HomeMy WebLinkAbout08477 ORD - 05/31/1967v
AN ORDINANCE
AUTHORIZING AND DIRECTING THE CITY MANAGER, FOR AND
ON BEHALF OF THE CITY OF CORPUS CHRISTI, TO EXECUTE A
CONSENT AGREEMENT AND ASSIGNMENT OF CONTRACT DATED
DECEMBER 7, 1962, AND HERETOFORE EXISTING BY AND
BETWEEN CITY OF CORPUS CHRISTI AND LUMAR GAS CORPORATION,
SAID APPROVAL OF ASSIGNMENT TO BE EFFECTIVE UPON ASSUMP-
TION BY COASTAL STATES GAS PRODUCING COMPANY OF THE OBLI-
GATIONS OF LUMAR GAS CORPORATION,, AND TO BE EFFECTIVE
FROM AND AFTER MARCH 1, 1967, A COPY OF SAID ASSIGNMENT
BEING ATTACHED HERETO AND MADE A PART HEREOF; AND
DECLARING AN EMERGENCY.
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI,
TEXAS:
SECTION 1. THAT THE CITY MANAGER BE, AND HE IS HEREBY, AUTHORIZED
AND DIRECTED, FOR AND ON BEHALF OF THE CITY OF CORPUS CHRISTI, TO EXECUTE
CONSENT AGREEMENT AND ASSIGNMENT OF CONTRACT DATED DECEMBER 7, 1962, AND
HERETOFORE EXISTING BY AND BETWEEN THE CITY OF CORPUS CHRISTI AND LUMAR
GAS CORPORATION, SAID APPROVAL OF ASSIGNMENT TO BE EFFECTIVE UPON ASSUMP-
TION BY COASTAL STATES GAS PRODUCING COMPANY OF THE OBLIGATIONS OF LUMAR
GAS CORPORATION, AND TO BE EFFECTIVE FROM AND AFTER MARCH 11 1967, A COPY
OF SAID ASSIGNMENT BEING ATTACHED HERETO AND MADE A PART HEREOF.
SECTION 2. THE NECESSITY TO AUTHORIZE THE AFORESAID CONSENT
AGREEMENT AND ASSIGNMENT OF CONTRACT AS PROMPTLY AS POSSIBLE CREATES A
PUBLIC EMERGENCY AND ANA MPERATIVE PUBLIC NECESSITY REQUIRING THE SUS-
PENSION OF THE CHARTER RULE THAT NO ORDINANCE OR RESOLUTION SHALL BE
PASSED FINALLY ON THE DATE OF ITS INTRODUCTION AND THAT SUCH ORDINANCE
OR RESOLUTION SHALL BE READ AT THREE SEVERAL MEETINGS OF THE CITY COUNCIL,
AND THE MAYOR HAVING DECLARED *SUCH EMERGENCY AND NECESSITY TO EXIST, HAVING
REQUESTED THE SUSPENSION OF SAID CHARTER RULE AND THAT THIS ORDINANCE BE
PASSED FINALLY ON THE DATE OF ITS INTRODUCTION AND THAT THIS ORDINANCE TAKE
EFFECT AND BE IN FULL FORCE AND EFFECT FROM AND AFTER ITS PASSAGE, IT IS
847
ACCORDINGLY SO ORDAINED, THIS THE ./ / DAY OF ,
1967.
ATTES . r.�lif 1/v ✓iC °�/
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CITY SECRET X00YLEGAL OR
THE CITY OF CORPUS CHRISTI, TEXAS
APPROVED AS FORM THI
3/ DAY OF ?W , 1967:
<;,I
CITY ATTORNEY (��
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VINSON, ELKINS, WEEMS & SEARLS 15436
ATTORNEYS AT LAW
FIRST CITY NATIONAL SANI( BUILDING
• }HOUSTOWTEXAS 77002
• • l ` ' TELEPHONE APITOL 5 -2411
ADDRESS S
June 7, 1967 ; »
» Mr. I. M. Singer, +
s City Attorney, A,
City of Corpus Christi, e
' Texas
+ "a x
' Re: Lumar Gas'Corporation
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Dear Mr,. Singer: , A
This'is to confirm our teleplibne conversation of
this morning. In such conversation, you advised me c `
that the Consent to Assignment of Contract executed by
the City of Corpus Christi consenting to the assignment
by Lumar Gas'Corporation of that certain gas supply
contract dated December 7, 1962,'between Lumar Gas- »
Corporation and the City 0*Corpus Christi, Texas to
Hydrocarbon Development Corporation would beieffective ; 3.
