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Home My WebLink About1992-074e updocs\mobil ORDINANCE NO 9�2 -07!V AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, APPROVING AN INTERRUPTIBLE NATURAL GAS SALES AND PURCHASE AGREEMENT BETWEEN THE CITY OF DENTON AND MOBIL NATURAL GAS, INC FOR THE PURCHASE OF SPOT MARKET NATURAL GAS, AUTHORIZING THE EXPENDITURE OF FUNDS, AND PROVIDING FOR AN EFFECTIVE DATE WHEREAS, the City has a need for interruptible natural gas purchases to provide fuel for the Spencer Electrical Generating Station, and WHEREAS, the City could realize price savings by purchasing gas on the spot market, and WHEREAS, the City has solicited bids for one year contracts with spot market suppliers of natural gas, in accordance with Chapter 252 of the Local Government Code, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SE TIC ON I That 1t authorizes the Mayor to execute the attached Interruptible Natural Gas Sales and Purchase Agreement with Mobil Natural Gas, Inc providing for the purchase of spot market natural gas SECTION II That is authorizes the expenditure of funds in accordance with the terms of the Agreement SECTION III That this ordinance shall become effective imme- diately upon its passage and approval PASSED AND APPROVED this the _T_� day of , 1992 ATTEST: JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM DEBRA A DRAYOVITCH, CITY ATTORNEY BY Q' PAGE 2 Standard Contract Standard Contract City of Denton Utilities Interruptible Natural Gas Sales And Purchase Contract Agreement Date April 30, 1992 Mobil Natural Gas Inc (SELLER)a Delaware Corporation agrees to deliver and sell gas to the City of Denton Texas (Buver) and BUYER agrees to purchase and receive said natural gas from SELLER pursuant to the terms and conditions hereinafter set forth I DEFINITIONS The term 'Agreement shall mean this Interruptible Natural Gas Sales and Purchase Contract including Attachment A which is incorporated herein The term month shall mean a calendar month The term MMBtu shall mean one million (1 000000) british thermal units The term 'Receiving Pipeline shall mean the interstate intrastate or local distribution company immediately downstream of the Point Of Delivery The term Buyers Notice shall mean the letter agreement a form copy of which is attached hereto as Attachment A which may be executed by BUYER and SELLER from time to time and which shall bind BUYER and SELLER to particular transactions for the purchase and sale of natural gas in aLcordance with the terms thereof and this Agreement The term Point Of Delivery shall mean the location of the phvsical dLlivery to the Receiving Pipeline 2 rCRM The initial term will be one year from the date hereof and month to month thereafter subject to the right of either party to terminate this Contract on 30 days prior written notice to the other partv 3 PRICL AND PAYMENT OF COSTS AND TAXES PRIOR TO DFI WrRY On a monthly basis the price to be paid by BUYER for gas delivered by SELLER shall be specified on the Buyers Notice shown in Attachment A Prices shall include and SELLER shall be responsible for payment of all rovalties production taxes property taxes severance taxes purchaser taxes and all other taxes and license fees which attach to the gas prior to dehvery hereunder Prices shall also include and SELLER shall be responsiblL for payment of gathering and transportation Lharges to the Point Of Delivery payments or other charges thereon appliLable before the title of gas passes to BUYER at the Point Of Delivery BUYER shall pay transportation charges on the Receiving Pipeline downstream of the Point Of Delivery PAGE 18 4 QUANTITY AND POINTS OF DELIVERY Gas quantities and points of delivery will be specified on a monthly basis on the Buyers Notice as shown in Attachment A signed by BUYER and by SELLER Requests for bids submission of bids or preliminary correspondence will not act as a Buyer s Notice and shall not be the basis for gas deliveries under this contract SELLER shall deliver gas quantities consistent with the quantity Point Of Delivery Receiving Pipeline and dates as specified in the Buyers Notice from the BUYER 5 iIEST EFFORTS PERFORMANCE SELLER will make a best effort to deliver and BUYER best effort to receive the gas quantities as specified in the Buyer s Notice Either party may at any time curtail or interrupt service with no liability to either party The curtailing party will make diligent efforts to notify the other party of the situation within 48 hours 6 INCREASES IN QUANTITY AND CHANGES TO POINTS OF DFLIVERY BUYER may request increases to gas quantities or changes in points of delivery by specifying these requests in a revised Buyer s Notice" to the SELLER If accepted by SELLER SELLER shall male all arrangements needed to revise deliveries within 24 hours If SELLER wishes to increase gas quantities or change points of