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TSP/TSP Name:  30669048-WYOMING INTERSTATE CO. Critical: N
Notice Type Desc (1):  TSP CAPACITY OFFERING Notice Type Desc (2):  CAPACITY FOR SALE
Notice Eff Date/Time:  09/13/2018 12:27:16PM Notice End Date/Time:  10/18/2018 9:00:00am
Post Date/Time:  9/13/2018 12:27:16 PM Notice ID: 118166
Reqrd Rsp:  5 Rsp Date: 
Notice Stat Desc:  INITIATE Prior Notice: 
Subject:  WIC Medicine Bow Expansion Open Season
Notice Text:

 

Open Season Notice for Existing and Expansion Firm Capacity from WIC Medicine Bow Lateral receipt points to Cheyenne Hub High Pressure Pool delivery points

 

Bid Deadline – 2:00 PM Mountain Time, October 17, 2018

 

 

Portable Document Format (.pdf) file of Open Season:

 

http://pipeline2.kindermorgan.com/PortalWeb/PortalDocs.aspx?code=WIC&parent=1600

 

Responding to market interest for firm transportation capacity to serve customers in the Powder River and other basins, Wyoming Interstate Company, L.L.C. (“WIC”) has identified currently available capacity and potential expansion capacity that could provide a total of up to 1.81 billion cubic feet (“Bcf”) per day of capacity to the market (thereby increasing the total capacity of the Medicine Bow Lateral to 2.3 Bcf/day).  WIC is conducting this binding open season (“Open Season”) for available transportation capacity of up to 950,000 dekatherms (“Dth”) per day (“Available Capacity”) and a proposed first tranche of expansion capacity of up to 560,000 Dth/day ("Expansion Capacity").

 

Description of Expansion Capacity

 

With certain system enhancements including station yard piping and incremental compression (the "WIC Medicine Bow Lateral Expansion"), WIC can increase the quantity available on the WIC Medicine Bow segment by up to 560,000 Dth per day.  The Expansion Capacity would be available from WIC Medicine Bow Lateral receipt points to certain delivery points at the Cheyenne Hub High Pressure Pool.

 

Note that the WIC Medicine Bow Lateral Expansion project is subject to WIC's timely receipt of all necessary regulatory approvals, permits, and other authorizations required for the construction and operation of the expansion project, in a form and substance satisfactory to WIC in its sole discretion.  In addition, please note that the Expansion Capacity will require additional demonstrations of creditworthiness and/or credit support as detailed below.

 

Rate Schedule:

FT

Maximum Delivery Quantity (MDQ):

Available Capacity:

 

950,000 Dth/day available from the receipt points to the delivery points described below effective December 1, 2018.

 

Expansion Capacity:

 

Following the In-Service Date of the WIC Medicine Bow Lateral Expansion, anticipated to be May 2022, WIC will have an additional 560,000 Dth/day of capacity available on an annual basis.

 

Total Capacity Offered: 1.51 Bcf/day

Primary Receipt Point(s):

*Up to meter capacity

Existing Points of Receipt on Segments 440,460, 462, 464 and 466.  Parties that are interested in capacity from other primary points of receipt are encouraged to contact their business development representatives listed below.

Primary Delivery Point(s):

*Up to meter capacity

Any combination of Cheyenne Hub WIC delivery meters, up to their meter capacity.

Secondary Receipt Point(s) at the same rate as the Primary Receipt Point(s):

All current WIC Medicine Bow Lateral Receipts and Deliveries on Segments 440, 460, 462, 464 and 466. Parties that are interested in capacity from other secondary points of receipt are encouraged to contact their business development representatives listed below.

Recommended Term:

Expansion Capacity:

 

In order to economically justify WIC's capital investment in the WIC Medicine Bow Lateral Expansion, WIC recommends a minimum bid term of not less than ten (10) years from the in-service of the WIC Medicine Bow Lateral Expansion (although WIC reserves the right to reject any bid which fails to comport with the provisions of this Open Season).

