SOLICITATION NOTICE
99 -- SALE OF FEDERAL NATURAL GAS
- Notice Date
- 8/13/2010
- Notice Type
- Sale of Surplus Property
- NAICS
- 211112
— Natural Gas Liquid Extraction
- Contracting Office
- BLM NM-AMARILLO FIELD OFC(NM006)801 S. FILLMORE, SUITE 500AMARILLOTX79101US
- ZIP Code
- 00000
- Point of Contact
- John Hamak, 806-356-1025, John_Hamak@blm.gov
- E-Mail Address
-
Cynthia S. Martin
(Cindy_Martin@blm.gov)
- Small Business Set-Aside
- N/A
- Description
- INVITATION FOR OFFERFEDERAL GAS FROM CLIFFSIDE HELIUM ENRICHMENT UNIT IFO No. BLM-CHEU-001October 2010 March 2010 Introduction The Bureau of Land Management (BLM) of the U.S. Department of the Interior (DOI) is requesting written offers from pre-qualified companies (see Pre-Qualification and Credit Requirements) to purchase Federal gas produced from the Bureau of Land Managements (BLM) Cliffside Helium Enrichment Unit (CHEU). The BLMs CHEU is located in Potter County, Texas near the city of Amarillo. Production from the CHEU is delivered into El Paso Natural Gas (El Paso) natural gas transmission system via El Pasos Cliffside lateral line. The BLM has contracted with El Paso for firm transportation over this lateral. This firm contract includes access to interconnects with Natural Gas Pipeline Company of America (NGPL) and El Paso Natural Gas (El Paso), also located in Potter County, Texas. This sale is for a six month term beginning on October 1, 2010. The buyer will take custody of the Federal gas at the interconnect of the CHEU and the Cliffside lateral (delivery point) and will schedule and nominate the gas at and downstream of this point. Written offers via facsimile (fax no. 806-356-1041) are due by 11:00 a.m. CDT on September 03, 2010. We will verbally notify award winners by 3:00 p.m. CDT on September 09. Please call John Hamak at 806-356-1025 with questions about this Invitation for Offer (IFO).Offers The Attachment is the offer sheet containing the meter numbers, estimated daily production, preferred index prices, interconnect meter numbers, and contact information. Your offer, expressed as an increment or decrement in relation to the index price, should be placed in the appropriate offer sheet column. Please note that we are selling all of this gas under a swing obligation on the daily market rather than using a baseload and swing component. The CHEU volume may increase or decrease through the term of this sale although BLM anticipates relatively stable production rates. The BLM and the buyer will mutually agree to pricing remedies when: The index price does not post or is removed;Gas cannot flow on the pipeline specified due to pipeline operational issues;Gas flow is disrupted due to Force Majeure, including acts of God. Consideration of Offers The BLM may award a contract on the basis of initial offer(s) received without discussion. Accordingly, each initial offer should be submitted on the most favorable terms that the offeror can submit. However, the BLM may negotiate with offerors in the event offers of similar or unanticipated value are received. The BLM may ask for a refreshed offer in these cases and ask the offeror to submit the refreshed offer via email to john_hamak@BLM.gov. The BLM shall award a contract resulting from this IFO to the offeror whose offer, in BLMs sole judgment is the most advantageous to the Federal Government. The BLM will confirm award to the buyer by means of its Natural Gas Transaction Confirmation and Agreement (TC). The BLM will be the confirming party for both the TC and any subsequent revisions to the TC. Term Deliveries of the Federal CHEU gas to the buyer will commence on October 1, 2010. The delivery period will be for a term ending March 31, 2011. The reasons for which the BLM may declare an early cancellation may be, but are not limited to: The failure to pay, when due, any payment required under this agreement, if such failure is not remedied within 5 business days after written notice of such failure, provided that the payment is not the subject of a good faith dispute and the buyer provides documentation described under Payment Terms. The failure to provide adequate financial assurances to the BLM specified under Pre-Qualification and Credit Requirements. Any representation or warranty which is proven to have been false or misleading in any material respect when made or deemed to be repeated. Transportation and Scheduling of Federal Gas The buyer agrees to take 100% of the Federal gas delivered at the delivery point for the entire contract period. The BLM will use reasonable efforts, consistent with industry practice, to inform the buyer regarding significant changes in gas production levels, gas quality, and production shut-ins. The buyer, through customary industry practice set forth by North American Energy Standards Board (NAESB) and the Council of Petroleum Accountants Societies (COPAS) in nominating and scheduling transportation services, will communicate directly with the BLM. The buyer, at its expense, shall make all necessary arrangements to receive delivery of Federal gas at the delivery point. Therefore the buyer, taking gas downstream of the delivery point on purchasers contract, will