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MMS Sells 114 Bcf of RIK Gas to 10 Companies

More than 114 Bcf of natural gas was sold to 10 energy companies in the latest royalty-in-kind (RIK) sale conducted by the Interior Department's Minerals Management Services (MMS), the agency said Monday.

Ten companies were awarded contracts for 13 sales packages. The winning bidders were Sequent Energy Management LP, Chevron Natural Gas, ConocoPhillips Inc., Constellation Energy Commodities Group Inc., National Energy and Trade LLC, Conectiv Energy Supply Inc., Total Gas & Power North America Inc., Trammo Petroleum Inc., United Energy Trading LLC and Williams Power Co. A total of 15 energy companies made a record 155 bids for the RIK gas during the sale, which concluded in mid-October, the MMS said.

The gas sold during the RIK sale is enough to supply the average needs of nearly 1.5 million U.S. homes for a year, the agency noted. The gas is to be delivered beginning Nov. 1 to 13 offshore pipeline systems originating in the Gulf of Mexico. MMS will not know the amount of revenues taken in from the RIK sale until the gas is actually delivered to the companies, said agency spokesman Pat Etchart in Denver.

The October sale was the first time that gas from leases offshore Alabama in the federal 8(g) zone was included in an RIK sale. Gas from 8(g) zones offshore Louisiana and Texas have been included in previous RIK sales. The 8(g) zone is a three-mile transition area between a state's offshore territorial line and federal waters. Coastal states, such as Alabama, are entitled to a share of the federal revenues from gas produced in this transition area.

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