Dynegy Winning Bidder in MMS Gas Pilot
Houston-based Dynegy Marketing and Trade has beat out some of
the top natural gas producers in the nation in the latest round of
bidding for Minerals Management Service's royalty-in kind gas
produced from federal leases in the Gulf of Mexico.
As a result, Dynegy Marketing has won the right to take custody
of about 180 MMcf/d of royalty gas produced from properties
connected to Stingray Pipeline, the High Island Offshore System,
the U-T Offshore System, Pelican Gas Gathering System, ANR Pipeline
and Transcontinental Pipe Line's North High Island system during
the period between Nov. 1, 2000-March 31, 2001.
Under the agreement with MMS, Dynegy will take possession of the
royalty gas at federal offshore leases in the Gulf, and will
re-deliver a "very large portion" of gas as payment to the agency
at two onshore delivery points - ANR and Natural Gas Pipeline Co.
of America (NGPL) Louisiana pools. "I'm not at liberty to say
exactly how much" of the gas will be returned to MMS as payment,
said Gregory Smith, manager of the Interior Department agency's RIK
MMS then will sell part of the delivered gas to the federal
General Services Administration to supply the energy needs of
federal facilities. The remainder will be sold in the spot market
in either monthly or term transactions, he noted. In fact, Smith
said MMS will post a monthly sale during the October bid week, and
possibly a five-month term sale for delivery to the ANR and NGPL
Currently, Smith estimated that MMS has 20 to 30 pre-qualified
buyers for its RIK natural gas. Most of them tend to be gas
marketers, he said, but the agency is seeing more and more interest
from end-users, especially utilities.
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