14.052 Rev. 0 - 9PE122 & 9PE123 - ECOPETROL- Cleaning Supervision, Inspection & Repair.pdf

October 24, 2014

Financial & Technical Proposal PKS 14.052 Rev. 0 EcoPetrol Barrancabermeja PACKINOX Heat Exchanger 9PE118 – Platforming Unit Cleaning supervision, Inspection & Repair

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This document may not be copied, or reproduced, in whole or in part, without ALFA LAVAL LAVAL PACKINOX’s prior written authorisation.

LIST OF CONTENT

1 - Introduction

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2 - Scope of supply

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3 - Prices

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4 – Applicable Laws and Regulations

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5 - Terms and Methods of Payment

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6 - Schedule

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7 - General Terms and Conditions

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8 - Validity

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Annex 1 – Smoke Test (schematic drawing)

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Annex 2 - Schedule

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Annex 3 – AL PACKINOX General Terms and Conditions for Services and Spare Parts Page 9

___________________________________________________________________________________________________________ USE OR DISCLOSURE OF PROPOSAL DATA IS SUBJECT TO THE RESTRICTION ON THE TITLE PAGE OF THIS PROPOSAL

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1 - Introduction This proposal concerns the Cleaning Supervision, Inspection, Leak Test & eventual Repair job of the PACKINOX Heat Exchanger 9PE118 (EcoPetrol Barrancabermeja Refinery – Platforming unit).

2 - Scope of Job The start-up date of the job will be commonly agreed between the Refinery and Alfa Laval Packinox, based on the availability of the workers. ALFA LAVAL PACKINOX shall be advised at least 10 opening days before the planned date, for work preparation. In case of shorter than 10 days notice, extra cost as defined in point 3.1. will be applied. 2.1 ALFA LAVAL PACKINOX will perform : 2.1.1 Preparation Works : Before departure to the site, the supervisor will : • Contact maintenance and operation people, Give all necessary recommendations for the work (review of Refinery’s procedures if any, …) • 2.1.2 Cleaning supervision : The following cleaning agent is proposed by AL Packinox : - ammonia water or soda ash water, followed by a rinse with demineralised water, for chloride salts elimination. Before any internal inspection, Heat Exchanger cleaning (or neutralisation) is mandatory. The supervisor will: Review cleaning installation, • • Witness that the refinery procedure is correctly followed (cleaning shall be done by Refinery or its subcontractor). 2.1.3 Internal Inspection : Borescope inspection of HE effluent inlet sections (Refinery shall make available an adequate • borescope). • Internal visual inspection after opening of the accessible parts of the exchanger. 2.1.4 Vacuum leak test : The supervisor will perform a leak test according to ALFA LAVAL PACKINOX latest procedure SAIEXWA0010 in order to determine the leak rate. Vacuum pump or vacuum truck shall be supplied by the refinery. 2.1.5 Repair job (eventually) : The supervisor will supervise the following works: Opening of working windows in bottom and top headers. • Note : These windows will be done by local workers under ALFA LAVAL PACKINOX supervision. Leakage location detection (channel ends or inside the plate bundle). • ___________________________________________________________________________________________________________ USE OR DISCLOSURE OF PROPOSAL DATA IS SUBJECT TO THE RESTRICTION ON THE TITLE PAGE OF THIS PROPOSAL

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The step-by-step procedure for leakage location will be: - visual inspection of channel ends, - should the cracks not being on these welds, location can be found by smoke test (smoke generator provided by AL PACKINOX - Vacuum pump or vacuum truck shall be supplied by the refinery ; vacuum truck is strongly recommended). • Repair either by making a new weld on the found defect or by plugging the plate channels. The main steps for leakage repair will be: - re-welding of the cracked welds, - plugging the channels (using specific ‘T’ shaped stainless steel pieces supplied by ALFA LAVAL PACKINOX). • Intermediate leak test : This leak test according to ALFA LAVAL PACKINOX latest procedure SAIEXWA0010 will be performed in order to determine the remaining leak rate after effluent headers closing. Re-welding of effluent headers. This will be done by Local workers. • • Leak test after repair This final leak test after repair according to ALFA LAVAL PACKINOX latest procedure SAIEXWA0010 will be performed after the effluent header welding in order to verify the repair work. Re-welding of feed headers. This will be done by Local workers. • The repair operation itself (welding on bundle) will be performed by 1 Alfa Laval Packinox supervisor and two Alfa Laval Packinox welders. 2.1.6 -

