[Federal Register Volume 83, Number 149 (Thursday, August 2, 2018)]
[Notices]
[Pages 37825-37827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16685]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
[LLNM006200 L99110000.EK0000 XXX L4053RV]
Notice of Crude Helium Auction and Sale for Fiscal Year 2019
Delivery
AGENCY: Bureau of Land Management, Interior.
ACTION: Notice of auction and sale.
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SUMMARY: The Secretary of the Interior (Secretary), through the Bureau
of Land Management (BLM) New Mexico State Office, is issuing this
Notice to conduct an auction and sale from the Federal Helium Program,
administered by the BLM New Mexico, Amarillo Field Office. The Helium
Stewardship Act of 2013 (HSA) requires the BLM to conduct an annual
auction and sale of crude helium. Accordingly, the BLM will once again
use the auction and sale process established in the Federal Register
dated June 20, 2017, for a previous sale.
DATES: The schedule for the auction and sale process is:
Helium Auction
August 31, 2018--FY 2019 helium auction held in Amarillo, Texas
September 4, 2018--FY 2019 helium auction results published on the
BLM website
September 5, 2018--Invoices for auction sent on or before this
date; payments due 15 days from invoice
Helium Sale
August 31, 2018--Invitation for offers (IFO) posted for helium sale
September 4, 2018--Bids due from IFO
September 4, 2018--Award announcements published on the BLM website
September 5, 2018--Invoices for sale sent on or before; payments
due 15 days from invoice
Helium Delivery
September 30, 2018--Helium transferred to buyers' storage accounts
If payment is not received by September 20, 2018, volumes will be
re-offered for sale to all over bidders, proportionally, on September
21, 2018. Subsequently, for these re-offered volumes to count toward
October 1, 2018 allocation percentages, payment must be received by
September 28, 2018.
ADDRESSES: The August 31, 2018, helium auction will be held in the main
conference room of the Amarillo Field Office, 801 South Fillmore, Suite
500, Amarillo, TX 79101. The BLM's Federal Helium Program HSA
Implementation page website is located at https://www.blm.gov/programs/energy-and-minerals/helium/federal-helium-operations. Questions related
to the auction can be submitted by phone to the BLM at 806-356-1000.
FOR FURTHER INFORMATION CONTACT: Samuel R.M. Burton, Amarillo Field
Manager, at telephone: 806-356-1000, email: [email protected]. Persons
who use a telecommunications device for the deaf (TDD) may call the
Federal Relay Service (FRS) at 1-800-877-8339. The FRS is available 24
hours a day, 7 days a week, to leave a message. You will receive a
reply during normal business hours.
SUPPLEMENTARY INFORMATION:
A. Purpose and Background
In October 2013, Congress passed the HSA, which requires the
Department of the Interior, through the BLM Director, to offer for
auction and sale annually a portion of the helium reserves owned by the
United States and stored underground at the Cliffside Gas Field near
Amarillo, Texas.
On July 23, 2014, the BLM published a ``Final Notice for
Implementation of Helium Stewardship Act Sales and Auctions'' in the
Federal Register (79 FR 42808) (2014 Final Notice). The 2014 Final
Notice contained information about the HSA, definitions of terms used
in the Notice, the reasons for the action, and a process for conducting
the auctions and sales in FY 2014.
On August 24, 2015, the BLM published a ``Notice of Final Action:
Crude Helium Sale and Auction for Fiscal Year 2016 Delivery'' in the
Federal Register (80 FR 51304) (2015 Final Notice). The 2015 Final
Notice refined the process the BLM used in 2014 for conducting the
auction and sale of crude helium. The BLM will use the process set
forth in the 2015 Final Notice for the auction and sale of crude helium
to occur in FY 2018 for FY 2019 delivery.
Both the 2014 and 2015 Final Notices are available from the BLM's
HSA Implementation Page website (see ADDRESSES). Search under the
``Documents and Reports'' link.
B. Volumes Offered in the FY 2019 Helium Auction and Sale:
Table 1 identifies the volumes to be offered for auction and sale
in FY 2018 for FY 2019 delivery.
