Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

(8) Commitments and Contingencies

Supply Commitments

The minimum required payments for unconditional purchase obligations, including the natural gas purchases outlined below, are as follows:


(in thousands)	Unconditional Purchase Obligations
Year Ending December 31,
2020	$	14,005
2021	8,384
2022	7,757
2023	5,715
2024	4,988
Thereafter	39,070
	$	79,919

Supply Commitments - The Partnership is a party to various supply agreements with both related and third parties which commit the Partnership to purchase minimum volumes of hydrogen, oxygen, nitrogen, pet coke, and natural gas to run its plants’ operations.

The Partnership is also party to a natural gas supply agreement with a third-party that renews annually. Natural gas expense for the years ended December 31, 2019, 2018, and 2017 totaled approximately $33.1 million, $42.4 million, and $40.1 million, respectively, and is included in cost of materials and other and direct operating expenses (exclusive of depreciation and amortization).

The Coffeyville Facility has a hydrogen purchase and sale agreement with CVR Energy’s Coffeyville refinery, pursuant to which it agrees to pay a monthly fixed fee. Additionally, the Coffeyville Facility purchases pet coke under a coke supply agreement. See Note 9 (“Related Party Transactions”) for further discussion of and amounts incurred for the hydrogen purchase and sale agreement and pet coke supply agreement.

The Coffeyville Facility is also party to the Amended and Restated On-Site Product Supply Agreement with a third-party, pursuant to which, it is required to take as available and pay for the supply of oxygen and nitrogen to the plant. This agreement expires in April 2020. Expenses associated with this agreement are included in Direct operating expenses (exclusive of depreciation and amortization), and, for the years ended December 31, 2019, 2018, and 2017, totaled approximately $4.2 million, $3.8 million, and $4.2 million, respectively.

In addition to the related party coke supply agreement, the Coffeyville Facility has pet coke supply agreements with multiple third-party refineries to purchase 300,000 tons of pet coke at a fixed price through the end of the terms, currently ending in December 2020. The Coffeyville Facility has historically purchased third-party pet coke based on spot purchases and supply agreements in place at the time. The delivered cost of third-party pet coke purchases is included in Cost of materials and

other and totaled approximately $10.3 million, $4.8 million, and $4.0 million for the years ended December 31, 2019, 2018, and 2017, respectively.

The East Dubuque Facility has a utility service agreement with a third-party energy cooperative. The term of this agreement ends in June 2022 and includes certain charges on a take-or-pay basis. The cost of utilities, including natural gas purchases, is included in Direct operating expenses (exclusive of depreciation and amortization) and amounts associated with this agreement totaled approximately $3.7 million, $10.6 million, and $10.4 million for the years ended December 31, 2019, 2018, and 2017, respectively.

Contingencies

We do not have any pending litigation or contingencies as of December 31, 2019.