as of the close of the Agreement dated April 13, 1967, 4
between Lumar Gas Corporation and Hydrocarbon Develop -,.
ment Corporation for the sale of the assets of Lumar Gas
Corporation and•at such time Lumar would be released of
its obligation to deliver gas thereund6r. You advised
me that) the conditions precedent to the effectiveness of
the Con=sent, other than the closing of thexsale of assets
from Lumar to Hydrocarbon,, had all been satisfied. The
was 'closed June 7,` 1867. ; `+ ;•" ' �'
9V
I would appreciate your confirming my understand- '
ing of our conversation for our files by executing the; _`A
copy of this letter enclosed herewith and returning -it
'to the undersigned. x
Very truly yours,
VINSON, ►:;ELKINS, - WEEMS' • &' SEARLS
By.
d S. Teyis Grinstead
.
179:63B i.
Aw-
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Mr. I. M.'Singer June 7, 1967
Page 2
ACKNOWLEDGED this
7 day of June, 1967
I. M. Singer, C'ty Attorney
City of Corpus Christi, Texas
cc: Mr. Herbert, W. Whitney
City Manager
City of Corpus Christi, Texas
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COASTAL STATES GAS PRODUCING COMPANY &
PETROLEUM TOWER
PHONE TULIP 3.5211 1
\`1�l CORPUS CHRISTI, TEXAS
May 29, 1967
AP7noV
The Honorable Mayor
City Manager y
City Council
City of Corpus Christi
302 South Shoreline
Corpus Christi, Texas
i Gentlemen:
We are attaching hereto a letter dated April 20, 1967, from Lumar
Gas Corporation to the City which announces to the City that Lumar Gas
Corporation has entered into an agreement to sell substantially all of
its properties, business and contracts to Hydrocarbon Development
Corporation, including the agreement dated December 7, 1962, between
Lumar and the City covering the supply of natural gas for the city -owned
gas distribution system. That,letter requests that'the City approve the
assignment of the aforesaid gas supply contract to Hydrocarbon Develop-
ment Corporation. There is attached to that - letter a form, suggested
by Lumar Gas Corporation, to "be executed by the City to evidence the
City's consent to said assignment and 'd release to Lumar of the liabi-
lities and obligations under such contract. r.
t -
However, Hydrocarbon Development Corporation did, on April 28, 1967,
enter into an agreement with Coastal States Gas Producing Company wherein
` Coastal States was given;an option to purchase the said Lumar -City con -
tract along"With,certain other.properties•that Hydrocarbon Development «
Corporation is purchasing from Lumar, located in Nueces County, Texas,
and this is to advise you that Coastal States Gas Producing Company is
r, exercising its option to purchase the said Lumar -City contract, subject
" to the approval of the City to the °assignment of said City contract to
Coastal States Gas Producing Company and /or one of its wholly owned
subsidiaries. It is' anticipated that there will be a simultaneous closing
of both of the said contracts. Therefore, rather than requesting that the
City approve the assignment of the said City contract to Hydrocarbon and
then approve the - assignment of the said contract from Hydrocarbon to
Coastal States, the request is hereby jointly made that the assignment
of the said Lumar -City contract be approved from Lumar to Hydrocarbon and
simultaneously therewith from Hydrocarbon to Coastal States and /or one of
its wholly owned subsidiaries. It would seem that this approval could
logically be contained in one resolution or ordinance to cover the entire
transaction.
