[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: <a href="/cdn-cgi/l/email-protection#b5c6d7c0c7c1dadbf5d7d9d89bd2dac3"><span class="__cf_email__" data-cfemail="5023322522243f3e10323c3d7e373f26">[email protected]</span></a>. 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            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
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2019.................................................             825             155         300 ***          210 **               9              81
--------------------------------------------------------------------------------------------------------------------------------------------------------
* 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


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