Recommended Rate:

In order to economically justify WIC's capital investment in the WIC Medicine Bow Lateral Expansion, WIC recommends either (1) a recourse rate bid, or (2) a negotiated rate bid of not less than $2.7345 per Dth per month (which, for illustrative purposes, is equivalent to $0.0899 per Dth on a daily basis) (although WIC reserves the right to reject any bid which fails to comport with the provisions of this Open Season).

Open Season Dates:

Open Season Start: 12:00 PM MT September 13

 

Bids due: 2:00 PM MT October 17, 2018

 

Bids awarded by: 4:00 PM MT October 22, 2018

 

Email attached Bid Sheet to KMWestBids@KinderMorgan.com

 

NOTE:  WIC will rely upon the time the bid is received to determine whether the bid was timely.  Bids that are received (as determined by the time stamp on the WIC's email inbox) after the “End” date and time listed above will be considered invalid bids and will not be eligible for an award of capacity in this Open Season.  WIC recommends that bids be submitted well in advance of the closing time listed above to minimize the risk that any email delay could cause a bid to be excluded from consideration.

 

 

 

SUBMISSION OF BIDS

 

Parties interested in bidding in this Open Season should submit completed Bid Sheet(s) (in the form attached hereto) to WIC before the close of the Open Season via email at the following address:  KMWestBids@KinderMorgan.com.

 

By submitting Bid Sheet(s) to WIC, the bidding party certifies that (a) all information contained in the bid is complete and accurate, (b) it satisfies, or will be able to satisfy, all the requirements of WIC's Federal Energy Regulatory Commission ("FERC") Gas Tariff, Third Revised Volume No. 2, as the same may be amended from time to time ("WIC's Tariff"), and (c) the person submitting the bid has full authority to bind the bidding party.

 

The bid rate must be presented as the reservation rate per Dth/month or stated as the maximum tariff rate.  In addition to the bid rate, each bid shall be subject to the applicable maximum usage rate and maximum usage surcharges, all other maximum rates, charges and surcharges, including ACA, Fuel Gas and Lost and Unaccounted-for Gas (“FL&U”), and any other authorized surcharges assessed under the applicable Rate Schedule of WIC's Tariff as those amounts may be amended or superseded from time-to-time.  This includes incremental lateral charges and any third party charges resulting from the use of capacity that WIC may hold on other pipelines.

 

WIC reserves the right to reject negotiated rate bids, bids that have rates less than the maximum recourse rate, bids stated as the dollar equivalent of the current maximum recourse rate, bids that are incomplete, contain offers of varying rates within the term, contain additional or modified terms or are inconsistent with the provisions of WIC's Tariff.  WIC also reserves the right to reject bids for quantities that are not for the same quantity for the duration of the term.

 

If WIC does not receive maximum recourse rate or negotiated rate bids for quantities and terms sufficient to economically justify WIC's capital investment in the WIC Medicine Bow Lateral Expansion project, then WIC reserves the right not to move forward with the WIC Medicine Bow Lateral Expansion, or to negotiate with bidders to propose a more appropriately sized expansion at a corresponding rate.  Existing shippers with capacity on WIC's system that could be used in lieu of any of the potential system modifications described above should notify WIC if they wish to permanently turnback their capacity through a release to prospective shippers in this Open Season.  Those who wish to so release their capacity should notify WIC of the amount, the term, and any other conditions that would be necessary to effectuate such a release of their capacity.  Such notices should be submitted to WIC before the close of the Open Season.

 

WIC will consider bids that are made contingent upon the receipt of subsequent approval by the bidder's management no later than November 19, 2018.  If notice of the receipt of any required management approval is not communicated to WIC by November 19, 2018, any award of capacity to the bidder will be withdrawn and WIC may offer that capacity to other prospective shippers in any manner that is selected by WIC.