Finally, we do not anticipate closing the sale and purchase of said
assets and City contract until the City approves the said assignment and
the approval should therefore be conditioned upon the consummation and
final closing of the contracts between Lumar and Hydrocarbon and between
Hydrocarbon and Coastal. Upon the receipt of the approval of the said
assignment, we anticipate that the Lumar- Hydrocarbon and Hydrocarbon -
Coastal States contracts can be closed within ten days from such approval.
The contracts between Lumar- Hydrocarbon and Hydrocarbon - Coastal
States both provide that the sale of the contracts and assets covered
thereby shall relate back to an effective date of March 1, 1967. All
payments made by the City prior to this date for gas supplied under the
Lumar -City contract will be adjusted between the companies involved;
however, future payments after the closing of the transactions herein
mentioned should be made directly to Coastal States Gas Producing Company
and /or Coastal States' wholly owned subsidiary.
Coastal States Gas Producing Company is happy to be in a position to
acquire the Lumar -City contract and we look forward to an amicable rela-
tionship with the City throughout the life of this contract.
Very truly yours,
COASTAL STATES GAS PRODUCING COMPANY
HYDROCARBON DEVELOPMENT COIF ORATION
-2-
PK rD T
LVMAR GAS CORPORATION
1215 Ca.axeaa or C.-ce B--. • CA 8.0647
Hoe a. T
City of Corpus Christi, Texas
302 South Shoreline
Corpus Christi, Texas
i
Gentlemen:
April 20, 1967
We wish to announce that Lumar Gas Corporation has
entered into an agreement to sell substantially all of its
properties, business and contracts, including Lumar's contract
with your Company, to Hydrocarbon Development Corp. of Corpus
Christi, Texas. Hydrocarbon has agreed to assume the perform-
ance of our contract with your Company. The principals in
Hydrocarbon are Messrs. George Horine, Joe Prejean and Sill
Murray. These persons have had many years of experience in
the industry. You may contact any of them for further in-
formation concerning Hydrocarbon. It is anticipated that the
transaction will be finalized and closed within the next three
weeks.
In connection with this transaction, Lumar intends to
liquidate and dissolve. In order to do so, it would be very
helpful if your Company would execute and return to the atten-
tion of the undersigned one copy of the enclosed Consent to
Assignment of Contract and Release at your earliest convenience.
The officers and employees of Lumar appreciate having
had the pleasure of doing business with your organization over
the past years and we anticipate that your future relations
with Hydrocarbon will be very satisfactory.
If you have any questions concerning this notice'and
request, please write or call the undersigned, collect, Area
Code 713, CApitol 8 -0847, Houston, Texas.
Yours very truly,
LUMA_P__
ARGAAS CORPORATION
Sam Jeffrey, Vice President
and General Manager
Enclosure
CONSENT TO ASSIGNMENT OF CONTRACT AND RELEASE
The undersigned, for a valuable consideration, hereby
authorizes and consents to the assignment pursuant to a Sale -
Purchase Agreement dated April 13, 1967 between LUMAR GAS
CORPORATION, a Texas corporation ( "Lumar "), and HYDROCARBON
DEVELOPMENT CORP., a Texas corporation ( "Hydroco "), of all of
the interest of Lumar in the contract described below between
a the undersigned ;and Lumar, in return for, the assumption at
law by Hydroco of all of the obligations and liabilities of
Lumar under said contract from and after March 15 1967. The
undersigned hereby releases Lumar from all liabilities and
obligations under such contract, on the effective date of
such assignment. This Consent and Release shall be effective
whether such assignment is made before or after the execution
of this Consent and Release.
DESCRIPTION OF CONTRACT
Name and Designation of Parties: Lumar Gas Corporation, Seller,
and The City of Corpus Christi, Texas, Buyer
Date of Contract: December 7, 1962
Term of Contract: Until March 1, 1986
Subject Matter: Gas Sales Contract No. 6 i
Gas Supply to the City of Corpus Christi, Nueces County, Texas
This Consent and Release executed this day of
• 1967.
