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Notice of Open Season 131
OS131 - LONG TERM FIRM STORAGE and TRANSPORTATION CAPACITY

STATUS IS:
CLOSED

POSTED: 11/2/2007
TERM:11/2/2007
- 12/13/2007
Contracts will be tendered to successful bidders.

National Fuel Gas Supply Corporation

 

OS131 – LONG TERM FIRM STORAGE and TRANSPORTATION CAPACITY

 

 

CAPACITY

National Fuel Gas Supply Corporation (“National Fuel”) is pleased to announce the availability of up to 2,138,583 Dth of firm storage service and associated firm transportation service.

 

1,520,583 Dth of storage capacity (“Existing Storage Capacity”) may be received or delivered at existing available National Fuel points, as well as to Empire at Pendleton where firm transportation deliveries will be possible following the construction of compression facilities by Empire Pipeline at the Pendleton interconnect.

 

An additional 618,000 Dth of incremental storage capacity (“Expansion Storage Capacity”) - for a total of 2,138,583 Dth , may be received or delivered to Millennium @ Corning and/or Empire @ Corning (“Corning Points”) following the completion of necessary pipeline and storage facilities.

 

 

OPEN SEASON TIME FRAME:

 

Commences November 2, 2007 and extends until 11:00 a.m. (EST) on December 13, 2007.

 

 

INJECTION AND WITHDRAWAL RIGHTS:

 

Existing Storage Capacity (76-day service): Injection and withdrawal rights associated with Firm Storage Service (“FSS”) and Firm Storage Transportation Service (“FST”) delivered to existing available National Fuel points, as well as Empire @ Pendleton:

 

 

 

 

Maximum Storage Quantity (“MSQ”): 1,520,583 Dth

Maximum Daily Injection Quantity: 11,000 Dth/Day

Maximum Daily Withdrawal Quantity: 20,000 Dth/Day

 

Injection Period

Inventory Level

Injection Limit

April 1 to October 31

0% to 85%

84% to 100%

 

1/139 of MSQ

1/431 of MSQ

 

Withdrawal Period

Inventory Level

Withdrawal Limit

November 1 to March 31

 

100% - 38%

37% - 21%

20% - 0%

 

1/76 of MSQ

1/88 of MSQ

1/259 of MSQ

 

 

 

 

 

Expansion Storage Capacity (17-day service equivalent): Injection and withdrawal rights for this service delivered to/from Corning points:

 

 

 

Maximum Storage Quantity (“MSQ”): 618,000 Dth

Maximum Daily Injection Quantity: 4,352 Dth/Day

Maximum Daily Withdrawal Quantity: 36,000 Dth/Day

 

Injection Period

Inventory Level

Injection Limit

April 1 to October 31

 

0% to 83%

84% to 95%

96% to 100%

 

 

1/142 of MSQ

1/280 of MSQ

1/607 of MSQ

Withdrawal Period

Inventory Level

Withdrawal Limit

November 1 to March 31

 

100% to 40%

40% to 20%

20% to 0%

 

 

1/17 of MSQ

1/38 of MSQ

1/103 of MSQ

 

 

 

 

 

 

 

Existing PLUS Expansion Storage Capacity (38-day equivalent): Injection and withdrawal rights for this service delivered to/from Corning points:

 

 

 

 

Maximum Storage Quantity (“MSQ”): 2,138,583 Dth

Maximum Daily Injection Quantity: 15,060 Dth/Day

Maximum Daily Withdrawal Quantity: 56,000 Dth/Day

 

Injection Period

Inventory Level

Injection Limit

April 1 to October 31

 

 

0% to 83%

84% to 95%

96% to 100%

 

1/142 of MSQ

1/280 of MSQ

1/607 of MSQ

 

Withdrawal Period

Inventory Level

Withdrawal Limit

November 1 to March 31

100% to 66%

65% to 44%

43% to 14%

13% to 0%

 

1/38 of MSQ

1/60 of MSQ

1/124 of MSQ

1/356 of MSQ

 

 

PRIMARY RECEIPT & DELIVERY POINT TABLE:

 

The transportation primary injection receipt and primary withdrawal delivery points available in this Open Season are listed below. For points requiring facilities, bidders may select interim primary injection and withdrawal points.

 

Pipeline

 

Meter Name

 

Injection

 

Withdrawal

Millennium

Corning

April 1, 2010

Nov 1, 2010*

Empire

Corning

April 1, 2010

Nov 1, 2010*

Empire

Pendleton

June 1, 2009 **

Nov 1, 2009

Points listed below are available April 1, 2008 and are indicated with an “X” as applicable.

Dominion

Ellisburg

X

X

TCPL

Niagara

 

X

Columbia

Ellwood City

 

X

Columbia/Millennium

Independence

X

X^

Columbia

Lewis Run

 

X

Columbia of PA

Warren

 

X

Eastern Nat.

