TITLE
Recommendation to authorize City Manager to execute and enter into a five year Natural Gas Delivery Agreement with the Tidelands Oil Production Company for the delivery of locally produced natural gas at a metering station located on Pier “S.”
DISCUSSION
Commencing January 2006, the City’s Long Beach Gas and Oil Department (LBGO)
anticipates receiving an additional 190,000 annual MMBtu of locally produced natural
gas from the Tidelands Oil Production Company (Tidelands). This is an additional
Agreement with Tidelands for a new entry point into the gas distribution system (see
attached map representing the flow control unit proposed layout piping plan and
sections of the new Tidelands metering station), adjacent to the Southeast Resource
Recovery Facility, on Terminal Island.
A new Natural Gas Delivery Agreement for locally produced gas with Tidelands is
required for the delivery of this gas, which is in addition to Tidelands’ current Pier “GI’
gas deliveries. The price paid to Tidelands for this gas will be consistent with that paid
to other local gas producers.
This matter was reviewed by Deputy City Attorney Richard Anthony on December 7,
2005 and by Budget Management Officer David M. Wodynski on December 6,2005.
TIMING CONSIDERATIONS
City Council action is requested on December 20, 2005, as gas sales are expected to
commence January 1 , 2006.
FISCAL IMPACT
Local gas is traditionally slightly less expensive than non-local gas supplies. Local gas
is supplied directly into the LBGO pipeline system, allowing LBGO to avoid paying
SoCalGas pipeline transportation charges required for non-local gas supplies.
Total estimated costs for the requested delivery agreement are $1,540,000 per year
over the five-year term of the agreement. The cost of the natural gas commodity is
passed through directly to LBGO customers with no markup and therefore offset dollar
for dollar. The Port of Long Beach will also realize revenue from this agreement. The
cost associ...
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