THE CITY OF CORPUS CHRISTI
4
R By
41 x
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COASTAL STATES GAS PRODUCING COMPANY a�
PETROLEUM TOWER
PHONE TULIP 3 -5211
CORPUS CHRISTI, TEXAS
P s June 5, 1967
Mr. Herbert Whitney
City Manager
City of Corpus Christi
City Hall
Corpus Christi, Texas
Dear Mr. Whitney:
This is in connection with the sale by Lumar Gas Corporation of all
of its assets to Hydrocarbon Development Corporation and the purchase by
Lo -Vaca Gathering Company, a wholly owned subsidiary of Coastal States
Gas Producing Company, of all of Lumar's assets located in Nueces County,
Texas, including the Lumar -City Gas Sales Contract,
We anticipate that the sale will be closed Tuesday, June 6, 1967, and
we will, of course, supply the City with executed copies of the conveyance
and assignment of the Lumar -City Contract.
Lumar, as you know, has been supplying the City gas by way of a'trans -.
portation agreement with Florida Gas Transmission Company. Under this
transportation agreement, Florida has been transporting certain volumes of
gas for Lumar for delivery to the City. Lo -Vaca Gathering Company has no
need for this said Florida transportation agreement in that the company has
approximately 100 million cubic feet of gas passing through the City daily
through its own pipeline systems and plant, which is more than ample to
meet the City's load requirements, Lo -Vaca is therefore not assuming nor
acquiring the Florida transportation agreement and the agreement is to be
terminated prior to the sale of Lumar's assets,
In order to effectuate a smooth switchover from the Lumar system to
this company's system, we have agreed to install an interconnection totie
our system into the Lumar system to deliver gas to the existing delivery
points so that we will begin supplying gas the moment the Florida -Lumar
transportation agreement is terminated. We anticipate this switchover to
be made'on Tuesday, June 6, 1967.
In connection with this switchover and the tying in of our system,
Lo -Vaca agrees to assume the obligations under the Lumar -City Gas Sales
Contract dated December 7, 1962, and Coastal States Gas Producing Company,
the parent company, agrees to guarantee performance by Lo -Vaca, all in
accordance with the terms of the said contract itself.
Mr. Herbert Whitney
June 5, 1967
Page 2
The interconnection that is being made into our system, which will
be used to make the changeover that will occur Tuesday, June 6, 1967, will
be supplemented between now and October 1, 1967. This temporary inter-
connection is being made at this time in order to be in a position to supply
the City system's needs immediately. We agree to install, at our expense,
between now and October 1, 1967, a 12 -inch interconnecting pipeline which
will tie into our present existing 16 -inch pipeline which comes out of our
Gas Processing Plant located on the site of the old Corpus Christi Country
Club, with the 12 -inch interconnecting pipeline to be tied into the former
Lumar system with delivery points to the Van Cura Station and Kosar Station.
This will, in effect, reverse the flow of Lumar's existing pipeline so that
the gas will be flowing from our 16 -inch line through Lumar's presently
existing pipeline which is tied into Florida's line from the western part
of the City.
Mr. Ledbetter is in contact with our Gas Dispatcher and with our
personnel and we stand ready at all times to see that the City's needs will
be met.
