Notice Text:

Subject: Request for Bids to Buy Gas on a Firm Basis from Transco

Pursuant to Section 43 of the General Terms and Conditions of Transcontinental Gas Pipe Line Company, LLC’s (“Transco”) FERC Gas Tariff, Transco is soliciting bids for the sale by Transco of up to 25,000 MMBtu/day of natural gas during the period from July 1, 2018 through July 31, 2018 (“Contract Period”).

Pertinent details are as follows:

The point of receipt for such gas shall be Transco’s SMG location (location number 1095564) at Station 65 located on Transco’s Mainline in St. Helena Parish, Louisiana.

The Purchaser (as defined in the Firm Gas Sale Agreement) shall be responsible for arranging and paying for all transportation, including all applicable surcharges and fuel, from the SMG location to the delivery location.

Only fixed price bids will be considered. 

No partial period bids will be considered.

Bids for partial quantities (i.e., less than 25,000 MMBtu/day), but for no less than 5,000 MMBtu/day, will be considered.

Under certain bid conditions, Transco may desire to sell less than the full quantity bid.  Bids should, therefore, indicate what minimum portion of potential Purchaser’s bid quantity may be accepted by Transco.

The sale will be made by Transco on a firm basis.  The quantity of gas received on any day during the Contract Period may vary by up to ten percent (10%) of the accepted daily bid quantity provided that Purchaser’s total receipts during the Contract Period shall equal the product of the daily contract quantity and the number of days in the Contract Period.  In the event Purchaser fails to meet all purchase obligations to Transco during the Contract Period, the price shall be increased in accordance with the terms of the Firm Gas Sale Agreement.

Transco's Firm Gas Sale Agreement, without modification or any other conditions of any sort, must be used.  This request for bids contains only a summary of the terms that apply to this transaction.  A copy of the Firm Gas Sale Agreement is attached below.

Potential Purchasers should be aware that Section 43 of the General Terms and Conditions, Transco FERC Gas Tariff requires, in part, as follows:

All parties wishing to bid must:

(a) be pre-approved as meeting Transco's creditworthiness requirements in accordance with Section 32 of the General Terms and Conditions of Transco’s FERC Gas Tariff; and

(b) have a currently effective, executed transportation service agreement(s) to receive gas at the location of the sale. 

Only those bids actually received by Transco by no later than 10:00 a.m. CCT on June 22, 2018 will be considered.   

Purchaser(s) shall be selected based upon the highest priced bid(s).  In the case of ties, Transco will select the winning bid(s) based on a random and blind selection process.  Winning Purchaser(s) will be notified by no later than 12:00 p.m. CCT on June 22, 2018.  However, Transco reserves the right to refuse any and/or all bids, if deemed unacceptable. Click here for Bid Form.

Any questions should be directed to Laurie Catlett at (713)215-4356 or Suzie Heiser at (713)215-4626.

FIRM GAS SALE AGREEMENT

FOR

SYSTEM MANAGEMENT GAS

                    THIS AGREEMENT is entered into as of the        day of                     , 2018, between Transcontinental Gas Pipe Line Company, LLC, hereinafter referred to as "Transco", and XXXX hereinafter referred to as "Purchaser".

W I T N E S S E T H:

                    WHEREAS, pursuant to Section 43 of the General Terms and Conditions of Transco’s FERC Gas Tariff, Transco is permitted to sell  system management gas (“SMG”) in the event that conditions exist which threaten the operational integrity of Transco’s system; and

                    WHEREAS, Purchaser in response to and in accordance with Transco’s request for bids pursuant to Section 43, submitted a bid to purchase on a firm basis, pursuant to the terms of this Agreement, a daily quantity of that natural gas during the period from July 1, 2018 through July 31, 2018; and

                    WHEREAS, Transco has accepted Purchaser’s offer and desires to sell on a firm basis, pursuant to the terms of this Agreement, such daily quantity of natural gas;

                    NOW THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereby agree as follows:

ARTICLE I.