delivery he must notify BUYER and receive a revised Buyer s Notice signed by BUYER to do so 7 OVFR DELIVERIES If SELLER provides gas quantities for a month in excess of 4% above the quantities in the Buyer s Notice or at points of delivery not specified in the Buyers Notice BUYER shall have the right to refuse the quantities of gas and shall be exempt from any payments on those gas quantities SELLER shall be liable for any penalties or excess storage or transportation charges owed by the BUYER as a result of the SELLER s deliveries in excess of 4% of the Buyer s Nonce or at locations not specified in the Buyers Notice 8 GAS AND PRICE UNITS All gas quantities and prices shall be in MMBtu adjusted to 14 650 psi at a temperature of 60 degrees Fahrenheit with both Mcf and Btu free of water vapor (Dry) Prices will be in U S dollars 9 QUALITY AND PRESSURE The gas delivered by SELLER shall meet the pressure requirements and quality specifications of the Receiving Pipeline to rITI i SELLER warrants for itself its successors heirs and assigns title to all gas delivered and accepted by BUYER hereunder SELLER warrants it has the right and lawful authority to sell the gas and that such gas is free from liens encumbrances and claims of every kind SELLER shall indemnify and save BUYER harmless from all suns claims hens damages costs losses expenses and encumbrances of whatsoever nature arising out of claims of any or all persons to said gas or the title of said gas SELLER shall be in control and possession of and responsible for anv risk of loss damage claim liability or injury caused thereby until the gas has been delivered to the BUYER at the Point Of Delivery Title and risk of loss shall pass at the Point Of Delivery from SELLER to BUYER PAGE 19 if DETERMINING PAYMENT VOLUMES On approximately the 15th day following the end of each month of gas deliveries SELLER shall furnish BUYER a statement specifying volume delivered location and Receiving Pipeline If these volumes differ from BUYER's independent monitoring of deliveries or Receiving Pipelines records BUYER shall have the right to pay on the undisputed amount either (i) under protest or (11) upon final agreement being made on the delivered volumes by BUYER SELLER and Receiving Pipeline BUYER and SELLER shall have the right to later revise payment volumes as a result of additional or revised volumetric data from the Receiving Pipeline or other companies associated with the production sale storage or transportation of the gas 12 PAYMENT Within 15 days of receipt of the statement BUYER shall make payment to SELLER for the gas quantities as determined in Paragraph 11 Payments statements should be directed to BUYER at City of Denton Utilities Electric Production Division 1701 A Spencer Road Denton TX 76205 Alta Jim Thune Manager Electric Production 13 NOTIFICATION Communications regarding the performance of this contract shall be directed to SELLER Mobil Natural Gas Inc BUYER 12450 Greenspoint Drive Houston, TX 77060-1991 Attn Manager, Long Term Natural Gas Sales 14 PERFORMING NOMINATIONS City of Denton Utilities Electric Production Division 1701 A Spencer Road Denton TX 76205 Attn Jim Thune Manager Electric Production BUYER will be solely responsible for nomination of gas volumes to the Receiving Pipeline unless SELLER is given specific written authorisation from BUYER to perform these nominations SELLER shall be responsible for all necessary nominations to transporters and all others related to the supply of natural gas prior to Point Of Delivery 15 1 XCiIANGE OF GAS QUANTITY INFORMATION During the period of actual gas deliveries SELLER and BUYER shall make available to each other current estimates of gas flows at the Point(s) of delivery under this agreement for the purposes of nomination to others and the monitoring of actual gas quantities delivered If Seller is unable to provide current estimates of gas activity to BUYER SELLER will assist BUYER in obtaining said information from pipeline transporters processing plant operators well operators or upstream suppliers 16 60VFRNING STATE This agreement shall be construed pursuant to the laws of the State of Texas and venue for its e,onstruction and enforcement shall lie in the, courts of Dc nton Countv Texas PAGE 20 SELLER Mobil Natural Gas Sales(" BUYER W61 By /� C Title Manager, Long Term Natural Gas Sales BY Title Date April 30, 1992 Date — PAGE 21 BUYERS NOTICE GAS SALES AND PURCHASE AGREEMENT DATED Date Of Buyers Notice Buyers Notice Number BUYER SELLER Natural Gas purchase quantities for ALI volumes and prices are based on MMStu adjusted to 14 650 Dry Prices are in U S dollars Total MMSTU Price Dates For Point of Receiving MMBtu/Day For Period (S/MMBtu) Delivery Delivery Facility (14 650 D/D) (14 650 D/D) (14 650 D/D) Accepted And Agreed Accepted And Agreed (SELLER) (BUYER) Its Dated GASBID Dated I;lt"D�xa e e A