Integrated Rail And Resources Acquisition's Comment on Supply Chain
STUSCO is the supplier of crude feedstock to the facility and the sole purchaser of crude oil products for both the initial nameplate capacity and any contracted expansion capacity. The purchase price for crude feedstock and crude oil products is determined based on WTI CMA NYMEX (M+1) minus a specified differential, with an additional processing fee applied to crude oil products. STUSCO has no minimum volume commitments but is subject to a Minimum Revenue Commitment under the Shell Commitment Agreement, which includes a monthly minimum revenue commitment estimated at $400,000 for five years, totaling approximately $25,000,000. Profit sharing between the company and STUSCO is calculated based on the positive difference between the crack spread and the processing fee, with different profit splits applicable before and after the initial term or the fulfillment of the total minimum revenue commitment. The facility is required to maintain a minimum operational capacity; failure to do so results in the creation of credits for unprocessed barrels, which must be utilized within specified timeframes. Additionally, STUSCO holds a right of first refusal for any expansion of refining capacity at the facility.
Integrated Rail And Resources Acquisition's Comment on Supply Chain
STUSCO is the supplier of crude feedstock to the facility and the sole purchaser of crude oil products for both the initial nameplate capacity and any contracted expansion capacity. The purchase price for crude feedstock and crude oil products is determined based on WTI CMA NYMEX (M+1) minus a specified differential, with an additional processing fee applied to crude oil products. STUSCO has no minimum volume commitments but is subject to a Minimum Revenue Commitment under the Shell Commitment Agreement, which includes a monthly minimum revenue commitment estimated at $400,000 for five years, totaling approximately $25,000,000. Profit sharing between the company and STUSCO is calculated based on the positive difference between the crack spread and the processing fee, with different profit splits applicable before and after the initial term or the fulfillment of the total minimum revenue commitment. The facility is required to maintain a minimum operational capacity; failure to do so results in the creation of credits for unprocessed barrels, which must be utilized within specified timeframes. Additionally, STUSCO holds a right of first refusal for any expansion of refining capacity at the facility.
Sources:
Integrated Rail And Resources Acquisition Corp's official press releases and regulatory filings; CSIMarket.com's supply-chain research; and the financial filings and press releases of other companies cited in this report.
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