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DOE ASKS PIPELINE SHIPPERS TO AGREE ON BASIC CONTRACT TERMS FOR SHIPPING ELK HILLS CRUDE OIL TO STRATEGIC RESERVE

 DOE ASKS PIPELINE SHIPPERS TO AGREE ON BASIC CONTRACT TERMS
 FOR SHIPPING ELK HILLS CRUDE OIL TO STRATEGIC RESERVE
 WASHINGTON, April 8 /PRNewswire/ -- The Department of Energy (DOE) has sent prospective pipeline shippers proposed contractual language that the agency wants to have in place should it decide to ship crude oil from its Elk Hills Naval Petroleum Reserve in California to Strategic Petroleum Reserve sites in Texas.
 The proposed terms and conditions are in the form of "basic ordering agreements." Such agreements are required under federal procurement regulations before DOE can obtain goods or services from commercial firms. DOE asked the pipeline companies to tell the department by April 15 whether they can accept the standard provisions in the agreements.
 DOE hopes to have the "basic ordering agreements" in place by April 20.
 DOE issued the proposed agreements as the next step in preparing for the possibility that it may begin shipping some or all of the higher-quality Elk Hills crude oil to the Strategic Petroleum Reserve beginning in May.
 On March 20, DOE rejected bids for the purchase of crude oil the government produces from the Elk Hills field near Bakersfield, Calif. The agency cited unacceptable prices offered by prospective purchasers as the reason for its rejection. The department reissued its invitation for bids, hoping to attract better prices, with new bids due on April 15.
 At the time it rejected the bids, DOE said that if the new bids were not acceptable, it intended to explore the possibility of shipping Elk Hills crude oil by pipeline to the Strategic Reserve, the government's emergency oil stockpile sited along the Gulf of Mexico.
 Today's action does not commit the government to that option. DOE would still have to obtain specific rates, volume allotments and shipping schedules from the pipeline companies before moving the Elk Hills crude oil. Normally these arrangements are made in 30-day cycles near the end of each month.
 -0- 4/8/92
 /CONTACT: John Donnelly of the U.S. Department of Energy, 202-586-5810/ CO: U.S. Department of Energy ST: District of Columbia IN: OIL SU:


MH -- DC028 -- 6417 04/08/92 16:28 EDT
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Publication:PR Newswire
Date:Apr 8, 1992
Words:358
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