The Interior Department’s Minerals Management Service reported that there was heightened interest in its latest sale for royalty-in-kind (RIK) natural gas as the nation enters the winter heating season.

Approximately 387,000 MMBtu of RIK gas produced daily from federal leases in the Gulf of Mexico was sold to 10 companies during the agency’s winter sale, according to MMS. The gas will be delivered to 11 offshore pipeline systems originating in the Gulf, and is destined for consumer and industry use this winter. The sales are for five or 12-month terms with delivery beginning Nov. 1.

“The competition for this sale was extremely strong,” said MMS Director Johnnie Burton, noting that 97 bids were entered for the 14 individual gas sales packages.

The winning bidders were Sequent Energy Management, Dominion Field Services, Cargill Inc., Interstate Gas Supply, Louis Dreyfus Energy Services, Cinergy Marketing and Trading, Williams Power Co., AEP Gas Marketing, Bridgeline Gas Marketing and ChevronTexaco Natural Gas.

The packages from the sale, combined with packages already being delivered from a March 2004 RIK gas sale, will bring total deliveries to 560,000 MMBtu of federal royalty gas for sale beginning Nov. 1, the agency noted.

The MMS receives the gas from producers who, rather than pay in cash, pay their royalties with gas production. The agency then sells the gas, with the proceeds going into the federal coffers.

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