TITLE
Recommendation to authorize City Manager to (A) execute a Natural Gas Delivery and Purchase Agreement for Unit Gas between Thums Long Beach Company and the City; (B) terminate existing Natural Gas Delivery Agreement for locally produced gas between Thums Long Beach Company and the City; (C) execute a Natural Gas Supply Agreement for power plant between Thums Long Beach Company and the City; (D) terminate existing Natural Gas Transportation/Service Agreement between Thums Long Beach Company and the City;
(E) execute a North American Energy Standards Board (NAESB) contract between Merrill Lynch Commodities, Inc. and the City on such terms and enter into such transactions under the NAESB as the City Manager may deem appropriate; (F) execute an amendment to the Prepaid Natural Gas Purchase and Sale Agreement between Merrill Lynch Commodities, Inc. and the Long Beach Bond Finance Authority; and (G) execute an amendment to the Natural Gas Supply Agreement between the Long Beach Bond Finance Authority and the City, for the remarketing and purchase of Local Natural Gas produced in the City of Long Beach and the supply of natural gas for the electrical power plant for oil operations. (Citywide)
DISCUSSION
The Long Beach Gas and Oil Department (LBGO) maintains Agreements with Thums Long Beach Company (Thums), as well as four other local oil producers (Locals) to purchase locally produced gas (Local Gas), which is a standard by-product of oil production. This Local Gas is purchased as a supplement to LBGO's current major natural gas supply from Merrill Lynch Commodities, Inc. (MLCI). Currently, the Locals supply approximately 10 to 20 percent (dependent on season) of the total natural gas requirements of LBGO customers and are currently paid a price equivalent to the MLCI prepay price. These Agreements have been mutually beneficial to LBGO and the Locals. LBGO has benefited from a reasonably priced supply of natural gas, and the Locals are able to allay themselves...
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