By Jarrett Renshaw
NEW YORK (Reuters) - BP Plc (BP.L) has accused Monroe Power of wrongfully terminating a crude provide contract in 2016, costing the oil main no less than $59 million in damages, in accordance with a federal courtroom submitting.
BP stated within the submitting that Monroe Power, a subsidiary of Delta Air Strains (DAL.N), terminated the contract after misinterpreting a provision relating to the mixing of crude oils.
BP declined to remark additional on the case and Monroe couldn't be instantly reached. Monroe has but to answer the allegations in courtroom.
The dispute with Monroe marks at the least the second time up to now two years that BP has been accused by a refiner of supplying lesser-grade crudes. NARL Refining is embroiled in an arbitration dispute with BP that includes allegations that the oil main was offering crude oil on the firm's Come-By-Probability refinery in Newfoundland, Canada, that helped BP's income however harm the refinery's gear.
Monroe Power inked a three-year contract with BP in August 2014 to provide the corporate's 185,000 barrel-per-day refinery outdoors Philadelphia with crude oil from the Eagle Ford or Bakken shale fields, in response to the lawsuit filed on Thursday in U.S. District Courtroom in Southern New York.
Monroe notified BP final June that it was severing the contract, alleging the oil main was deliberately mixing batches of Eagle Ford crude that didn't meet the API gravity grade referred to as for within the contract, based on the lawsuit.
BP stated the settlement had no language that barred it from commingling grades of crude oil from the identical fields, courtroom papers confirmed. BP says it blended batches of Eagle Ford crude from totally different wells, calling it a routine business follow.
BP additionally stated Monroe used gravity figures measured on the docks in Texas, not on the level of supply as required by contract, based on the lawsuit.
Monroe by no means alleged the delivered crude was not in compliance, BP alleges.
"Monroe's allegations have been nothing greater than an unfounded pretext to terminate the (contract)," BP stated within the submitting.
(Reporting by Jarrett Renshaw; Modifying by Richard Chang and Invoice Trott)