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List of required human ressources, equipment and utilities to be provided by the Refinery : Dry compressed air for grinding machine (6 to 7 bar minimum - instrument air is OK) Two TIG (GTAW) welding machines for welded wall and headers re-welding 200 - 250 A and water cooled (preferably). Strong preference for self arching torches and High Frequency current. Both welding machines could be used at the Top and at the Bottom and are supplied with Torches and tungsten electrodes (2.4mm). If possible 2 TIG (GTAW) welding machines for repairing the channels (most delicate work) 40 – 150 A, torches as small as possible, cooling not mandatory but preferable; strong preference for self arching torches and High frequency current. Both machines could be used at the top and at the bottom and are supplied with Torches and tungsten electrodes (2.4mm). Argon bottles for TIG (GTAW) welding, minimum 2 bottles per welding machine. Grinding machines (preferably pneumatic machines) with cutting and grinding disks for stainless steel. Filler metal (stainless steel 347) for headers re welding - diameter 2.4 and 3.2mm. 2 stainless steel sheets (SS 321) for tests and repair: thickness 2.5 to 4mm, 1 meter x 1meter. 2 Stainless steel sheets for bottom feed headers: thickness 3 to 5 mm, 2 meter x 0.5 meter. Transparent plastic tubes for the cleaning (see procedure) and for the leak tests. Rope (or Chain) ladder for welded walls inspection (length of the bundle) & safety harness. Vacuum pump or vacuum truck for smoke detection (vacuum truck is strongly recommended). ___________________________________________________________________________________________________________ USE OR DISCLOSURE OF PROPOSAL DATA IS SUBJECT TO THE RESTRICTION ON THE TITLE PAGE OF THIS PROPOSAL

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2 Skilled local welders qualified GTAW for stainless steel for headers windows cutting and re-welding. Note: All supplied material will have Material Certificates. This list is not exhaustive and may be completed by ALFA LAVAL PACKINOX at least one week before the repair The Refinery should advise ALFA LAVAL PACKINOX as soon as possible if any of the above equipment or material is not available. 2.1.7 -

List of required List of required human resources and equipment provided by ALFA LAVAL PACKINOX. 1 supervisor 2 welders for bundle repair PPE and personal welding equipment for each supervisor and welder. Specific equipment / Materials for the repair : T-shape Stainless steel blocking pieces, Stainless Steel spacers.

2.2 Options : None.

3 - Prices 3.1. Basic Proposal Basic proposal prices as defined in the above scope of supply, paragraph 2,1 are :

Shorter than 10 days advance notice: Between 5 and 10 days notice Below 5 days notice

EUR 1250 EUR 2500

Preparation work (lump sum price):

EUR 1 250

AL PACKINOX Supervisor : Daily rate for one AL PACKINOX’s supervisor will be :

EUR 1460 per day

AL PACKINOX welder : Daily rate for one AL PACKINOX’s welder will be :

EUR 1320 per day

Consumables (in case of repair) : Lump sum price for consumables to be used on site :

EUR 2000

Travel : Transportation from AL Packinox workshop to site (taxi + train + flight + rental car) and excess of baggages (material for repair) will be charged at cost + 10% for administration fees. Inspection & Repair report (lump sum price) :

EUR 1250


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Travel time will be considered as on site working days. 4 (2 x 2) travel days per person will be considered for one return trip. Time for medical visit and other access formalities will be considered as working time. All other expenses (Hotel, food, personal expenses) are included i n above-mentioned prices. 3.2. Options : None 3.3. Prices Conditions

The lump sum prices and rates indicated in this proposal are fixed prices calculated for the following expected period of contract : 1) Purchase Order : 2) Site work :

14 days before start of work before end of March.