Table 1--Projected Volumes for Auction and Sales for FY 2019 Delivery
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Forecasted In-kind sales Total Volume Volume Volume
production (sales to remaining available for available for available for
capability federal users) production auction non- allocated sale
(NITEC study) ---------------- available for ---------------- sale ---------------
Fiscal year (FY) ---------------- sale/ auction ----------------
or delivery
MMcf * MMcf ---------------- MMcf MMcf MMcf
MMcf
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FY 2019................................................. 825 155 300 *** 210 ** 9 81
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* MMcf means one million cubic feet of gas measured at standard conditions of 14.65 per square inch atmosphere (psia) and 60 degrees Fahrenheit.
** 70 percent of total production capacity after deducting in-kind (rounded).
*** Volumes offered fulfill the requirement of the HSA to reach Phase C.
[[Page 37826]]
C. FY 2019 Helium Auction
1.01 What is the minimum FY 2019 auction price and the FY 2019
sales price? The minimum FY 2019 auction price is $110 per Mcf (one
thousand cubic feet of gas measured at standard conditions of 14.65
psia and 60 degrees Fahrenheit). The BLM will announce the FY 2019 sale
price after the auction has concluded, and the BLM completes its
analysis of the auction information. The BLM will use this information
to publish the crude helium price for FY 2019.
1.02 What will happen to the helium offered but not sold in the
helium auction? Any volume of helium offered, but not sold in the FY
2019 auction, will be added to the helium available for sale and will
be offered in the FY 2019 sale.
1.03 When will the auction and sale take place? The BLM will offer
helium for FY 2019 according to the following schedule:
Helium Auction
August 31, 2018--FY 2019 helium auction held in Amarillo, Texas
September 4, 2018--FY 2019 helium auction results published on the
BLM website
September 5, 2018--Invoices for auction sent on or before this
date; payments due 15 days from invoice
Helium Sale
August 31, 2018--Invitation for offers (IFO) posted for helium sale
September 4, 2018--Bids due from IFO
September 4, 2018--Award announcements published on the BLM website
September 5, 2018--Invoices for sale sent on or before; payments
due 15 days from invoice
Helium Transfer
September 30, 2018--Helium transferred to buyers' storage accounts
(in accordance with Section 1.08)
If payment is not received by September 20, 2018, volumes will be
re-offered for sale to all over-bidders, proportionally, on September
21, 2018. Subsequently, for these re-offered volumes to count toward
October 1, 2018 allocation percentages, payment must be received by
September 28, 2018.
1.04 What is the auction format? The auction will be a live
auction, held in the main conference room of the Amarillo Field Office
at 1:00 p.m. Central Time, on August 31, 2018. The address is 801 South
Fillmore, Suite 500, Amarillo, TX 79101. Anyone meeting the HSA
definition of a qualified bidder may participate in the auction. The
logistics for the auction and the pre-bid qualification form is
included in a document entitled, ``FY 2019 Helium Auction Notice and
Guide'' on the BLM's HSA Implementation Page website (see ADDRESSES).
Click on the ``Federal Register Notices'' link.
1.05 Who is qualified to purchase helium at the auction? Only
qualified bidders, as defined in 50 U.S.C. 167(9), may participate in
and purchase helium at the auction. The BLM will make the final
determination of who is a qualified bidder using the HSA's definition
of a qualified bidder, regardless of whether or not that person was
previously determined to be a qualified bidder. Payment must be
received not later than the close of business September 20, 2018.
1.06 How many helium lots does the BLM anticipate offering at the
FY 2019 auction? The BLM anticipates auctioning 210 MMcf in a total of
12 lots for delivery in FY 2019. The lots would be divided as follows:
5 lots of 25 MMcf each; and
5 lots of 15 MMcf each; and
2 lots of 5 MMcf each.
1.07 What must I do to bid at auction? The BLM has described the
live auction procedures, including detailed bidding instructions and
pre-bid registration requirements, in a document entitled, ``FY 2019
Auction Notice and Guide,'' which is available on the BLM's HSA
Implementation Page website (see ADDRESSES). Click on the ``Federal
Register Notices'' link.
1.08 When will helium that is purchased at sale or won at auction
be available in the purchaser's storage account? The BLM will transfer
the volumes purchased in the FY 2019 auction and sale to the buyer's
storage accounts on September 30, 2018.
