1992-075· ~pdoCs\~r~nJty
ORDINANCE NO ~
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 TRINITY PIPELINE, 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 lnterruptlble 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
SECTION I. That it authorizes the Mayor to execute the
attached Interruptlble Natural Gas Sales and Purchase Agreement
with Trinity Pipeline, Inc providing for the purchase of spot
market natural gas
SECTION II That it 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 approval1
PASSED AND APPROVED this the ~3' day of 7~ , 1992
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
PAGE 2
Standard
Contract
Standard Contract
City of Denton Utilities
Intcrruptlble Natural Gas Sales And Purchase Contract Agreement
Date Apri'l 2].~ ].992
Trinity Pipeline~ Inc (SELLER) a Texas CorporaUon
agrees to dehver and sell gas to the City of Denton Texas (Buyer) and BUYER agrees to purchase and receive
sa~d natural gas from SELLER pursuant to the terms and condluons hereinafter set forth
]. DEFINITIONS
The term Agreement shall mean thru Interruptlble Natural Gas Sales and Purchase Contract
including Attachment A which ~s ~ncorporated here~n
The term "month" shall mean a calendar month
The term MMBtu" shall mean one mflhon (1 000 000) bnush thermal umts
The term Recmwng P~pehne" shall mean the interstate ~ntrastate or local dmtnbut~on company
immediately downstream of the Point Of Delivery
The term "Buyers Not,ce shall mean the letter agreement a form copy of which ~s attached hereto
as Attachment A, which may be executed by BUYER and SELLER from t~me to ume and whtch shall
brad BUYER and SELLER to pamcular transacuons for the purchase and sale of natural gas m
accordance w~th the terms thereof and this Agreement
The term Point Of Dehvery shall mean the location of the phymcal dehvery to the Receiving
Plpehne
2 TERM
The lmtlal term will be one year from the date hereof and month to month thereafter subject to the
right of either party to terminate thru Contract on 30 day s pmor wmtten nonce to the other party
3 PRICE AND PAYMENT OF COSTS AND TAXES PRIOR TO DELIVERY
On a monthly basra, the pmce to be prod by BUYER for gas dehvered by SELLER shall be specified
on the Buyers Nouce" shown m Attachment A Prices shall include and SELLER shall be
responmble for payment of all royalties production taxes property taxes severance taxes purchaser
taxes, and all other taxes and license fees which attach to the gas prior to dehvery hereunder Pmces
shall also include and SELLER shall be responmble for payment of gathenng and transportation
charges to the Point Of Dehvery, payments or other charges thereon apphcable before the title of gas
passes to BUYER at the Point Of Dehvery BUYER shall pay transportauon charges on the
Recetwng Ptpehne, downstream of the Point Of Dehvery
PAGE 1
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 NoIIce from the BUYER
BEST 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 vnll make diligent efforts to notify the other party of the
situation within 48 hours
INCREASES IN QUANTITY AND CHANGES TO POINTS OF DELIVERY
BUYER may request increases to gas quantities or changes in points of delivery by specif~ng these
requests in a revised "Buyer's Notice" to the SELLER If accepted by SELLER SELLER shall make
all arrangements needed to revise deliveries within 24 hours If SELLER wishes to increase gas
quantmes or change points of dehvery, he must notify BUYER and receive a revised Buyers Notice
signed by BUYER to do so
OVER 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 Buyer s 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 Nouce or at locations not specified
In the "Buyer's Notice"
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 Mcr and Btu free of water vapor (Dry) Prices will be In U S dollars
QUALITY AND PRESSURE
The gas delivered by SELLER shall meet the pressure requirements and quality specifications of the
Receiving Pipeline
I0 TITLE
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 hens encumbrances and claims of every kind SELLER shall lndemmf~ and save
BUYER harmless from all suits claims liens 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 any 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 2
Il 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 momtormg of deliveries or Receiving Plpehne s records
BUYER shall have the right to pay on the undisputed amount either 0) under protest or (ii) upon
final agreement bemg made on the delivered volumes by BUYER, SELLER and Receiwng Pipeline
BUYER and SELLER shall have the right to later revise payment volumes as a result of additional
or revised volumetric data from the Recelxang Plpehne 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
quantltl~ as determined in Paragraph 11 Payment statements should be directed to BUYER at
City of Denton Utilities
Electric Production Division
1701 A Spencer Road
Denton, TX 76205
Atm Jim Thune,
Manager Electric Production
13 NOTIFICATION
Communications regarding the performance of this contract shall be directed to
SELLER Trinity Pipeline, Inc BUYER City of Denton Utilities
17101 Preston Rd Electric Production Div~sion
Suite 240, LB 122 1701 A Spencer Road
Dallas, Texas 75248 Denton TX 76205
Attn Jeff L Singleton Attn Jim Thune
Manager Electric Production
14 PERFORMING NOMINATIONS
BUYER will be solely responsible for nomination of gas volumes to the Receiving Pipeline, unless
SELLER is given specific written authorization 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 EXCIIANGE OF GAS QUANTITY INFORMATION
During the period of actual gas dehvenes 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 momtormg of actual gas quantities delivered If Seller is unable to
provide current estimates of gas acuwty to BUYER SELLER will assist BUYER in obtaining said
information from pipeline transporters processing plant operalors, well operators or upstream
suppliers
16 GOVERNING STATE
This agreement shall be construed pursuant to the laws of the State of Texas and venue for ~ts
construction and enforcement shall lie m the courts of Denton County Texas
PAGE 3
SELLER TRINITY PIPELINE, INC BUYER
By ~' F
Norman Berthueen
Title Vice President, Gas Supply Title
Date April 21, 1992 Date
PAGE 4
BUYERS #OTIr~
GA5 SALEB AND PURC~IAS~ AGR~T
DATED
Date Of 8~ers Not~ce
B~ers ~ot~ce
BUYER
SELLER
ALt voids a~ prices are ~s~ on HHB~u edjust~ to 1~ 650 Dry Prices are m U S do~ars
Tot6[ HHBTU Prtce
Dates For Potnt of Receiving HHBtU/Day For Perl~ ($/HHBtu)
OeL~very ~e~fverv ~ac~Jty (~4,650 D/D) ;1~ 650 D/D) (1~.650 D/O)
Accepted And Agreed Accepted And Agreed
(SELLER) (BUYER)
Zts
Dated Dated
GASBID
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