Note: Final invoice will consider the real number of days on-site. The prices indicated in this proposal do not include any taxes, duties or withholding of any kind, which may be levied by the Local Authorities on the scope of supply. In the event AL PACKINOX would have to pay such taxes, duties or withholding, the prices and rates indicated in this proposal will be reviewed to take this into account.

4 – Applicable Laws and Regulations 4.1 Applicable Laws

Alfa Laval Packinox's personal shall respect both the National (local) and French laws and regulations, which is the most constraining. 4.2 “Working Time”

The French law requires the following : - Per day, the “Working Time” must be 10 hours maximum; - In a calendar week (from Monday to Sunday), the total “Working Time” must be 48 hours maximum; - After a maximum of 6 consecutive working days, one day off is mandatory. Travel Hotel/Site/Hotel and Dressing time are not considered as “Working Time”.


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4.3 Travel Time

Regarding the French Law, Travel time is considered as working days. For the travel from France to site : 2 working day (16 working hours) will be taken into account. Note : These Legal working days may be different from the invoiced travel days.

5 - Terms and Methods of Payment 5.1. Daily rates and travels expenses

The total amount due under the daily rates and expenses will be adjusted after completion of the Work and shall be paid by immediate bank transfer by the Refinery.

6 – Schedule (see Annex 2) Based on our experience, the total duration is something around 2 - 3 days for the cleaning job, 1 day for leak test and inspection and around 10 additional days for repair. Note : This schedule is given for information. Final invoice will consider the real number of days onsite. Important : note that AL Packinox people will be not available from December 20 to January 05.

7 - General Terms and Conditions According to ALFA LAVAL PACKINOX’s General Terms and Conditions for Services and Spare Parts here attached. The corresponding contract should be addressed to ALFA LAVAL PACKINOX at the following address: ALFA LAVAL PACKINOX 14, rue de Bassano 75116 Paris (FRANCE) Phone : (Country code 33) 1 53 67 41 41 Fax : (Country code 33) 1 53 67 41 42

8 - Validity This proposal is valid until January 31, 2015. ___________________________________________________________________________________________________________ USE OR DISCLOSURE OF PROPOSAL DATA IS SUBJECT TO THE RESTRICTION ON THE TITLE PAGE OF THIS PROPOSAL

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Annex No. 1 : Smoke Test E2 (effluent inlet) blinded S1(feed outlet) open

Windows in Feed outlet header Smoke generator

Bundle (thick plate)

Effluent outlet

Windows in Feed inlet header E1

S2 Vacuum effluent side


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Annex 2 – Schedule

D0

D1

D2

D3

D4

D5

D6

D7

D8

D9

D10

D11

D12

D13

D14

D15

D16

D17

D18

Day-off Water wash Inspection Leaktest Feed Header opening* Smoke Test Effluent Header opening* Day-off Channel ends repair Intermediate Leak Test Effluent header re-welding* Final Leak test Feed Header Rewelding* Return Travel Report (1 day) * : by local welders

Note that the day-off after maximum six working days shall be fixed on site jointly by AL Packinox and the Refinery.