Eastern Natural

 

X

NFGDC

Mercer

 

X

NFGDC

Erie Control

 

X

NFGDC

Mineral Springs

 

X

NFGDC

Vicksburg

 

X

NFGDC

Zoar

 

X

Peoples

Peoples City Gate

 

X

TGP

Andrews Settlement

X

X

TGP

East Aurora

X

X

TGP

Rose Lake

X

X

 

Falcon Seaboard

 

X

 

Handsome Lake

 

X

 

Highland Land & Minerals

 

X

 

Kane Gas City Gate

 

X

 

Myers Gas Company

 

X

 

Northeast Heat & Light

 

X

 

Pa General Energy

 

X

 

United Refining

 

X

Transco Wharton/Leidy
X
 

Seneca

Red House

 

X

Wycatt

Ashford Hollow

 

X

Equitrans

Three Rivers

 

X

 

* Shippers selecting a Corning point for primary withdrawals MUST select a Corning point for primary injections.

**Subject to Concord Station compression expansion as part of OS 130.

^ Installation of facilities at interconnect may be at shipper's expense.  Please contact your Marketing Representative prior to bid submission for further details. 

COMMENCEMENT OF SERVICE:

 

Receipts and Deliveries to Millennium @ Corning and/or Empire @ Corning:

An expansion of National Fuel's pipeline system from Tuscarora to Corning is required to receive and/or deliver gas to Corning. Also, the Expansion Storage Capacity of 618,000 Dth, along with additional deliverability, can be made available following the construction of storage facilities at National Fuel's Tuscarora field.

 

Subject to receiving a sufficient level of commitments, and following receipt of required government approvals and other necessary authorizations, and dependent upon the completion of required facilities , (storage) transportation service from Tuscarora to Corning is anticipated to be available April 1, 2010. The 618,000 Dth of Expansion Storage Capacity is anticipated for April 1, 2010 as well. Bidders interested in Corning receipts/deliveries must request a start date no later than April 1, 2010 for bid valuation purposes. Bidders may request a start date earlier than April 1, 2010 (but no earlier than April 1, 2008) by designating an alternate interim primary injection and/or primary withdrawal delivery point until April 1, 2010 for the Existing Storage Capacity. That is, interested parties may bid such that their initial FSS/FST services may be amended with an injection or withdrawal delivery point change, capacity and deliverability changes, and a term extension (consistent with bidder's total proposed term) upon completion of facilities.

 

In Precedent Agreement(s) with successful bidders under this section, Transporter plans to propose an FST incremental transportation rate of approximately $7.600 per Dth/day applicable to FST transportation to/from Corning, to cover the cost of Tuscarora to Corning pipeline facilities, subject to FERC approval. This rate is applicable for transportation of both the Existing and Expansion Storage capacity and is based on an estimate of facility costs. National Fuel reserves the right to adjust the rate based on detailed engineering and/or actual costs, and reserves the right to determine the project's economic viability based on the level of interest.

 

Receipts and Deliveries to Empire @ Pendleton:

Incremental compression facilities at Pendleton, to be constructed by Empire Pipeline, are required in order to accommodate FST primary deliveries from National Fuel to Empire at Pendleton.

 

Based on preliminary estimates, FST service to Pendleton via the incremental facilities above is anticipated to be available November 1, 2009, subject to shipper reaching agreement with Empire Pipeline for the construction of the required compression.

 

Bidders requesting Pendleton deliveries must request a start date no later than November 1, 2009 for bid valuation purposes. Bidders may request a start date earlier than November 1, 2009 (but no earlier than April 1, 2008) by designating an alternate interim injection or withdrawal delivery point for service until November 1, 2009. That is, interested parties may bid such that their initial transportation service may be amended with an injection and/or withdrawal delivery point and term extension (consistent with bidder's total proposed term) upon completion of facilities.

 

The maximum FSS and FST tariff rates shall be applicable to Existing Storage Capacity delivered to Pendleton.

 

The ability to accommodate FST primary receipts at Pendleton is subject to the completion of the incremental Concord Station compression facilities associated with National Fuel Open Season #130.

 

 

 

Receipts and Deliveries to all other points:

  

Commences as early as April 1, 2008. The maximum FSS and FST tariff rates shall be applicable.

 

 

TERM:

 

For bids requesting Corning injections and/or Corning withdrawals, a minimum term of 10 years is required. For bids requesting Pendleton withdrawals, a minimum term of 5 years is required. For all other points, there is no term requirement.

 

 

RATE INFORMATION:

Requests for rate discounts will be not be accepted in this Open Season.

 

Bids for the Existing Storage Capacity will be accepted under National Fuel's FSS and FST rate schedules.

 

National Fuel plans to request FERC approval for Market-based rates for the Expansion Storage Capacity. Bids for the Expansion Storage Capacity shall be submitted as a rate per unit of storage capacity, and will not be capped, but will have a unit rate floor equivalent to National Fuel's maximum tariff FSS rate. The incremental FST rate described in the Commencement of Service section shall apply to transportation of Expansion Storage Capacity to Corning points.

 

The maximum tariff rates under the FSS and FST Rate Schedules are listed in the tables below.

