Southern California’s port city of Long Beach Wednesday narrowed its list of potential natural gas suppliers to six and will use the next six weeks to determine which companies it wants to pursue in contract negotiation early next year, according to the city’s municipal energy department that supplies gas and water to residents and electricity to city-operated facilities. Long Beach is seeking 10 Bcf of gas annually in one- to five-year contracts. Names of the short-listed suppliers are being kept confidential.

Fifteen suppliers responded last month to the city’s request for qualifications (RFQ), according to Alyce McCall, city energy services manage, who said the municipal utility department is now setting up meetings with the six short-listed companies between Dec. 15, 2002, and Jan. 15, 2003. Price and contract terms will be the principal criteria for paring down the shorter list in the second round, McCall said.

Criteria used to select the half-dozen remaining were that they all had to possess: (1) California gas experience, (2) utility experience, (3) interstate transportation capacity to the California-Arizona border, (4) storage in Southern California; (5) their own supplies; and (6) investment-grade credit status.

Historically, Long Beach has drawn about a third of its 13 Bcf annual usage from local supplies in what was once a very productive oil/gas field lying in and around the city, but a state government-backed 49 MW power plant in the nation’s busiest port, the combined Los Angeles-Long Beach harbors, has taken away the local city supplies, according to Chris Garner, Long Beach’s energy department head. He noted when the RFQs were released that the city is looking for one or more suppliers to provide its load, which is roughly a 50%-50% split between residential and commercial/industrial.

Although Long Beach wouldn’t verify any particular name on the short list, it was expected that Los Angeles-based Occidental Petroleum, which is developing the port power plant, is one of the bidders still in contention.

“The natural gas supplies (now going to the power plant) were our baseload volumes,” said Garner, who noted that when the power plant starts this month it will bypass the city utility system, taking its gas supplies directly from Oxy, which is the surviving member of an oil consortium that used to operate the oil production in Long Beach Harbor for the state. The power plant has the option of delivering its own gas or taking supplies from the city utility.

Any questions related to the ongoing RFQ can be directed to Long Beach’s McCall at: (562) 570-2060.

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