D19

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Annex 3 – ALFA LAVAL PACKINOX (ALP) General Terms and Conditions for Services and Spare Parts 1 - General Subject to any modifications or exceptions that may be agreed in writing by both parties, the present document defines the general conditions governing ALP's performance of Services to the Customer on the Equipment and/or the supply of Spare Parts. The following terms shall have the following meanings: • "Contract" means the contract between ALP and the Customer. The Contract is made up of the following documents: - the special conditions ; - these general terms and conditions ; - the technical specifications. In the event of any discrepancy or contradiction between any of these applicable documents, the former shall supersede the latter. • " ALP " means ALFA LAVAL PACKINOX, its employees, agents and subcontractors. • "Services" means the services provided by ALP under the Contract. • "Equipment" means the equipment on which Services are carried out and/or in which the Spare Parts are incorporated. • "Spare Parts" means the spare parts supplied by ALP under the Contract. • "Site" means the place where the Equipment is operated. 2 - Formation - Performance Of The Contract The Contract concluded between ALP and the Customer results only from an offer made by ALP in writing. ALP 's offer shall be valid for 90 days from the date of submittal. The parties shall be deemed to have entered into Contract either upon written acceptance by the Customer of ALP 's offer within its period of validity, or in case of an order placed by the Customer, once ALP has sent written acceptance of such order. The parties may modify the scope of supply of the Contract by mutual agreement during its performance. The said modification shall only apply as from the signature by the parties of a written amendment to the Contract. 3 - Prices - Payments 3.1 Prices : The prices for the Spare Parts and Services are stated exclusive of taxes, levies, duties, charges, fees or withholdings of any kind, which may be levied by all authorities in connection with the Contract except those applicable in France. In the event ALP is to pay such taxes, duties, or charges, the prices indicated in the Contract will be increased accordingly. In case of European Union transaction, the Customer undertakes to provide ALP with all information and documents which could be required for Value Added Tax purposes. Services : unless otherwise indicated in the Contract, the price for the Services will be charged at the hourly and/or daily rates stipulated in ALP's offer. Spare Parts : unless otherwise indicated in the Contract, the prices of the Spares Parts are firm and they are not subject to any adjustment. They are specified for non-packaged Spare Parts made available at ALP's premises or at its sub-contractors (EXW Incoterms 2000). 3.2 Payments : Services : Unless otherwise stated in the Contract, the payments shall be made monthly for services performed the previous month. Spare Parts: The Contract shall specify the number, amount and triggering factors for the due dates for payment of the Spare Parts. ALP's invoices sent to the Customer shall be paid by bank transfer no later than thirty (30) days after its issuance date. Payments must be made with no deductions, withholdings, set-off whatsoever. Any claims by the Customer must in no event operate to defer or to suspend the payments. 4 - Terms Of Performance 4.1 ALP undertakes to send only skilled personnel on Site. 4.2

The Customer shall furnish to ALP such documents, data and other information necessary to perform or facilitate the performance of the Services and/or the manufacture of the Spare Parts; and shall furnish an accurate description of the general state of the Equipment, of its using and operating conditions and of its maintenance history since the first taking over. The Customer shall clearly inform ALP in writing of the security instructions, of the Site regulations, of all legal requirements applicable on Site and of all obligations which ensue from it.

PACKINOX.JE.ENL.GTCS.2000.05. ___________________________________________________________________________________________________________ USE OR DISCLOSURE OF PROPOSAL DATA IS SUBJECT TO THE RESTRICTION ON THE TITLE PAGE OF THIS PROPOSAL

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4.3

If the Equipment is not of ALP's origin, the Customer shall provide all technical documents relating to the Equipment (installations instructions, manufacturer technical manuals, work instruction manuals…).

4.4

Services shall include a diagnosis of the state of the Equipment where the Contract so specifies or when the Equipment is not of ALP's origin. ALP shall provide a report stating the likely reasons of the possible malfunctions and/or of technical operations which are - in ALP opinion - necessary to maintain and/or to make the Equipment in the state as specified by the Customer. At the end of the diagnosis, a report shall be written by ALP and sent to the Customer. If the result of the diagnosis shows that it is not possible for ALP to pursue the Services, ALP shall be entitled to terminate the Contract as per article 10.2.

4.5

Unless otherwise specified, the Customer shall carry out at its own risks and costs all transportation operations (including customs clearance) for the Equipment, the tools and materials used by ALP for its Services.

4.6

The Customer shall take all necessary steps in order that the Equipment shall be free of access and available at any time of the performance of the Services.

