HomeMy WebLinkAbout17985 RES - 12/14/1983A RESOLUTION
SUPPORTING A PROPOSED AMENDMENT TO THE GAS SEARCH
AGREEMENT MADE BETWEEN THE COASTAL CORPORATION, VALERO
ENERGY CORPORATION, VALERO TRANSMISSION COMPANY, AND
TEXAS COMMERCE BANK AS TRUSTEE UNDER THE SETTLEMENT
TRUST AGREEMENT AND AS ESCROW AGENT UNDER THE GAS
SEARCH AGREEMENT, TO PERMIT COASTAL CORPORATION TO
MARKET ON AN INTERRUPTIBLE BASIS 100% OF SURPLUS GAS
DEDICATED TO THE GAS SEARCH PROGRAM TO REATA GAS
CORPORATION FOR A TWO-YEAR PERIOD AND TO CONCUR IN
DEFINING WELLS ELIGIBLE FOR THE PROGRAM AND THE METHOD
OF CALCULATING DEBT SERVICE.'
WHEREAS, on or about November 9, 1979 a settlement agreement
among Coastal States Corporation (now Coastal Corporation), Lo -Vaca
Gathering Company and the former gas customers of Coastal States (settling
customers), one of whom is the City of Corpus Christi, Texas, provided the
basis of settlement of all outstanding lawsuits against Coastal, created
Valero Energy Corporation as the independent company, established
procedures for determining gas rates t� be charged customers by Valero, and
provided other benefits to the settling customers;
WHEREAS, Texas Commerce Bank is trustee and escrow agent for the
approximately 400 settling customers covered under the settlement
agreement;
WHEREAS, the settlement agreement and gas search agreement
require Coastal Corporation to spend at least $180,000,000 to search for
and develop 350 billion cubic feet of natural gas during a 15 -year period
for sale to settling customers;
WHEREAS, Coastal Corporation has spent over $140,000,000 and
discovered 80 billion cubic feet of natural gas as of 1983;
WHEREAS, because of the surplus gas currently available, Valero
is no longer able to purchase all of the gas contracted to date under the
gas search program, which purchases have dropped from 90% of Coastal's
delivery capacity in 1978, to 24% in 1983;
WHEREAS, Coastal is now requesting to amend the gas search
agreement to allow sale to other customers for a two-year period for gas
not needed by Valero, which sales would be on an interruptible basis to
permit availability to Valero, if needed;
WHEREAS, without these proposed sales, income to the settlement
trust will be substantially decreased from previous years; and
WHEREAS, the proposed amendment is expected to be submitted by
the Trustee to the settling customers for approval by at least 65% of the
interests in the agreement; sEP 2 81984
11:79S5 MICROFILMED
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS:
SECTION 1. That the City of Corpus Christi and its gas rate
payers would benefit if the proposed amendment to the gas search agreement
were approved since more gas would be sold than is now presently being sold
thereby increasing contributions made to the settlement trust to promote
the gas search program established for the benefit of the settling
customers, including the City of Corpus Christi and its rate payers, and to
lower the overall costs of gas which the City of Corpus Christi provides to
its gas distribution system customers.
SECTION 2. That the City Manager designate a representative to
attend the special meeting of settling customers to be held on December 15,
1983 in Houston, Texas who shall be authorized to vote the City of Corpus
Christi's interest in favor of approving the proposed amendment to the gas
search agreement.
SECTION 3. That upon written request of the Mayor or five
Council members, copy attached, to find and declare an emergency due to
imperative public necessity to amend the gas search agreement, such finding
for the emergency is made and declared requiring suspension of the Charter
rule as to consideration and voting upon ordinances or resolutions at three
regular meetings so that this resolution is passed and shall take effect
upon first reading as an emergency measure this the 14th day of December,
1983.
ATTEST:
/'z 90
Ci Secretary
App,ROVED:
/64g DAY OF �e« � , 1983:
MAYOR
THE CITY OF CORPUS CHRISTI, TEXAS
Corpus Christi, Texas
if'l day of/!'lt.4l.„. 198 -
TO THE MEMBERS OF THE CITY COUNCIL
Corpus Christi, Texas
For the reasons set forth in the emergency clause of the foregoing ordinance
or resolution, an emergency exists requiring suspension of the Charter rule
as to consideration and voting upon ordinances or resolutions at three
regular meetings; I/we, therefore, request that you suspend said Charter rule
and pass this ordinance or resolution finally on the date it is introduced,
or at the present meeting of the City Council.
Respectfully, Respectfully,
Council Members
MAYOR
THE CITY OF CORPUS CHRISTI, TEXAS
The above ordinance was passed
Luther Jones
Betty N. Turner
David Berlanga, Sr.
Leo Guerrero
Herbert L. Hawkins, Jr.
Dr. Charles W. Kennedy
Joe McComb
Frank Mendez
Mary Pat Slavik
y the following vote:
1 095