Competition Strong for RIK Gas Sale
Approximately 485,000 MMBtu of Royalty-in-Kind gas produced from federal leases in the Gulf of Mexico was sold to 13 companies during a spring gas sale conducted by the Department of the Interior's Minerals Management Service.
The sale was concluded March 10 and provides for a total of 485,400 million British Thermal Units of RIK gas per day to be delivered to 13 offshore pipeline systems originating in the Gulf of Mexico, and destined for consumer and industry use in the continental United States. The sales are for seven or 12-month terms with delivery beginning April 1, 2005.
"The sale was extremely competitive," said Minerals Management Service Director Johnnie Burton, noting that 126 bids were entered for the 16 individual gas sale packages. "Taking this royalty gas in-kind," Burton added, "ensures that the federal government and taxpayers receive a fair market value for this critical energy resource."
Combined with packages sold in an earlier sale last year, MMS will be delivering approximately 625,000 MMBtu of federal royalty gas every day starting April 1, 2005.
Companies awarded sales packages represent large integrated producers, marketing companies, affiliates of local distribution companies/utilities, and an industrial end user.