Very truly yours,
Jack Ware
Vice President
LEGAL DEPARTMENT
CONSENT TO ASSIGNMENT OF CONTRACT
THE STATE OF TEXAS
COUNTY OF NUECES
CONDITIONED UPON THE PRIOR ASSUMPTION DULY AUTHORIZED BY THE
BOARD OF DIRECTORS OF COASTAL STATES GAS PRODUCING COMPANY AND THE NECES-
SARY SUPPORTING DOCUMENTS, PROPERLY ASSUMING ALL OF THE OBLIGATIONS AND
RESPONSIBILITIES UNDER THAT CERTAIN GAS SUPPLY CONTRACT DATED DECEMBER 7,
1962, PROPOSED TO BE ASSIGNED BY LUMAR GAS COMPANY, SELLER III SAID GAS
SUPPLY CONTRACT, AND SUPPORTED BY AN ASSUMPTION -0F RESPONSIBILITY AGREE-
MENT OF FLORIDA GAS TRANSMISSION COMPANY, THE UNDERSIGNED CITY OF CORPUS
CHRISTI, ACTING BY AND THROUGH ITS DULY AUTHORIZED CITY MANAGER, FCR A VALU-
ABLE CONSIDERATION, DOES HEREBY AUTHORIZE AND CONSENT TO THE ASSIGNMENT PUR•
SUANT TO A SALES PURCHASE AGREEMENT DATED APRIL 13, 1967, BETWEEN LUMAR
GAS CORPORATION,A TEXAS CORPORATION, AND HYDROCARBON DEVELOPMENT CORP.,
OF
A TEXAS CORPORATION,/ALL OF THE INTEREST OF LUIIAR GAS CORPORATION IN SAID
CONTRACT DATED DECEMBER 7, 1962, FOR A GAS SUPPLY TO THE CITY OF CORPUS
CHRISTI, NUECES COUNTY, TEXAS, AND THE TRANSFER FROM SAID HYDROCARBON
DEVELOPMENT CORP., TO COASTAL STATES GAS PRODUCING COMPANY, OR ONE OF ITS o-
WHOLLY OWNED SUBSIDIARIES, WHICH SUBSIDIARY AS WELL AS COASTAL STATES GAS
PRODUCING COMPANY SHALL ASSUME THE OBLIGATION OF PERFORIANCE OF SAID LUMAR
GAS CORPORATION CONTRACT DATED DECEMBER 7, 1962, AND THE CONDITIONS OF THIS
CONSENT. THIS CONSENT IS FURTHER CONDITIONED UPON THE PROMPT CLOSING OF
THE TRANSFER AND ASSIGNMENT FROM LUMAR GAS CORPORATION THROUGH HYDROCARBON
DEVELOPMENT CORP., TO COASTAL STATES GAS PRODUCING COMPANY OR A WHOLLY OWNED
SUBSIDIARY OF COASTAL STATES GAS PRODUCING COMPANY, AND THE AGREEMENT OF
COASTAL STATES GAS PRODUCING COMPANY OR ITS SUBSIDIARY, LO -VACA GATHERING
COMPANY, TO CONSTRUCT ON OR BEFORE OCTOBER 1, 1967, A 12" SUPPLY LINE IN
ACCORDANCE WITH THE LETTER OF JUNE 6, 1967, AGREEING TO SUCH CONSTRUCTION,
AND UPON CLOSING SHALL BE EFFECTIVE FROM AND AFTER THE DATE OF CLOSING AND
THERE SHALL BE NO FURTHER OBLIGATION ON LU14AR GAS CORPORATION TO MAKE ANY
FURTHER DELIVERY OF GAS TO THE CITY OF CORPUS CHRISTI FROM AND AFTER SUCH
CLOSING.
EXECUTED THIS THE OF JUNES 1867.
