The Long Beach, CA, city-run energy department Tuesday finalized a new, three-year natural gas supply deal with Shell’s gas marketing arm, Coral, providing about 5 Bcf annually beginning April 1, according the city’s energy services manager, Alyce McCall.

The city council’s approval of the contract ended a five-month process that began with 15 suppliers expressing interest. Coral is the current supplier under an 18-month deal.

There are also provisions in the contract for supplying up to another 3.5 Bcf in supplies tied to the California border prices. The base 5 Bcf will be provided along the lines of Coral’s current contract, tied to San Juan Basin prices, with $3/MMBtu as a year-round floor and $10/MMBtu as a winter cap.

After historically having about one-third of its 13 Bcf annual send-out available from local production, the port city with a combination natural gas-water muni that has added power buying for city facilities, originally went into the market last fall looking for up to 10 Bcf annually and deals as long as five years.

Long Beach has an ongoing transportation deal with Southern California Gas Co.for capacity on its backbone in-state transmission pipeline system, and as of April 1 it will have a new deal with the neighboring private sector utility for 1.08 Bcf of underground storage that can be cycled twice annually, using 36 MMcf/d withdrawal and 7.2 MMcf/d injection parameters, McCall said.

Coral, along with BP and Occidental Petroleum, had been short-listed in February as part of the final phase of the bidding process to supply this city of nearly a half-million residents 25 miles southeast of downtown Los Angeles. The city utility has a roughly 50-50 split between residential and commercial/industrial customers.

Initially, Occidental was thought to have the inside track because it is developing a 49 MW, state-mandated power plant in Long Beach Harbor, which combined with adjacent Los Angeles Harbor comprises the busiest port in the United States. The power plant is expected to take away much of the local gas the city municipal distribution utility had counted on from local production.

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