4.7

Unless otherwise specified, the Customer shall be in charge of all handling, removal, and reassembling operations of the Equipment and of the adjacent facilities.

4.8

The Customer shall obtain and maintain in full force and effect the licenses, permits and authorisations necessary for the performance of the Services and the delivery of the Spare Parts.

4.9

The Customer shall facilitate the performance of the Services by ALP's personnel or subcontractors. In particular and without limitation, the Customer shall : - provide ALP with free access to the Equipment during normal working hours or during any other period specified in the Contract. - provide ALP free of charge all necessary facilities (in particular premises, offices...), utilities (such as electric power, consumable, water supply, telephone, telefax...), equipment, tools as required by ALP for the performance of the Services on Site.

4.10 TITLE TO THE SPARE PARTS SHALL PASS TO THE CUSTOMER UPON RECEIPT BY ALP OF THE CONTRACT'S WHOLE PRICE. The transfer of risks to the Spare Parts shall occur at their delivery. 5 - Completion Report The completion of Services shall be certified with a completion certificate and/or time sheets signed by the Customer and/or subcontractors and/or suppliers. Notwithstanding the foregoing, in the event the Customer uses or operates the Equipment on which the Services were performed, the completion certificate will be deemed to have been automatically issued. 6 - Warranty 6.1 Services: ALP warrants that the Services carried out under the Contract shall be performed in a professional and workmanlike manner. ALP shall re-perform at its own expense any of its Services which fails to conform to this warranty, provided that any such failure is reported in writing to ALP no later than six (6) months after the completion of the Services. 6.2

6.3

6.4

Spare Parts: ALP warrants that the Spare Parts will be free from defect in workmanship and material. The warranty period shall be twelve (12) months from delivery of the Spare Parts to the Customer. Any Spare Part or part thereof furnished to the Customers which fails to conform with this warranty shall be either modified, repaired or replaced at ALP's option and expenses. Parts replaced or repaired under such warranty clause shall be warranted for a period of twelve (12) months from the date of replacement or repair. The warranty set forth herein shall not apply to: defects resulting from a design specified by the Customer or from raw materials supplied by the Customer; the Spare Parts' normal wear and tear ; the Spare Parts' deterioration due to improper or unsuitable receipt, handling, storage, installation, operation, maintenance or misapplication ; defects due to alterations, modifications or repairs carried out by the Customer or third parties ; incidents resulting from events of force majeure. ALP's sole liability, and Customer’s sole and exclusive remedy with respect to these warranties shall be limited to the remedies set forth above. THE EXPRESS WARRANTY SET FORTH IN THIS ARTICLE 6 SHALL CONSTITUTE THE SOLE AND EXCLUSIVE WARRANTY MADE BY ALP AND IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY, EXPRESS OR IMPLIED INCLUDING ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM ANY CAUSE OF DEALING OR USAGE OR TRADE.

7 - Liabilities - Insurance ALP shall make all reasonable efforts to provide the Services, but does not warranty in any case the results of such Services. Notwithstanding anything to the contrary, the total cumulative liability of ALP for damages whether in contract or in tort, strict PACKINOX.JE.ENL.GTCS.2000.05. ___________________________________________________________________________________________________________ USE OR DISCLOSURE OF PROPOSAL DATA IS SUBJECT TO THE RESTRICTION ON THE TITLE PAGE OF THIS PROPOSAL