DEFINITIONS

                    The following words and terms wherever used in this Agreement shall have the following meaning:

                    A.   "BTU" shall mean British Thermal Unit; "MMBtu" shall mean one million (1,000,000) British Thermal Units.

                    B.   "Contract Period" shall mean that thirty-one (31) Day period beginning at 9:00 a.m. CCT on July 1, 2018 and ending at 9:00 a.m. CCT on August 1, 2018.

                    C.   "Contract Price" shall mean that price per MMBtu set forth in Article III below.

                    D.   "Daily Contract Quantity" shall mean XXXX MMBtu of natural gas per Day.

                    E.   "Day" shall mean a period beginning at 9:00 A.M. CCT on a calendar day and ending at 9:00 A.M. CCT on the next calendar day.

                    F.   "Receipt Point" shall mean Transco's SMG Location No. 1095564 at Station 65 located on Transco’s Mainline in St. Helena Parish, Louisiana.

                    G.   "Gas" or "natural gas" shall mean merchantable natural gas that meets or exceeds specifications for gas to be transported pursuant to Transco’s FERC Gas Tariff, including, but not limited to, quality and temperature.

                    H.   "Schedule" or "scheduled" shall refer to the act of Transco and Purchaser of notifying, requesting, and confirming to each other the quantity of gas to be received by Purchaser hereunder on any given Day during the Contract Period.

                    I.   "Firm" shall mean that either party may interrupt its performance without liability only to the extent that such performance is prevented for reasons of Force Majeure.

ARTICLE II.

QUANTITY

                    A.   Subject to Paragraph B below, Transco agrees to sell and deliver at the Receipt Point on a firm basis and Purchaser agrees to receive and purchase at the Receipt Point on a firm basis, on each Day of the Contract Period, the Daily Contract Quantity.

                    B.   Purchaser’s receipts of gas on any one Day may vary by up to ten percent (10%) of the Daily Contract Quantity, or such other variance as the parties may mutually agree to from time to time, provided that Purchaser’s total receipts during the Contract Period shall equal the product of the Daily Contract Quantity and thirty-one Days (the number of Days in the Contract Period) and further provided that Purchaser shall schedule in advance the quantities to be received on any Day and complies with Transco’s nomination and scheduling deadlines.

                     C.   Subject to the tolerances set forth in the preceding paragraph, Purchaser is obligated to schedule, or cause to be scheduled, and to receive, or cause to be received from Transco at the Receipt Point, (1) on a daily basis, the Daily Contract Quantity of Gas, and (2) on a monthly basis, the product of the Daily Contract Quantity and the number of Days in the Contract Period.  If Purchaser fails to satisfy such obligation and Transco’s Replacement Price, as defined below, is less than the Contract Price, then Purchaser shall be liable for and shall pay to Transco the sum of (a) a dollar amount equal to the product of (i) the difference between the Replacement Price and the Contract Price multiplied by (ii) the difference between the quantity of gas which Purchaser was obligated to receive and the quantities actually received by Purchaser at the Receipt Point and (b) a dollar amount equal to any other costs which Transco in good faith incurs in selling the gas.  The "Replacement Price" shall be the price at which Transco, acting in good faith, is able to sell comparable supplies.  The foregoing shall not be Transco’s sole remedy for Purchaser’s failure to satisfy its obligations hereunder, and shall be in addition to any and all other rights and remedies available to Transco. The sole and exclusive remedy for Purchaser in the event of breach of this Agreement by Transco shall be the remedy set out in the “Cover Standard” Section 3.2(ii) (“in the event of breach by Seller”) of the Base Contract for Sale and Purchase of Natural Gas referenced in the 2006 NAESB Standard 6.3.1.

                    D.   Purchaser recognizes that Transco is both the seller of gas pursuant to this Agreement and is the pipeline delivering gas at the Receipt Point.  Purchaser shall obtain transportation from the Receipt Point, and it is Purchaser’s obligation to arrange transportation on Transco’s pipeline, and on any downstream pipelines, which is necessary and adequate to effectuate receipt at the Receipt Point of the quantities of gas which Purchaser is required herein to receive.  Purchaser’s receipt obligations hereunder shall not be satisfied unless such gas is received by Purchaser or for Purchaser’s account at the Receipt Point in accordance with Transco’s normal practices as a transporter of gas.  All nominations for receipt will be scheduled in accordance with Transco’s applicable transportation nomination and allocation deadlines.

