point to which it is consigned, Carrier may: 1) If the product cannot be delivered within 5 hours, re-consign said Slug or any undelivered portion thereof to a Delivery Point where facilities are available to receive it and Carrier shall not be liable for any of the following which may occur by reason of such re- consignment: a) damage, b) loss in transit, c) or loss in storage, d) loss in profit 2) Such Re-consignment shall have the same effect as though requested by Shipper and Shipper shall be instructed by the Carrier to request the amendment as per agreed procedure. 3) Shipper shall pay transportation charges from Intake Point to actual final Delivery Points as well as any additional costs that the Carrier incurs during the Re-consignment.

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Requested Amendment by Shipper Provided that it is operationally feasible - Shipper may, on agreed procedure of Amendment to Order, request to the Carrier, and subject to operating conditions of the facilities of the Carriers, allow a Shipper to amend: 1) Delivery Point and Nominated Volume for Delivery, 2) the Consignee designated to take Delivery of the Shippers Products.

The Carrier shall use reasonable endeavours to meet such request. A Nomination that is submitted after the cut-off time described in Section 7.2 shall be regarded as an Amendment. Shipper shall request Amendment to Orders as detailed in SHIPPER MANUAL, Section 8, and Amendment to Orders. Service Fees for Amendments may be levied as detailed in Section 27.

1.4 Amendment to Orders Process 1) The Consignee (on behalf of the Shipper) shall request the Amendment verbally, and send an accompanying e-mail with the Amendment request details. 2) The Carrier will confirm verbally and by e-mail that the Amendment cannot be accommodated or that it will be accepted once entered into the SAP PORTAL. 3) If the Amendment involves a new line item in the SAP PORTAL for the requested Delivery Point or Consignee, the relevant Consignee must create the line item. 4) The Consignor/Shipper and Consignee shall release the Amendment request, where after the Carrier will accept it if it was as agreed verbally. 5) If the Amendments occur within the prescribed cut off time (8am- 12am – Mondays, Tuesdays and Fridays) a new Operations Notice will be generated after the schedules were updated. 6) If Amendments occur outside the prescribed cut off times (12am- 8am – Wednesdays, Thursdays, Saturdays and Sundays) the Carrier will inform the Facility of the Amendment to the Operations Notice. Any Amendments should also be communicated to Facility by the Party who requested the Amendment.

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ANNEXURE B: Operations Notice

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ANNEXURE C: Calibration Certificate for the Transnet pipe line Bi- Directional Prover

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ANNEXURE D: Meter Printed Receipt

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ANNEXURE E: Application for the registration of a new Road Haulage Vehicle, Driver or Rail Tank Car at Tarlton

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ANNEXURE F: The National Certificate in Professional Driving: Convey Dangerous Goods

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ANNEXURE G: Contractor Employee SHE Induction Confirmation Form

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ANNEXURE H: Transport Permit, Storage, Use and Handling of Flammable Liquids and Substances

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ANNEXURE I: Pressure Test Certificate

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ANNEXURE J: Tarlton Road Haulage Vehicle Pre-Entry Inspection

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ANNEXURE K: Standard Credit Application Form (Transnet Pipelines)

(The 16 page credit application form is attached herewith)

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ANNEXURE L: General Process flow for New Applications for Access to Storage and Pipeline facilities

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ANNEXURE M: CRITERIA/GUIDELINES FOR ACCESS TO THE TRANSNET LIQUID PIPELINE NETWORK

 Prospective Shipper/ User = Parties interested in gaining access to the Transnet Liquid Pipeline Network  TPL = Transnet Pipelines

1) Draft Contract/Agreement:  A proposed (draft) contract/agreement with Transnet Pipelines and the Prospective Shipper should be made available. Typical contract provisions such as, a Scope of Works, Duration of Contract proposed start/end dates, Contract Obligations/Limitations, Special Conditions of Contract, Deliverables, etc. should be clearly indicated.

2) Prospective Shipper Company Profile requirements:  Transnet Customer Application Form: Prospective Shipper‘s must complete a Transnet Customer Application Form. The Prospective Shipper must provide all supporting documents as requested on the Transnet Customer Application Form. This form will be provided on request.  Financial Analysis – (Credit Risk Analysis): Transnet Pipelines will perform a credit risk analysis on the Prospective Shipper to determine if financial performance meets the required financial criteria.  External Credit Profile Assessment: TPL will perform an external credit assessment on the Prospective Shipper credit profile; the Prospective Shipper must provide a letter granting TPL the authority to do so.  Provision of a Bank Guarantee: Dependent on the results of the Prospective Shipper’s credit analysis, a Bank Guarantee, the value of which will be determined by TPL, may have to be provided by the Prospective Shipper. (The format of the Bank Guarantee will be provided by TPL)

3) Operational Info: Please note that the minimum volume/throughput of a Prospective Shipper is 1.5million litres per month. Refer to Annexure N “Operations information” template herein.  Estimated throughput forecast: Provide a forecast of the estimated annual volume throughput for the proposed contract period.

