As part of the agency’s royalty-in-kind (RIK) program, the Minerals Management Service (MMS) has requested written offers to purchase 387,000 MMBtu/d of royalty gas produced from federal leases in the Gulf of Mexico. The production is delivered into 11 offshore pipeline systems, including ANR Nearshore, Columbia Gulf Bluewater, Central Texas Gathering System, Garden Banks, Mississippi Canyon, Matagorda Offshore Pipeline System, Seagull Shoreline, Stingray, Tennessee Gas 800 Leg, Tetco East Louisiana and the Transco Southeast Lateral. MMS said it may award a contract on the basis of the initial offer received without discussion. Accordingly, each initial offer should be submitted on the most favorable terms that the offerer can submit. However, MMS may negotiate with offerers in the event offers of similar or unanticipated value are received. MMS said the Henry Hub and/or Nymex are preferred indices on all packages in addition to the named indices. Initial deliveries of royalty gas to the buyer will commence on Nov. 1. The royalty gas delivery period will be for a term of five months ending March 31, 2005 or 12 months ending Oct. 31, 2005, depending on the value of offers received. Written offers can be submitted via facsimile at (303)-231-3846 by 11 a.m. (CT) on Oct. 6. The agency said it will award the offers by 3:00 p.m. on Oct. 7. For more information, contact Mike DeBerard at (303)-231-3884, Karen Bigelow at (303)-231-3890, or Jeff Olson at (303)-231-3225. The MMS-implemented RIK program generates revenues through receiving oil and gas royalties in kind, rather than in cash, and competitively selling the commodities in the marketplace.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.