ARTICLE III.

PRICE

                    A.   The Contract Price payable for all gas delivered and received in accordance with the terms of this Agreement shall be $XXXX per MMBtu.

                    B.   Transco is selling gas under this Agreement in order to decrease its overall physical system inventory.  Purchaser recognizes that, even if gas is accounted for as being received at the Receipt Point hereunder pursuant to the terms of Transco's transportation rate schedules and the service agreements executed thereunder, Transco’s purpose under this Agreement of decreasing its overall physical system inventory will not be achieved unless gas is physically delivered out of Transco’s system.  Therefore, in the event that Purchaser has a positive (i.e. total receipts exceed total deliveries) net gas imbalance under any of its transportation service agreements with Transco during the Contract Period, the price per MMBtu for all gas delivered and received under this Agreement shall be increased to the weighted average cash-out Sell price paid by all buyers in the zone for imbalances during the Contract Period pursuant to Section 37 of Transco’s FERC Gas Tariff, plus ten cents per MMBtu. 

                    C.  Transco shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any governmental authority (“Taxes”) on or with respect to the gas prior to Purchaser’s receipt of gas at the Receipt Point.  Purchaser shall pay or cause to be paid all Taxes on or with respect to the Gas upon or after Purchaser’s receipt of gas at the Receipt Point, including all sales or gross receipts taxes.

ARTICLE IV.

QUALITY OF GAS

                    The gas received hereunder shall be merchantable natural gas that meets or exceeds the specifications for gas to be transported pursuant to Transco’s FERC Gas Tariff, including, but not limited to, quality and temperature.

ARTICLE V.

METERING AND MEASUREMENT

                    The volume of gas received hereunder shall be the volume of gas measured and allocated as received from Transco at the Receipt Point in compliance with Transco’s generally applicable measurement and allocation requirements and practices.

ARTICLE VI.

TITLE AND LIABILITY

                    A.  Title to, possession of, and risk of loss of gas shall pass from Transco to Purchaser at the Receipt Point.

                    B.   As between the parties hereto, Transco shall be in exclusive control and possession of the gas and responsible for any damage or injury caused thereby until same shall have been received by Purchaser or for Purchaser’s account at the Receipt Point, after which receipt Purchaser shall be deemed to be in exclusive control and possession thereof and responsible for any injury or damage caused thereby.

                    C.   Transco warrants that Transco has good title to all gas so delivered, that Transco has the right to sell such gas to Purchaser, and that such gas shall be free from all liens, encumbrances, and claims.

ARTICLE VII.

BILLING AND PAYMENT

                    A.   On or before the tenth (10th) Day of the month following the Contract Period, Transco shall render a statement to Purchaser or Purchaser’s representative, if such is appointed by Purchaser, showing the amount of gas received by Purchaser during the Contract Period, together with an invoice in the amount due therefor.

                    B.   If Purchaser fails to remit the full amount payable by it when due, interest on the unpaid portion shall accrue at a rate equal to the  interest rate as defined in the Federal Energy Regulatory Commission’s Code of Federal Regulations Section 18CFR154.501d(1).

                     C.   The parties shall have the right, upon reasonable notice and at reasonable times, to examine the books and records of the other to the extent reasonably necessary to verify the accuracy of any statement, payment demand, charge, payment, or computation made under this Agreement; provided, however, that any such audit and any claim based upon errors in any statement, payment demand, charge, payment or computation must be made within one (1) year of the date of such statement.

ARTICLE VIII.

NOTICES

                    All billings, payments, statements, notices, and communications made pursuant to this Agreement shall be made as follows:

                                                            TRANSCO

                                                            Transcontinental Gas Pipe Line Company, LLC

                                                            P.O. Box 1396

                                                            Houston, Texas  77251-1396

                                                            Attention: Transportation Marketing Group

                                                            Telephone:  (713) 215-4626 or (713) 215-4356

                                                            Facsimile:   (713) 215-4608

                                                            PURCHASER

                                                            Company

                                                            Address

                                                            Address

                                                            Attention:

                                                            Telephone:                                                     

                                                            Facsimile: 

                    Either party may modify any information specified above by written notice to the other party.