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liability or otherwise, shall in no event and under no circumstances exceed the Contract price. Above this amount, the Customer will indemnify and hold ALP an d its insurers harmless for all claims made b y third parties for such d amages. Notwithstanding anything to the contrary, under no circumstances, whether arising under contract, tort (including negligence), strict liability or otherwise, shall ALP be liable for incidental, special, indirect or consequential losses or damages of any nature arising at any time for any cause whatsoever, such as but not limited to loss of use, loss of profit, claims of customers...The Customer will indemnify and hold ALP an d its insurers harmless for all claims resulting from such losses or damages. Where the Customer benefits from an insurance policy covering ALP's liability resulting from the Services performed and/or the Spare Parts delivered, it shall name ALP as co-insured parties with a waiver of recourse against ALP and its respective insurers. In no case shall ALP be liable for any error, in the carrying out of the Services, which is the result of an omission, inaccuracy, defect in the plans, documents or information provided by the Customer. It is expressly agreed between the parties that in no case and under no circumstances ALP shall be held responsible for the use of the results of the diagnosis by the Customer or third parties. 8 - Confidentiality - Industrial Property The studies, documents, data, plans and information provided by ALP to the Customer shall remain ALP's property and must be considered as private and confidential. They may not be disclosed by the Customer to any persons other than those within its personnel who are expressly authorized to have knowledge thereof. They may not be recopied, reproduced, transmitted or disclosed in any manner whatsoever by the Customer to third parties, without ALP's prior written authorization. The Customer shall not use the knowledge transmitted by ALP without ALP's prior written authorization. Any information, invention patented or likely to be patented, know-how etc..., related to the Equipment and generated during the performance of the Contract shall be the ownership of ALP. 9 - Force Majeure ALP shall not be liable for any delay or non-performance of the Contract, in case such non-performance or delay is caused by an event of Force Majeure. Force Majeure shall mean any cause existing or future which is beyond ALP's reasonable control, and which ALP cannot reasonably overcome, including, but not limited to, acts of god, storm, fire, strikes, sabotage, embargo, interruptions or delays involving transportation or communications, the acts or regulations of public, civil or military authorities (including the delays in the procurement of authorizations or permits of all types), acts of war (declared or undeclared), acts of terrorism. Upon the occurrence of such an event, ALP shall promptly inform the Customer in writing, and the time limits provided for performance shall automatically be extended for the duration of such an event. Where the duration of the event of Force Majeure exceeds 60 days, either party may automatically terminate the Contract, by registered letter with return receipt. In such case, every part of the Services completed as at the date of termination shall be paid by the Customer on the basis of the price conditions as stated in the Contract. 10 - Termination 10.1 In case of either party's material breach of its obligations, the other party may, by registered letter with return receipt, serve formal notice on the defaulting party, requiring it to remedy such breach. Where, 30 days following such notice, the defaulting party has not begun to remedy such breach, the other party shall be entitled to terminate the Contract, by registered letter with return receipt. The termination shall automatically become effective on the date of receipt of the registered letter specified above. 10.2 Where the case provided in article 4.4 is realized, ALP is entitled to terminate the Contract by registered letter with return receipt. The termination shall automatically become effective 30 days after the receipt of the registered letter specified above. In such a case the Services already performed and/or the Spare Parts already delivered at the date of the termination shall be paid by the Customer to ALP. No indemnification shall be due to both parties because of the said termination. 11 - Assignment - Sub-Contracting The Customer may not assign all or part of its rights and obligations in connection with the Contract, without ALP's prior written consent. ALP reserves the right to sub-contract to one or more sub-contractors all or part of the Services. 12 - Governing Law - Dispute Settlement The substantive Swiss code of obligations is applicable to this Contract. Any disputes arising from or in connection with the Contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with the said rules, rules which the parties RECOGNIZE that they know. The place of arbitration shall be Geneva, Switzerland. The arbitrators shall apply the substantive Swiss CODE OF OBLIGATIONS to the merits of the dispute and in all cases shall decide in accordance with terms and conditions of the Contract.

PACKINOX.JE.ENL.GTCS.2000.05. ___________________________________________________________________________________________________________ USE OR DISCLOSURE OF PROPOSAL DATA IS SUBJECT TO THE RESTRICTION ON THE TITLE PAGE OF THIS PROPOSAL

14.052 Rev. 0 - 9PE122 & 9PE123 - ECOPETROL- Cleaning Supervision, Inspection & Repair.pdf

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