 

To accommodate the needs of producers that are developing new production areas, WIC will consider bids in this Open Season for quantities that increase over a period of time (a “ramp-up”).  An award of ramp-up capacity may result in multiple contracts in order to conform to the requirements of WIC's Tariff.

 

WIC notes that FERC Order No. 894, in some cases, prohibits multiple affiliates of the same entity from bidding in an open season for capacity in which the pipeline may allocate capacity on a pro rata basis.  It appears to WIC that the restrictions imposed by FERC Order No. 894 will be applicable in this Open Season and FERC recommends that potential bidders review and adhere to the requirements of that FERC Order.

 

Although this is a binding Open Season, WIC reserves the right, in its sole discretion, to consider requests for Expansion Capacity received after the close of the Open Season period, including requests to modify a bidder's validly submitted bid, but shall be under no obligation to do so.

 

EVALUATION CRITERIA

 

If WIC receives acceptable bids for capacity in excess of the actual amount of available capacity, then WIC will award and/or allocate the capacity in a manner that yields the highest total Present Value (PV) as calculated below.  In determining which bid(s) yield the highest total PV, WIC reserves the right to combine multiple bids, in whole or in part, in a manner that results in a total PV of the combined bids that exceeds the highest PV achievable by accepting one or more of the disaggregated bids.  This process could result in a bidder being awarded less capacity than requested (unless such bidder elects on its bid sheet not to accept a pro rata allocation of capacity).

 

PV will be calculated as the sum of the present values for all of the months beginning with the first month capacity is available through the end date of the bid term.  Bids stating a commencement date upon the in-service date of any to-be-constructed facilities will be evaluated using WIC's estimate of the completion date of the required facilities.

 

The PV for each month will be calculated as follows:

 

PV = (R X Q)/((1+i) to the power of n)

Where:

R = the monthly reservation bid rate

Q = the monthly bid quantity

   i = the monthly discount rate of 0.4133% (which is the annual discount rate of 4.96% divided by 12).

n = the number of months from the earliest date the capacity is available in the Open Season to the month the revenue will be received (the first month capacity is available n = 1, the second month n = 2, and so on).

 

Each successful bidder shall enter into a Firm Transportation Service Agreement (“FTSA”) reflecting the terms of its bid as awarded by WIC.  The FTSA will be consistent with the appropriate form of service agreement contained in WIC's Tariff.

 

CREDITWORTHINESS REQUIREMENTS

 

The successful bidder(s) for the Available Capacity must satisfy the creditworthiness requirements of WIC's Tariff, and, in addition, the successful bidder(s) for the Expansion Capacity must, at a minimum, demonstrate creditworthiness equal to two (2) years of anticipated charges for the awarded transportation capacity.  A successful bidder that is unable to satisfy the general creditworthiness provisions set forth in WIC's Tariff and/or the additional creditworthiness requirements set forth above, for the Expansion Capacity, as applicable, shall provide additional credit support in the form of a letter of credit, a guaranty from a party that satisfies the applicable creditworthiness standards, or such other form of credit that is acceptable to WIC in its sole discretion.  Bidders that fail to satisfy such creditworthiness requirements within a reasonable time will have their capacity award withdrawn.  WIC will treat the financial statements provided by bidders as confidential.

 

CONTACT INFORMATION:

 

Questions concerning this Open Season should be directed to:

 

Laine Lobban                (719) 520-4344

Greg Ruben                  (719) 520- 4870

Tony Sanabria               (719) 667-7582

 

Open Season Bid Sheet

(See next page)


Open Season Bid Sheet

 

Open Season EBB Identifier:  WIC Medicine Bow Lateral Existing and Expansion Capacity

 

Form of Service: FT

 

Email Bid To: KMWestBids@KinderMorgan.com

 

A.    Shipper Information:

 

Legal Name of Bidder:                                                        

 

Name of Requesting Party:                                                             

 

Title of Requesting Party:                                                   

 

DUNS Number:                                                                  

 

Phone:                                                                               

 

B.    Available Capacity Bid:

 

Requested Term Start Date:                                    

 

Requested Term End Date:                                     

 

□    If this box is checked and bidder's bid does not qualify for a right-of-first-refusal (ROFR) in accordance with Section 4.10 of WIC's FERC Gas Tariff, then this bid is subject to WIC providing bidder a contractual ROFR in accordance with Section 4.10(f) of WIC's FERC Gas Tariff.

