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Notice of Open Season 190
LONG TERM FIRM STORAGE AND FIRM STORAGE TRANSPORTATION CAPACITY

STATUS IS:
CLOSED

POSTED: 11/8/2013
TERM:11/8/2013
- 11/15/2013
11/15/2013: Bids are currently being evaluated.
1/2/2014: MSQ of 2,543,040 Dth has been awarded.
5/20/2014: Capacity in offer two has been awarded. Interim capacity through 3/31/2015 has also been awarded in the amounts of 2,543,040 of MSQ and 756,960 of MSQ.

 

National Fuel Gas Supply Corporation - Revised

OPEN SEASON - OS190

LONG TERM FIRM STORAGE AND FIRM STORAGE TRANSPORTATION CAPACITY

 

CAPACITY

National Fuel Gas Supply Corporation (“National”) is pleased to announce the availability of 3,300,000 Dth of firm storage service and associated firm transportation service under its Firm Storage Service (“FSS”) and Firm Transportation Service (“FST”) Rate Schedules, as well as through a combined Storage and Transportation Lease (“Lease”) related to a system expansion.  While traditional FSS and FST storage services are made available by this posting, the Lease capacity offered herein involves construction of  new compression and compression related facilities at National's Tuscarora Compressor Station for receipt and delivery at a new proposed interconnection by Empire Pipeline at Tuscarora, NY.

 

This firm storage capacity, which, when awarded may not exceed a total of 3,300,000 dth, is being offered in two distinct packages, each with the unique injection and withdrawal rights outlined below: 

 

 

 

RATE SCHEDULES

CHARACTER OF SERVICE

CAPACITY (Dth)

MDIQ (Dth/D)

MDWQ (Dth/D)

OFFER #1

FSS/FST

98 Day

3,300,000

20,264

33,603

OFFER #2*

FSS/FST with

conversion to Lease

60 Day

3,300,000

27,500

55,000

*Offer #2 is available only to other interstate pipelines.

 

Bidder(s) awarded capacity in conjunction with Offer #2 will be required to subscribe interim standard FSS/FST services with 150-day service beginning April 1, 2015, until the facilities required for the  Lease are placed into service.  Upon conversion from standard FSS/FST capacity to the Lease, the character of service converts to 60-day.  The corresponding ratchets are outlined in the sections below.

 

OPEN SEASON TIMEFRAME

Commences Friday, November 8th, 2013 and expires at 4:00pm (ET) on Friday, November 15th, 2013.

 

 

TERM REQUIREMENTS

Services related to Offer #1 commence April 1, 2014, and there is no minimum or maximum term requirement.

 

Interim service for Offer #2 begins on April 1, 2015, with Lease services expected to commence the later of November 1, 2015 or upon completion of required facilities.  A ten (10) year minimum term applies.

 

   

INJECTION and WITHDRAWAL RIGHTS

OFFER #1

3,300,000 Dth of 98-Day Service under the FSS & FST Rate Schedules

 

Maximum Storage Quantity (MSQ) Inventory

INJ/WD Rights

INJ/WD Quantities (Dth/d)

INJECTION PERIOD

April 1 – October 31

 

0% to 70%

From greater than 70% to 100%

 

1/160 of MSQ

1/167 of MSQ

20,654

19,816

WITHDRAWAL PERIOD

November 1 – March 31

 

From greater than 35% to 100%

From greater than 20% to 35%

From 0% to 20%

 

1/98 of MSQ

1/116 of MSQ

1/196 of MSQ

33,603

28,563

16,802

 

OFFER #2

 3,300,000 Dth of 150-day Service (Ratchets Applicable to FSS & FST Interim Service beginning on April 1, 2015)

 

Maximum Storage Quantity (MSQ) Inventory

INJ/WD Rights

INJ/WD Quantities (Dth/d)

INJECTION PERIOD

April 1 – October 31

0% to 100%

1/200 of MSQ

16,500

WITHDRAWAL PERIOD

November 1 – March 31

From 0% to 100%

1/150 of MSQ

22,000

  

 

3,300,000 Dth of 60-Day Service (Ratchets Applicable to Lease)

 

Maximum Storage Quantity (MSQ) Inventory

INJ/WD Rights

INJ/WD Quantities (Dth/d)

INJECTION PERIOD

April 1 – October 31

0% to 100%

1/120 of MSQ

27,500

WITHDRAWAL PERIOD

November 1 – March 31

From greater than 27% to 100%

From greater than 11% to 27%

From 0% to 11%

1/60 of MSQ

1/92 of MSQ

1/140 of MSQ

55,000

35,870

23,571

 

RECEIPT and DELIVERY POINTS

Please refer to attached Exhibit A for a complete list of available storage transportation points.

