MMS Offers 25 MMcf/d MOPS Royalty Gas
The Minerals Management Service (MMS) is soliciting bids for
about 25 MMcf/d or its royalty share of gas produced from certain
offshore leases in the Matagorda Island Offshore Operating System
(MOPS). Bids are due by July 24 at 1 p.m. ET and the winner will be
chosen within the following 24 hours.
The initial contract term for the pilot royalty-in-kind (RIK)
program will be from Aug. 1 through Oct. 31, 2000. Subsequent
offers are expected to be made for November to March and April to
October. Some 15,000 MMBtu/d is being offered as base gas and
another 10,720 MMBtu/d as swing.
It is the first time the Interior Department agency has
negotiated a transportation agreement for its royalty gas. The
successful bidder, acting as agent for MMS, will assume all
responsibilities of the MMS transportation contract for MOPS as a
shipper of royalty gas, including receiving and paying the invoice
of MOPS operator, Northern Natural Gas. MMS will reduce the monthly
royalty gas invoice by the NNG invoiced transportation expense. The
buyer will not be responsible for costs upstream of the NNG point
The specified delivery points are the inlet flange or weld of
the applicable NNG metering facilities; either from any lateral
line or a direct connection to the platform. The MOPS services the
Tivoli Gas Plant area. Pipeline interconnections at Tivoli are
Florida Gas Transmission, Houston Pipeline, Coral Pipeline, Midcon
Pipeline, NGPL and Koch.
The operators of the leases providing the royalty gas will
deliver it daily or at the same frequency as it is produced from
the property. The winning bidder will assume all the MMS
responsibilities for arrangements regarding production with the
The MMS offer purposely does not specify what type of bid
pricing --- fixed or indexed --- it will accept. "This is a new
program and we were very, very quiet on that subject," said Karen
Bigelow, from the MMS' Denver office. "We wanted to see what people
would come up with - some creativity." Interested bidders may
contact Bigelow at 303-275-7411 to determine if they pre-qualify or
can become pre-qualified for this sale. The bid invitation may be
found at www.rmp.mms.gov/RIKweb/DocumentsDoc/documents.html.
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