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ANNEXURE M: continued …

 Delivery Points: Provide detail of volumes per customer per product per delivery point: The Prospective Shipper must provide a delivery schedule indicating the forecast volumes per customer per product per delivery point.  Intake Points: Provide a schedule of the proposed intake points at which the product will enter into the pipeline network system (for example, Durban, Natref and Secunda).

4) Prospective Shipper’s Contracted Clients:  Schedule of Prospective Shipper’s Contracted Clients: Prospective Shippers are to provide a detailed schedule of their contracted clients and client locations.  Contractual Agreement/s of Prospective Shipper’s Host Company: Prospective Shippers must provide contractual agreement of their Host Company in the event of the Prospective Shipper not having access to the pipeline system.

5) Existing Pipeline Network Layout: Refer to Annexure O “Sketch of Pipeline Network”  Routing of main line and general location of the Supply and Off-take points: Attached is a ‘not to scale’ (NTS) location plan of the existing Pipeline network routing indicating Intake and Off-take points. Prospective Shipper’s should ensure that their proposals are aligned with the existing pipeline infrastructure.

6) Commercial and Technical/Operations requirements:  Trade/Distribution Licences: Provide certified copies of any trade/distribution licences that the Prospective Shipper is legally required to hold.  Broad Based Black Economic Empowerment (BBBEE): Where necessary, Prospective Shippers must provide a valid certificate to verify contribution BBBEE.  Quality and Compatibility of products into the existing pipeline system:

The quality and compatibility of the products into the pipeline must be fully compliant with TPL’s specification requirements. Refer to Annexure P “Petroleum Products Pipeline Specification”

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ANNEXURE M: continued …

 Technical and Operations: The Prospective Shipper’s proposal must comply with the minimum and maximum Technical and Operations requirements (Pressure, flow rates, etc) (available on request).  New Connections and the Efficiency of current pipeline Operations: The proposed new connections should not affect the overall efficiency of the existing pipeline Operations and network. The proposed new connections will be subject to pipeline design parameters and normal operations acceptance requirements.

7) Access to the pipeline network is subject to the availability of uncommitted capacity on the liquid pipeline network

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ANNEXURE N: “Operations information” Template

TRANSNET PIPELINES

Information required from Prospective New Clients for access to Pipeline Network and Tarlton storage facility Proposed New Client: XXXXX

Notes: In-take Point/s Durban (ex - gate?) Intake points are: Durban, 1 Sasolburg, Coalbrook, Secunda Ex Gate or Point of Delivery ? List of In-take Point Suppliers: Sapref, Enref, Total, Natcos, Natref, 2 Agreement with Supplier signed and in Vopak place? (please forward copy/ies)

Delivery Point/s: Tarlton? Delivery points are: Ladysmith, Bethlehem, Kroonstad, Klerksdorp, 3 Alrode, Langlaagte, Tarlton, Rustenburg, Airport, Waltloo, Jameson Park,Witbank List of Delivery Point Hosts at each Delivery ex Tarlton by rail/road? Point

4 Host Agreements at delivery points ? (please forward copy/ies)

List of clients supplied from each delivery 1) 5 point and the destinations 2) Estimated weekly volume by Product to Intake point 1: be injected at each Intake Point, cubic metres (m3) Product: eg Diesel ? 3 Diesel500, ULP93, ULP95, 6 Weekly Volume (m ): 0 LRP, Avtur Intake point 2: Product: Weekly Volume (m3): 0 Total Weekly Volume 0

Delivery point 1: all to Tarlton? Product: Estimated weekly volume by Product to be Volume (m3): Diesel500, Diesel50, ULP93, ULP95, 7 delivered at each Delivery Point, (m3 ) Delivery point 2: LRP, Avtur Product: Volume (m3): Is Client able to set up for EDI? (Electronic 8 Data Input) Email address of person responsible for 9 reconciliation of account What was the previous mode of transport 10 for these volumes? (eg. by road, rail, or is it 'new' volume? ) Is this volume a take over from an existing BP, Chevron, Engen, Shell, Sasol, 11 pipeline user? If Yes, whom? Total, PetroSA What is the estimated proportion of the 12 volume per month destined for Over 10%.. 20%....100%? Border? (eg. Into Botswana)

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ANNEXURE O: “Sketch of Pipeline Network”

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ANNEXURE P: “Petroleum Products Specification for Pipelines”

