1992-074e ~pdocs\mobi [
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 Clty 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 b~ds for one year contracts
w~th spot market suppllers of natural gas, in accordance wlth
Chapter 252 of the Local Government Code, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
S~TION I That it 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 ~s authorizes the expendlture of funds in
accordance with the terms of the Agreement
SECTION III That this ordinance shall become effective ~mme-
d~ately upon lts passage and approval
PA~SED AND APPROVED this the ~day of ~ , 1992
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
PAGE 2
Standard
Contraot
Standard Contract
City of Denton Utilities
Interruptlble Natural Gas Sales And Purchase Contract Agreement
Date April 30. 1992
Mobil Natural Gas Inc (SELLER) a. Delaware Corporation
agrees to dehver and sell gas to the City of Denton Texas (Buyer) and BUYER agrees to purchase and receive
said natural gas from SELLER pursuant to the terms and conditions hereinafter set forth
l DEFINITIONS
The term 'Agreement shall mean th~s lnterrupuble Natural Gas Sales and Purchase Contract
tncludmg Attachment A which is Incorporated hereto
The term month shall mean a calendar month
The term MMBtu shall mean one mflhon (1 000000) brmsh thermal umts
The term 'Receiving P~pehne shall mean the interstate intrastate or local d~stnbuuon company
~mmedmtely downstream of the Point Of Dehvery
The term Buyers Nouce 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 t~me to ume and whtch shall
brad BUYER and SELLER to particular transacuons for the purchase and sale of natural gas m
accordance w~th the terms thereof and th~s Agreement
The term Point Of Dehvery shall mean the locatmn of the physical dchvery to the Receiving
Plpehne
2 tERM
The imtlal term will be one year from the date hereof and month to month thereafter sublect lo the
right of either party to terminate this Contract on 30 day s prior written nonce to the other party
~ PRICL AND PAYMENT OF COSTS AND TAXES PRIOR TO DFI IVFRY
On a monthly basis the price to be prod by BUYER for gas dehvered by SELLER shall be specified
on the Buyers Notice shown m Attachment A Prices shall include and SELLER shall be
responsible lor payment of all royalties production taxes property taxes severance laxes purchaser
taxes and all other taxes and license fees which attach to the gas puor to dehverv hereunder Prices
shall also include and SELLER shall be responsible For payment of gathering and transportation
charges to the Pmnt Of Dehvery payments or other charges thereon apphcable before the title of gas
passes to BUYER at the Point Of Delivery BUYER shall pay transportauon charges on the
Receiving Plpehne downstream of the Point Of Dchvcrv
PAGE 18
QUANTITY AND POINTS OF DELIVERY
Gas quantities and points of delivery will be specified on a monthly basis on the Buyers Nouce as
shown m Attachment A s~gned by BUYER and by SELLER Requests for bids subm~ssmn of bids
or prehm~nary correspondence will not act as a Buyer s Notice and shall not be the bas~s for gas
dehvenes under thls contract SELLER shall dehver gas quanut~es consistent w~th the quantity Point
Of Delivery Receiving Ptpehne and dates as specified in the Buyers Notlce from the BUYER
BEST EFFORTS PERFORMANCE
SELLER will make a best effort to dehver and BUYER best effort to receive the gas quantities as
specified in the Buyer s Not,ce Either party may at any time curtail or interrupt service with no
liability to etther party The curtailing party will make diligent efforts to notify the other party of the
situation within 48 hours
INCREASES IN QUANTITY AND CIIANGES TO POINTS OF DFLIVERY
BUYER may request increases to gas quantities or changes In points of delivery by specifying these
requests m a revised Buyer s Notice" to the SELLER If accepted by SELLER SELLER shall make
all arrangements needed to revise deliveries w~thtn 24 hours If SELLER w~shes to increase gas
quantlnes or change points of delivery he must notify BUYER and receive a revised Buyer s Notice
signed by BUYER to do so
OVFR DELIVERIES
If SELLER provides gas quantities for a month in excess of 4% above the quantities in the Buyer s
Not~ce or at points of dehvery not specified m the Buyers Not~ce BU'~R shall have the right to
refuse the quant~tms of gas and shall be exempt from any payments on those gas quantities SELLER
shall be liable for any penalnes or excess storage or transportation charges owed by the BUYER as
a result of the SELLER s dehveries in excess of 4% of the Buyer s Notice or at locations not specified
in the Buyer s Notice
(,Ab AND PRICE UNITS
All gas quantities and prices shall be m 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 m U S dollars
QUALITY AND PRESSURE
The gas delivered by SELLER shall meet the pressure reqmrements and quality specifications of the
Receiving Pipeline
FITI I
SELLER ~varrants for Itself its successors heirs and assigns title to all gas delivered and accepted
by BUYER hereunder SELLER warrants ~t has Ihe right and lawful authority to, sell the gas and that
such gas is free from liens encumbrances and clalm~ of every kind SELLER shall indemnify and save
BUYER harmless from all suits clmms liens damages costs losses expenses and encumbrances of
whatsoever nature arising out of claims of any or all persons to smd gas or the title of said gas
SELLER shall be m control and possession of and responsible for any risk of loss damage claim
habihtv or injury caused thereby until the gas has been delivered to the BUYER at the Point Of
Delivery Title and risk of loss ~hall pass at the Point Of Dchvery from SELLER lo BUYER
PAGE 19
l I DETERMINING PAYMENT VOLUMES
On approxtmately thc 15th day followmg the end of each month of gas dehvcrtes SELLER shall
furmsh BUYER a statement specifying volume delivered location and Receiving Pipeline If these
volumes differ from BUYER's independent monitoring of deliveries or Receiving PIpehne s records
BUYER shall have the right to pay on the undisputed amount either (0 under protest or (n) upon
final agreement being made on the dehvered volumes by BUYER SELLER and Recmvmg Pipeline
BUYER and SELLER shall have the right to later revise payment volumes as a result of additional
or revised volumetrlc data from the Receiving Plpehne or other companies associated with thc
production sale storage or transportation of the gas
1.2 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
Aim Jim Thune
Manager Electric Production
13 NOTIFICATION
Communications regarding the performance of this contract shall be directed to
SELLER Mobil Natural Gas Inc BUYER City of Denton Utilities
12450 Greenspolnt Drive Electric Production Division
Houston, TX 77060-1991 1701 A Spencer Road
Attn Manager, Long Term Denton TX 76205
Natural Gas Sales Atm J,m Thune
Manager Electric Production
14 PERFORMING NOMINATIONS
BUYER will be solely responsible for nomination of gas volumes to thc Recezvmg 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 I 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 quantlueS dchvered If Seller is unable to
provide current estimates of gas activity to BUYER SELLER will assist BUYER m obtaining said
reformation from plpehne transporters processing plant operalors well operators or upstream
~upphers
16 (,OVFRNING STAI'E
This agreement shall be construed pursuant to lhe laws of the State of Texas and venue for its
co~lslructlon and enforcement shall he in Ibc courts of Denton County Texas
PAGE 2 0
SELLER Mobil Natural Gas Sales('~ BUYER
T~tle Manager, Long Term Natural Title 7/'~
Gas Sales
PAGE 21
BUYERS NOTICE
GAS ~ALES AND PURCHASE AGREENE#T
DATED
Date Of Buyers Notice
SELLER
ALt volumes and prices are based on NMStu adjusted to 14 650 Dry Prices are In U S dot[ars
DeLivery DeLivery FaciLity (14 650 D/D} (14 650 O/O~ (14 650 D/D)
Accepted And Agreed Accepted And Agreed
(SELLER) (BUYER)
Its
Dated Dated
GASBIO
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