ATT CITY OF CORPUS CHRISTI
7
CI Y SECR TARY
HERBERT W. WHITNECYJ��/ j
APPROVED AS TO LEGAL FORM TH CITY MANAGER Y
_DAY OF JUNE, 1967:
CITY %AT
DIRECTOR' F rINANC�
0-
THE STATE OF TEXAS §
COUNTY OF NUECES §
WHEREAS, Lo -Vaca Gathering Company, a wholly owned subsidiary of
Coastal States Gas Producing Company, is acquiring, by purchase and
assignment, all of Lumar Gas Corporation's interest in and to that
certain Gas Sales Contract dated December 7, 1962, wherein Lumar Gas
Corporation is the Seller and the City of Corpus Christi, Texas is the
Buyer, and upon closing of the purchase and the assignment of the said
Gas Sales Contract Lo -Vaca Gathering Company will assume all of the future
obligations and benefits arising out of said Gas Sales Contract, and
WHEREAS, Lo -Vaca Gathering Company must provide proper assurance
to the City of Corpus Christi, Texas, that the natural gas will be
supplied, as required by the said Lumar -City Contract dated December 7,
1962, both Coastal States Gas Producing Company and Lo -Vaca Gathering
Company are desirous of entering into this agreement whereby Coastal
States Gas Producing Company, the parent corporation, together with
Lo -Vaca Gathering Company may guarantee full performance under the said
Gas Sales Contract according to the written terms thereof, NOW THEREFORE,
WITNESSETH,
That Coastal States Gas Producing Company and Lo -Vaca Gathering
Company, for and in consideration of the sum of TEN DOLLARS ($10.00)
to each of the aforesaid companies by the other in hand paid, together
with other good and sufficient consideration, the receipt and sufficiency
of which is hereby acknowledged, the said companies do hereby mutually
agree as follows, to -wit:
1. Coastal States Gas Producing Company hereby agrees to and does
hereby guarantee that its wholly owned subsidiary, Lo -Vaca Gathering
Company, will supply natural gas required to be supplied to the City of
Corpus Christi, Texas, under that certain Gas Sales Contract heretofore
previously entered into by'and between Lumar Gas Corporation and the
City of Corpus Christi, Texas, dated December 7, 1962, upon the approval
of the assignment of said Gas Sales Contract by the City of Corpus
Christi, Texas, to Lo -Vaca Gathering Company, all in accordance with the
terms and provisions of said Gas Sales Contract.
2. Lo -Vaca Gathering Company does itself hereby agree to fully
perform and to supply all of the natural gas requirements imposed by the
above described Gas Sales Contract upon approval of the assignment of
the said Gas Sales Contract from Lumar Gas Corporation to Lo -Vaca
Gathering Company by the City of Corpus Christi, Texas, all in accordance
with the terms and provisions of said Gas Sales Contract.
EXECUTED ON THIS THE 7th day of June, A.D. 1967.
COASTAL STATES GAS PRODUCING COMPANY
` °ye d as fo
ATTEST: By 0
vide President j &
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LO -VACA GATHERING COMPANY
red as r
ATTEST: Vice President a °
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(_ � l -tom C;�. � `���i� �.. •.�f nE•t•
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-2-
CORPUS CHRISTI, TEXAS
DAY OF lg�
TO THE MEMBERS OF THE CITY COUNCIL
CORPUS CHRISTI, TEXAS '
FOR THE REASONS SET FORTH IN THE EMERGENCY CLAUSE OF THE FOREGOING
ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY EXIST FOR THE SUSPEN-
SION OF THE CHARTER RULE OFI REQUIREMENT THAT NO ORDINANCE OR RESOLUTION SIiALL
BE PASSED FINALLY ON THE DATE IT IS INTRODUCED, AND THAT SUCH ORDINANCE OR
RESOLUTION SHALL BE READ AT THREE MEETINGS OF THE CITY COUNCIL; 1, THEREFOP.E,
REQUEST THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS THIS ORDI-
NANCE FINALLY ON THE DATE IT 15 INTRODUCED, OR AT.THE PRESENT MEETING OF THE
CITY COUNCIL.
RESPECTFULLY,
Y R
THE CITY OF CORPUS CHRISTI, TEXAS
THE CHARTER RULE WAS SUSPENDED BY THE FOLLOWING VOTE:
JACK R. BLACKMON ✓ Jt
RONN I E SI ZEMORE
V. A. "DICK" BRADLEY, JR
J. A. "JACK" GRANT
P, JIMENEZ, JR., M.D. V
GAGE LDZpND, $R.
KEN MCDANIEL
THE ABOVE ORDINANCE WAS PASSED BY THE FOLL ING VOTE:
JACK R. BLACKMON ✓
RONNIE SIZEMORE
V. A. "DI CK" BRADLEY, JR,/-,
J. A. "JACK" GRANT /%
P. JIMENEZ, JR., M. D.y/
GABS LOZANO, SR. ✓
KEN MCDANIEL ���