 

Maximum Daily Quantity:                                           Dth/day

 

Will you accept a pro rata allocation of capacity if necessary             Yes                 No

 

Primary Receipt Point(s)

Maximum Daily Receipt Quantity (in Dth/Day)

Primary Delivery Point(s)

Maximum Daily Delivery Quantity (in Dth/Day)

 

 

 

 

 

 

 

 

Total Receipt Quantity

 

Total Delivery Quantity

 

 

C.    Available Capacity Bid Rate (select one):

 

  WIC's Medicine Bow maximum recourse rate

 

  Discounted Recourse Rate:  $ ________ per Dth per Month

 

  Negotiated Rate:  $ ________ per Dth per Month

 

In addition to the bid rate, successful bidders will be subject to the applicable maximum usage rate and maximum usage surcharges, all other maximum rates, charges and surcharges, including ACA, Fuel Gas and Lost and Unaccounted-for Gas, and any other authorized surcharges assessed under the applicable Rate Schedule of WIC's Tariff as those amounts may be amended or superseded from time-to-time.  This includes incremental lateral charges and any third party charges resulting from the use of capacity that WIC may hold on other pipelines.

 

D.    Expansion Capacity Bid:

 

Requested Term Start Date:                                    

 

Requested Term End Date:                                     

 

□    If this box is checked and bidder's bid does not qualify for a right-of-first-refusal (ROFR) in accordance with Section 4.10 of WIC's FERC Gas Tariff, then this bid is subject to WIC providing bidder a contractual ROFR in accordance with Section 4.10(f) of WIC's FERC Gas Tariff.

 

Maximum Daily Quantity:                                           Dth/day

 

Will you accept a pro rata allocation of capacity if necessary             Yes                 No

 

Primary Receipt Point(s)

Maximum Daily Receipt Quantity (in Dth/Day)

Primary Delivery Point(s)

Maximum Daily Delivery Quantity (in Dth/Day)

 

 

 

 

 

 

 

 

Total Receipt Quantity

 

Total Delivery Quantity

 

 

E.    Expansion Capacity Bid Rate (select one):

 

  WIC's Medicine Bow maximum recourse rate

 

  Discounted Recourse Rate:  $ ________ per Dth per Month

 

  Negotiated Rate:  $ ________ per Dth per Month

 

In addition to the bid rate, successful bidders will be subject to the applicable maximum usage rate and maximum usage surcharges, all other maximum rates, charges and surcharges, including ACA, Fuel Gas and Lost and Unaccounted-for Gas, and any other authorized surcharges assessed under the applicable Rate Schedule of WIC's Tariff as those amounts may be amended or superseded from time-to-time.  This includes incremental lateral charges and any third party charges resulting from the use of capacity that WIC may hold on other pipelines.

 

* By submitting a bid to WIC, the bidding party certifies that (a) all information contained in the request is complete and accurate, (b) it satisfies, or will be able to satisfy, all the requirements of WIC's Tariff, and (c) the person submitting the bid has full authority to bind the bidding party.

 

F.    Condition to Bid (Check if Applicable):

 

  Shipper's bid will be subject to receipt of the approval of bidder's management, management committee, and/or board of directors or other appropriate management structure by no later than November 19, 2018.  Any bid that is made subject to such a condition will be rejected if written evidence of the receipt of such approval is not provided to WIC by 12:00 noon Mountain Time on November 19, 2018.

 

 

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