PRODUCT SPECIFICATIONS MINIMUM QUALITY REQUIREMENTS Product Name & PROPERTY UNITS METHOD INTAKE DELIVERY code Colour None Visual Bright & Clear Bright & Clear Density @ 20ºC kg / litre ASTMD4052, 0,8000 0,8720 Flash point PMCC Deg C ASTMD93/IP34 57 61 Standard ASTMD4176 or Caltex Diesel Appearance (Haze) Number 1 max 2 max Haze Rating 500ppm Sulphur content mg/kg ISO 20847 450 max 500 max

Water Content, Karl Fischer % (v/v), ASTM D6304 0.03 0.05%

Total Contamination mg/kg IP 440 5 max 14 max

Fatty Acid Methyl Ester (03) vol. % EN 14078 3 max 5 max (FAME) Distillation 90% vol. Recovery Deg C ASTM D86 362 max 362 max

Colour None Visual Orange Orange Density @ 20ºC kg / litre ASTM D4052, D1298 0,705 0, 785 Lead Initial Boiling Point Deg C ASTM D86 Replacem 10% evaporated Deg C ASTM D86 65 max 65 max ent Petrol 50% evaporated Deg C ASTM D86 115 max 115 max (LRP93) 90% evaporated Deg C ASTM D86 185 max 185 max Final Boiling Point Deg C ASTM D86, IP123 210ºC max 215ºC max Residue % vol. ASTM D86 2.0 max 2,0 max ASTMD4176 or Caltex (18) Appearance (Haze) Number 1 max 2 max Haze Rating

Colour None Visual Yellow Yellow Density @ 20ºC kg / litre ASTM D4052, D1298 0,710 0,785 Unleaded Initial Boiling Point Deg C ASTM D86 Petrol 10% evaporated Deg C ASTM D86 65 max 65 max (ULP93) 50% evaporated Deg C ASTM D86 115 max 115 max 90% evaporated Deg C ASTM D86 185 max 185 max Final Boiling Point Deg C ASTM D86, IP123 210 ºC max 215ºC max Residue % vol. ASTM D86 2.0 max 2.0 max ASTMD4176 or Caltex (14) Appearance (Haze) Number 1 max 2 max Haze Rating

Colour None Visual Green Green Density @ 20ºC kg / litre ASTM D4052, D1298 0,710 0,785 Unleaded Initial Boiling Point Deg C ASTM D86 Petrol 10% evaporated Deg C ASTM D86 65 max 65 max 50% evaporated Deg C ASTM D86 115 max 115 max (ULP95) 90% evaporated Deg C ASTM D86 185 max 185 max

Final Boiling Point Deg C ASTM D86, IP123 210 max 215 max Residue % vol. ASTM D86 2.0 max 2,0 max (06) ASTMD4176 or Caltex Appearance (Haze) Number 1 max 2 max Haze Rating

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Colour None Visual Bright & Clear Bright & Clear Density @ 20ºC kg / litre ASTMD4052, D1298 0,8000 0,8720 Flash point PMCC Deg C ASTMD93/IP34 57 max 61 max ASTMD4176 or Caltex Appearance (Haze) Number 1 max 2 max Haze Rating Low Sulphur content mg/kg ISO 20847 45 max 50 max Sulphur Water Content, Karl Fischer % (v/v), ASTM D6304 0.03 max 0.05 max Diesel Total Contamination mg/kg IP 440 5 max 14 max 50ppm Fatty Acid Methyl Ester vol. % EN 14078 3 max 5 max (FAME) Distillation 90% vol. Recovery Deg C ASTM D86 362 max 362 max

Colour None Visual Bright & Clear Bright & Clear Density @ 20ºC kg / litre ASTMD4052, D1298 0,7750 0,8400 ppm Water Content, Karl Fischer ASTM D6304 Zero Zero (v/v), 38 min at Flash point @ 101,325 kPa Deg C ASTM D 56 Intake Visually free from solid matter and ASTMD4176 or Caltex Aviation Appearance Report un-dissolved water Haze Rating Turbine at normal ambient Fuel temperature (AVTUR) Shell Water Detector Sulphur mg/kg ISO 20847 3000 max 600 (DEF STAN 91- (08) Electrical Conductivity pS/m ASTM D2624 91/7) Initial Boiling Point Deg C ASTM D86 10% recovered Deg C ASTM D86 205 max 20% recovered Deg C ASTM D86 Report 50% recovered Deg C ASTM D86 Report 90% recovered Deg C ASTM D86 Report End Point Deg C ASTM D86 300 max Residue vol.% ASTM D86 1.5 max Colour None Visual None None Crude Oil Density @ 20ºC kg / litre ASTM D1298 0,6 1.1 (76)

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