D. FY 2019 Helium Sale
2.01 Who will be allowed to purchase helium in the FY 2019 sale?
The crude helium sale will be separated into two distinct portions, a
non-allocated portion and an allocated portion. The non-allocated
portion will be ten percent of the total amount offered for sale for FY
2019, and will be available to those storage contract holders who do
not have ability to accept delivery of crude helium from the Federal
Helium Pipeline (as defined in 50 U.S.C. 167(2)) as of May 30, 2018.
The allocated portion will be 90 percent of the total amount offered
for sale for FY 2019, and will be available to any person (including
individuals, corporations, partnerships, or other entities) with the
ability to accept delivery of crude helium from the Federal Helium
Pipeline (as defined in 50 U.S.C. 167(2)).
2.02 How will helium sold in the FY 2019 sale be allocated among
those participating in the non-allocated sale? The non-allocated sale
will be made available to all qualified offerors not eligible to
participate in the allocated sales. The minimum volume that can be
requested is 1 MMcf. The total volume available for the non-allocated
portion of the sale is 9 MMcf. Any volumes not sold at auction will be
distributed between the non-allocated (10 percent) and the allocated
sale (90 percent). Any volumes not purchased at the non-allocated sale
will be sold in the allocated portion.
2.03 How will the helium sold in the FY 2019 sale be allocated
among the persons to accept delivery of crude helium from the Federal
Helium Pipeline? Any person wishing to participate in the allocated
portion of the FY 2019 sale needs to report its excess refining
capacity and operational capacity a minimum of 14 calendar days prior
to the sale, using the Excess Refining Capacity form. The form can be
downloaded from the BLM's HSA Implementation Page website (see
ADDRESSES). Click on the links for ``Crude Helium Auctions & Sales''
and then ``FY 2019 Refiner Estimated Excess Capacity.'' Each person
participating in the sale will then be allocated a proportional share
based upon that person's operational capacity.
2.04 How does a person apply for access to the Federal Helium
Pipeline for the purpose of taking crude helium? The steps for taking
crude helium are provided in the BLM's HSA Implementation Page website
(see ADDRESSES). The steps are contained in a document entitled, ``How
to Establish a Storage Contract and Pipeline Connection Point.'' Click
on the link for ``Helium Storage.'' Reporting forms can be downloaded
from the same website address, click on the link for ``Documents and
Reports.'' The forms show the requirements and due dates for each
report. The length of time required to apply for and obtain access to
the Federal Helium Pipeline can vary based on the person's plans for
plant construction, pipeline metering installation, and other
variables. The BLM is available to provide technical assistance,
including contact information for applying for access and meeting any
applicable National Environmental Policy Act requirements.
E. Delivery of Helium in FY 2019
3.01 When will I receive the helium that I purchase in a sale or
win based
[[Page 37827]]
on a successful auction bid? Helium purchased at the FY 2019 sale or
won at the FY 2019 auction will be delivered starting September 30,
2018, in accordance with the crude helium storage contract. The intent
is to ensure delivery of all helium purchased at sale or auction up to
the BLM's production capability for the year.
3.02 How will the BLM prioritize delivery? The HSA gives priority
to Federal in-kind helium (i.e., helium sold to Federal users) (50
U.S.C. 167d(b)(1)(D)) and (b)(3)). After meeting that priority, the BLM
will make delivery on a reasonable basis, as described in the crude
helium storage contract, to ensure storage contract holders who have
purchased or won helium at auction have the opportunity during the year
to have that helium produced or refined in monthly increments.
F. Background documents
Supplementary documents referenced in this Notice are available at
the BLM's HSA Implementation Page website (see ADDRESSES) and include
the following documents:
a. This Federal Register Notice for Fiscal year 2019 Delivery;
b. The HSA (50 U.S.C. 167);
c. FY 2019 Helium Auction Notice and Guide;
d. 2016 Storage Contract (template for information only);
e. Determination of Fair Market Value Pricing of Crude Helium;
f. Storage Fees;
g. Required Forms for Helium Reporting; and
h. FY 2014 through FY 2018 Federal Register Notices for Helium
Auctions and Sales.
Authority: The HSA of 2013 (Pub. L. 113-40) codified to various
sections in 50 U.S.C. 167-167q.
Richard T. Cardinale,
Acting Deputy Director, Operations.
[FR Doc. 2018-16685 Filed 8-1-18; 8:45 am]
BILLING CODE 4310-FB-P