Firm Storage Service (FSS):

Component

Maximum Tariff

Demand (monthly, applied to withdrawal deliverability)

$2.1556 per Dth/d

Capacity (monthly, applied to capacity)

$0.0432 per Dth

Injection/Withdrawal

$0.0139 per Dth

ACA Commodity Surcharge (injection and withdrawal)

$0.0019 per Dth

Surface Operating Allowance

1.4% on injection

1.4% on withdrawal

 

Firm Storage Transportation (FST):

Component

Maximum Tariff

Reservation (monthly, applied to MDWTQ)

 

$3.3612 per Dth/d

 

Commodity

$0.0063 per Dth

ACA Commodity Surcharge (applied to all transportation)

$0.0019 per Dth

Fuel, Loss, and Company-Use/LAUF

1.4% on injection

0% on withdrawal

1.4% on non-storage transportation

 

FUEL and LOSS ALLOWANCE:

 

FSS: A total surface operating allowance of 2.8% shall be retained during injection and withdrawal (1.4% on injection and 1.4% on withdrawal).

 

FST: During withdrawal there shall be no fuel and loss retention/LAUF. During injection and non-storage transportation there shall 1.4% fuel and loss retention/LAUF.

 

 

 

BID FORMAT AND AWARD PROCESS:

 

Bids must be submitted on the Open Season #131 Bid Sheet.

 

Bids for Existing Storage Capacity will be ranked against the Existing Storage Capacity component of any bids that request both Existing and Expansion capacity. Bids for the Expansion Storage Capacity will be ranked against each other separately.

 

Bidders may elect to identify bids for the Expansion Storage Capacity as contingent upon being the successful bidder for the Existing Storage Capacity. Bidders may also elect to identify bids for the Existing Storage Capacity as contingent upon being the successful bidder for the Expansion Storage Capacity. Bidders may note this on the Bid Sheet.

 

National Fuel reserves the right to deem the Tuscarora to Corning pipeline and Expansion Storage Capacity project uneconomical if the Existing Storage Capacity is not awarded to shipper(s) requesting Corning points.

 

Existing Storage Capacity Award Process : Shippers will be ranked according to the net present value (NPV), per unit of storage capacity, of the incremental charges associated with the applicable FSS Capacity, FSS Demand and FST Reservation rates. For bid ranking purposes, the tariff FST rate shall be used in the NPV calculation for existing storage capacity requests.  The NPV calculation will incorporate length of contract term and will utilize an annual rate of 9.6% for discounting. The "Storage Component" of a bid shall be the NPV, per unit of storage capacity, of the FSS Capacity charge and FSS Demand charge. In the event that a customer bids for FSS service only (no FST) and its bid is equal to the Storage Component of another bid or bids for both FSS and FST service ("Comparable Combined Service Bid"), the FSS only bid shall be considered equal in value to the Comparable Combined Service Bid with the highest value. In the event that National Fuel receives two or more bids of equal NPV, per unit of storage capacity, the bid with the shortest term will be deemed the best bid. Subject to other conditions in this posting, a ratable allocation, based on quantities requested, shall be made among shippers that submit bids that are equal with respect to both NPV and term.

 

Expansion Storage Capacity Award Process : Shippers will be ranked according to the net present value (NPV), per unit of storage capacity, based on the storage unit rate bid submitted. Unit rate bids shall be for storage service only, although the incremental FST charges described in the Commencement of Service section shall apply to deliveries to/from Corning points. The NPV calculation will incorporate length of contract term and will utilize an annual rate of 9.6% for discounting. In the event that National Fuel receives two or more bids of equal NPV, per unit of storage capacity, the bid with the shortest term will be deemed the best bid. Subject to other conditions in this posting, a ratable allocation, based on quantities requested, shall be made among shippers that submit bids that are equal with respect to both NPV and term.

 

 

 

CREDIT REQUIREMENTS:

Shippers will be required to demonstrate creditworthiness or provide a credit alternative acceptable to National Fuel.

 

EXECUTION OF AGREEMENTS:

 

Successful bidder(s) will be expected to negotiate and execute service agreements and Precedent Agreement(s), where applicable, in an expeditious manner.

OPEN SEASON BID PROCESS:

 

All Open Season requests must be submitted on a Service Request Form (complete a Service Request Form online or download the PDF version , and include a Bid Sheet ( BID131 ), both of which are available on our web site ( http://www.nationalfuelgas.com/ ) or by calling our Marketing Department at 716.857.7740. The completed form should be submitted online or via mail or fax as listed below:

 

 

National Fuel Gas Supply Corporation
6363 Main Street
Williamsville, NY 14221
PHONE: 716.857.7740
FAX 716.857.7310

National Fuel Marketing Representatives:

Terry Falsone – 716.857.7602

Joe Kolis – 716.857.7520
George Linder – 716.857.7105

 

The results of this Open Season will be posted on National Fuel's web site, http://www.nationalfuelgas.com/ , in the Supply Corp. section under Marketing News and Offers.

Contact Our Marketing Department

Return to Open Season Index

 

 


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