RATE INFORMATION

With the exception of the Offer #2 discounted rate allowances outlined in the “Discounts” section below, the maximum tariff rates under National’s FSS and FST Rate Schedules shall apply to both standard FSS/FST service and the Lease service:

 

Maximum Tariff Rates - Firm Storage Service (FSS):

Component

Maximum Tariff

Demand (monthly, applied to withdrawal deliverability)

$2.4826 per Dth/d

Capacity (monthly, applied to capacity)

$0.0381 per Dth

Injection/Withdrawal

$0.0391 per Dth

ACA Commodity Surcharge (injection and withdrawal)

$0.0012 per Dth

Surface Operating Allowance (“SOA”)

as provided in National’s tariff –

see below

as provided in National’s tariff –

see below

 

Maximum Tariff Rates - Firm Storage Transportation (FST):

Component

Maximum Tariff

Reservation (monthly, applied to MDWTQ)

$3.7805 per Dth/d

Commodity

$0.0135 per Dth

ACA Commodity Surcharge (applied to all transportation)

$0.0012 per Dth

Fuel and Loss Retention/LAUF (“Fuel”)

on injection, as provided in National’s tariff – see below

0% on withdrawal

on non-storage transport, as provided in National’s tariff –

see below

 

FUEL and LOSS ALLOWANCES

Storage Operating and LAUF Allowance, and Transportation Fuel and Company Use Retention and Transportation LAUF Retention  will be established and subject to change under the tracking mechanism guidelines in National’s GT&C Section 41 tariff sheets. 

 

For informational purposes only, National’s current allowances are as follows:

FSS:  Storage Operating and LAUF Allowance of 1.19% on injection and 1.19% on withdrawal.

 

FST: During withdrawal there is no Transportation Fuel and Company Use Retention and Transportation LAUF Retention (collectively “Transportation Fuel/LAUF”).  During injection and non-storage transportation, the current Transportation Fuel/LAUF is 0.54%.

 

National expects that the above-described fuel and loss provisions will apply to the Lease capacity.

 

DISCOUNTS

In this Open Season for Offer #1, National will accept requests for storage and transportation services under National’s FSS and FST Rate Schedules.  For Offer #1, requests for rate discounts or discounts on Storage Operating and LAUF Allowance or Transportation Fuel/LAUF will not be accepted.

 

For Offer #2, National will accept and evaluate bids reflecting a discount below the maximum monetary rates applicable only to the Lease, if bids meet the following conditions.  Such Offer #2 discount requests must (1) be submitted as a combined unit rate for the Lease capacity, and (2) exceed the applicable predetermined  Lease Unit Rate Floors for each period that National has established for Offer #2 (see table below).  National will not accept requests for discounts beyond the 2018 injection season.   National will reject any Open Season bid for Offer #2 that does not meet all of these requirements.  Please note that Interim storage and transportation service (FSS and FST) beginning April 1, 2015 is subject to the maximum tariff rates under the FSS and FST Rate Schedules, and discount requests will not be considered for this service.  The maximum tariff rates will apply to this Interim service until service under the Lease commences.

 

For the purposes of converting an FSS/FST discounted unit rate bid into component rates, National will first discount the FSS injection and withdrawal charges, followed by the FST reservation charge, then the FSS capacity charge, then the FSS demand charge.  Note that FST discounts will be applicable only to transportation to and from National’s firm storage point.  For contracting purposes, any discount to the combined FSS/FST unit rate will have discounts applied to both FST and FSS. 

 

Under both Offer #1 and Offer #2, National will not accept requests for discounts on Storage Operating and LAUF Allowance or Transportation Fuel/LAUF.   

DISCOUNT TABLE - OFFER #2

Storage Period

Storage & Transportation

Unit Lease Rate Floor

November 1, 2015 – March 31, 2016*

$0.6135/dth

April 1, 2016 – March 31, 2017*

$1.3605/dth

April 1, 2017 – March 31, 2018*

$1.5877/dth

*Should the Lease service begin later than November 1, 2015, any applicable Lease discounts will apply from the time the Lease commences.

 

BID RANKING and AWARD PROCESS
Shippers may request all or part of the available capacity, and are allowed to revise their bids within the posting period.   Shippers may bid on both Offer #1 and Offer #2. 

 

Offer #1 - Bids in Offer #1 will be ranked according to the net present value (NPV), per unit of storage capacity, of the sums of the FSS capacity charges, FSS demand charges and FST reservation charges as derived above.  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 and its bid is equal to the Storage Component of another bid or bids requesting 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.  Capacity will then be awarded utilizing a highest-to-lowest NPV methodology.  In the event that National receives two or more bids of equal NPV per unit of storage capacity, a ratable capacity allocation shall be determined, subject to other conditions in this posting.  Bids that are prorated for any reason are considered to have been awarded at the reduced MSQ. 