be responsible for associated penalties, imbalance cashouts and penalties, as well as pipeline imbalances scheduled by buyer. The buyer is not responsible for costs of transportation upstream of the delivery point nor is it responsible for the Cliffside lateral transportation cost. No later than eight calendar days before the first day of each month, the BLM will notify the buyer of the daily gas volume and quality anticipated for the following month of production. The buyer understands that any such estimate is not a warranty of actual deliveries to be made but is provided to facilitate planning of delivery of royalty gas. Actual volumes should be confirmed daily with the BLM. This will continue for each month of the royalty gas delivery period. The buyer schedules; nominates and receives pipeline confirmations of flowing gas; the BLM is a read-only entity. Governing Contract This transaction is governed by the Gas Industries Standards Board (GISB) and/or NAESB contract signed between the buyer and BLM. The provisions in this IFO are a condition of your purchase and are supplemental to the GISB and/or NAESB contract. Conflicts between the GISB and/or NAESB contract and this IFO shall be resolved in favor of the IFO. The BLM will send the successful offeror a Transaction Confirmation (TC) detailing the awarded package. The TC will be deemed binding for both parties if the buyer does not either sign and return or note discrepancies within 2 business days from date of receipt. The BLM prefers that a fully executed TC be returned. Pre-Qualification, and Credit Requirements To pre-qualify, new offerors are required to sign the NAESB "Base Contract for Sale and Purchase of Natural Gas" including the BLM Special Provisions, and provide detailed financial information. If the offeror has previously signed the GISB contract or the NAESB, a new contract will not be required. Participants new to the program must have the NAESB signed and sent back to the BLM prior to bidding. Upon pre-qualifying, the BLM will issue an amount of unsecured credit based on the creditworthiness of the offeror. In cases where pre-qualified offerors have submitted their most current financial documentation, no additional information will be required. Please be advised that the BLM will require a parent guaranty in situations where the company submitting the offer is a different entity than the company that has pre-qualified. The BLM reserves the right to request additional financial information in any situation it deems necessary and may reissue or suspend approved lines of credit. Furthermore, buyers are required to provide the BLM with any information regarding a significant, adverse change in their financial status that would affect the approved line of credit. Such adverse changes would include a credit downgrade, material changes to liquidity or capital resources, noncompliance with financial covenants in debt documents, or significant market events affecting operations, revenues, or assets. Further, should the creditworthiness, financial responsibility, or ability to perform become unsatisfactory to the BLM at any time during the term of this agreement, satisfactory assurance may be required as a condition to further performance under the agreement. For awards exceeding the amount of unsecured credit issued by the BLM, buyers will be required to provide secured financial assurance in the form of an Irrevocable Letter of Credit (ILOC), Bond, or other BLM-acceptable surety instrument 5 business days prior to first receipt of natural gas under the contract. The financial assurance amount shall be sufficient to cover the value of 60 days of deliveries of the estimated production of all royalty gas awarded, less the amount of unsecured credit issued by the BLM as previously notified. For new surety instruments, the BLM will contact you regarding the calculation of an estimated amount of surety to be provided prior to initial deliveries. For continuing surety instruments, we will contact you regarding renewal requirements. Significant and sustained increases in the value of natural gas during the term of the contract may result in requiring an increase in the amount of financial assurance. Failure to provide requested surety within 5 business days after the request has been made, may result in cancellation of the award or termination of the contract. Payment Terms The BLM will invoice the purchaser for payments and transportation adjustments. Liquidated Damages If the buyer requests an early contract cancellation in writing and the BLM agrees to the cancellation, the BLM will remarket the gas using commercially reasonable efforts in an arms-length transaction. The BLM will collect from the terminated party, on a monthly basis, an amount equal to the positive difference, if any, between the original contract price and the price at which the gas was remarketed. The BLM will also notify the buyer of the new contract price before reselling the gas. The BLM may also elect to enforce any liquidated damages specified in the signed GISB and/or NAESB contract. Contact John Hamak for Bid Sheet
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