ARTICLE IX.

FINANCIAL RESPONSIBILITY

                    A.   Should the creditworthiness or financial responsibility of either party become unsatisfactory to the other party at any time during which this Agreement is in effect, satisfactory security may be required before further deliveries are made.  In the event either party shall (i) make an assignment or any general arrangement for the benefit of creditors; (ii) default in the payment or performance of any obligation to the other party under this Agreement; (iii) file a petition or otherwise commence, authorize, or acquiesce in the commencement of a proceeding or cause under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iv) otherwise become bankrupt or insolvent (however evidenced); (v) be unable to pay its debts as they fall due; or (vi) fail to give adequate security for or assurance of its ability to perform its further obligations under this Agreement within forty-eight (48) hours of a reasonable request by the other party, then the other party shall have the right to withhold or suspend deliveries or terminate this Agreement without further notice, in addition to any and all other remedies available hereunder or pursuant to law.

                    B.   Each party reserves to itself all rights, set-offs, counterclaims, and other defenses which it is or may be entitled to arising from or out of this Agreement.

ARTICLE X.

FORCE MAJEURE

                    A.   Except with regard to a party's obligation to make payments due under this Agreement, in the event either party hereto is rendered unable, wholly or in part, by force majeure to carry out its obligations under this Agreement, it is agreed that upon such party's giving notice and full particulars of such force majeure as soon as reasonably possible, such notice to be confirmed in writing or by facsimile to the other party, after the occurrence of the cause relied on, then the obligations of the party giving such notice, insofar as they are affected by such force majeure, from its inception, shall be suspended during the continuance of any inability so caused but for no longer period.

                    B.   The term "force majeure" as employed in this Agreement shall have the same meaning as set forth in Section 11.1 of the General Terms and Conditions of Transco’s FERC Gas Tariff.

                    C.   Notwithstanding the foregoing Section B of this Article X, the term "force  majeure" as employed in this Agreement specifically excludes the following occurrences or events:  the loss, interruption, or curtailment of interruptible transportation on any transporter necessary to effect receipt or delivery of gas hereunder, unless the same event also curtails firm transportation on the same pipeline segment, to the extent firm transportation is available on the affected pipeline segment; and  loss of markets.

                    D.   It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulty, and that the above requirement of the use of diligence in restoring normal operating conditions shall not require the settlement of strikes or lockouts by acceding to the terms of the opposing party when such course is inadvisable in the discretion of the party having the difficulty.

ARTICLE XI.

TERM

                    The term of this Agreement shall commence at 9:00 a.m. CCT, July 1, 2018 and shall continue until 9:00 a.m. CCT on August 1, 2018.

ARTICLE XII.

MISCELLANEOUS

                    A.   This Agreement constitutes the entire agreement between the parties hereto.   There are no prior or contemporaneous agreements or representations affecting such subject matter other than those expressed in this Agreement.

                    B.   No modification or change herein shall be enforceable, except as specifically provided for in this Agreement, unless reduced to writing and executed by both parties.

                     C.   No assignment of this Agreement or any of the rights or obligations hereunder shall be made by either party unless the other party has consented in writing thereto, which consent shall not be unreasonably withheld.

                    D.   This Agreement is for the sole and exclusive benefit of the parties hereto.  Nothing expressed or implied herein is intended to benefit any other person, firm or corporation not a party hereto.

                    E.   No waiver by either party hereto of any one or more defaults by the other in the performance of any of the provisions of this Agreement shall operate or be construed as a waiver of any other default or defaults whether of a like kind or different nature.

                    F.   THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED,  ENFORCED, AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

                    G.   The heading used for the Articles herein are for convenience and reference purposes only and shall in  no way affect the meaning or interpretation of the provisions of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.

                                                            TRANSCONTINENTAL GAS PIPE LINE

                                                            COMPANY, LLC

                                                            By _____________________________________

                                                            Hector Alatorre

                                                            Director, Customer Services 

                                                            [PURCHASER]

                                                            By ______________________________________

                                                            Print Name  _______________________________

                                                            Title _____________________________________