 

Offer #2 - Bids in Offer #2 will be ranked according to the net present value (NPV), per unit of storage capacity, of the sums of the FSS capacity charges, FSS demand charges and FST reservation charges as derived above.  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.  Capacity will then be awarded utilizing a highest-to-lowest NPV methodology.  In the event that National receives two or more bids of equal NPV per unit of storage capacity, a ratable capacity allocation shall be determined, subject to other conditions in this posting.  Bids that are prorated for any reason are considered to have been awarded at the reduced MSQ. For Offer #2, bids requesting FSS service only will not be accepted. 

 

Bids under Offer #1 will be awarded first, followed by bids under Offer #2.

 

The FST receipt and FST delivery point capacities represented in Exhibit A reflect the total storage transportation capacity available for each Offer.   Each awarded bid may reduce the amount of remaining FST receipt or FST delivery point capacity available for subsequent awards, and/or the amount of capacity remaining under a particular Offer.  Should this occur, National reserves the right to negotiate with such bidder(s) to mutually agree to different primary FST points and/or a prorated amount of storage capacity.

 

CREDIT REQUIREMENTS

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

 

EXECUTION OF AGREEMENTS

Successful bidders in Offer #1 will be required to execute and return the Service Agreements resulting from this Open Season within 30 days of receipt.  Successful bidders in Offer #2 will be required to execute and return within 60 days of receipt, a Precedent Agreement including a pro forma Lease and Service Agreement for the Interim storage and transportation services.

 

BID DOCUMENTS

All Open Season requests must be made on a Service Request Form, and bids for Offer #2 must also include a Bid Sheet.  Both documents are available on our web site (www.nationalfuelgas.com) or by calling our Marketing Department at 716.857.7740. The completed forms should be submitted online, 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

 

NFGSC  Marketing Representatives:

 

Terry Falsone – 716.857.7602

Joe Kolis – 716.857.7520

Gen Dispenza – 716.857.6945

 

       

 

 Exhibit A

             

OFFER #1 – Available Receipt and Delivery Points

METER NUMBER

 

SYSTEM AREA

 FST RECEIPT

 CAPACITY

DTH/D

 FST DELIVERY

 CAPACITY

 DTH/D

TGP

Rose Lake

420527

Eastern

Up to 12,492

Up to 33,603

Transco

Leidy

7126

Eastern

Up to 15,894

Up to 33,603

TGP

East Aurora

420077

Northern

Up to 20,264

0

TCPL

Niagara

010902

Northern

Up to 20,264

0

Empire

Pendleton

012003020

Northern

Up to 20,264

0

DTI

Ellisburg Station

41202

Eastern

Up to 20,264

0

Transco

Wharton

6325

Eastern

0

Up to 14,000

 

Notes:

Subject to point capacity limitations, Northern FST receipt points (injection) can be paired with Northern, and/or Eastern FST delivery points (withdrawal).

 

Subject to point capacity limitations, Eastern FST receipt points (injection) must be paired with Eastern FST delivery points (withdrawal).

 

Additional Points:

Receipt and Delivery capacity may also be available at the following points.  Please refer to the Supply web site Receipt and Delivery Meter Design Capacity tables located within the “Informational Postings” area, or contact a Marketing representative for details.

 

CITY GATE

NFGDC Distribution – PA

NFGDC-PA

CITY GATE

Kane Gas City Gate

PSN1301336

CITY GATE

Songer Gas Company

PSN1427941

CITY GATE

Clarion River Gas City Gate

CRGCG

CITY GATE

Myers Gas Company

PSX1427931

CITY GATE

Pine Roe Gas

PSN1201457

N/A

Greentree Landfill

GREENTO

N/A

Imperial Landfill

IMPTO

CITY GATE

Eastern Natural Gas

ENGCG

CITY GATE

Peoples Natural Gas

PNGCG

  

 

OFFER #2 – Available Receipt and Delivery Points

Interim FSS & FST Service beginning April 1, 2015

Point Name

Meter Number

FST Receipt Capacity (Dth/d)*

FST Delivery Capacity (Dth/d)*

Transco Leidy

7126

Up to 15,894

Up to 22,000

TGP Rose Lake

420527

Up to 12,492

Up to 22,000

*Total injection and withdrawal rights not to exceed 16,790 dth/d and 22,000 dth/d, respectively.

 

The available receipt and delivery points and their associated quantities listed above are valid only during the interim period from April 1, 2015 through the start of the Storage and Transportation Lease.  Upon commencement of the lease, the sole receipt/delivery point listed in the table below applies:

 

Storage and Transportation Lease

 

Point Name

Meter Number

Receipt Capacity (Dth/d)

Delivery Capacity (Dth/d)

Empire Tuscarora

TBD

Up to 27,984

Up to 55,000

 

 

 

Contact Our Marketing Department

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