[Federal Register Volume 62, Number 57 (Tuesday, March 25, 1997)]
[Notices]
[Pages 14131-14132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7414]


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DEPARTMENT OF ENERGY
[Docket Nos. CP96-655-001, CP96-656-001, and CP96-657-001]


Destin Pipeline Company, L.L.C.; Notice of Amendment

March 19, 1997.
    Take notice that on March 14, 1997, Destin Pipeline Company, L.L.C. 
(Destin) successor in interest to Destin Pipeline Company Inc. (DPC), 
P.O. Box 2563, Birmingham, Alabama 35202-2563, filed in Docket No. 
CP96-655-001, et al., an amendment to the pending application for a 
certificate of public convenience and necessity filed on July 24, 1996, 
in Docket No. CP96-655-000, et al., pursuant to Section 7(c) of the 
Natural Gas Act and Parts 284 and 157 of the Commission's Regulations, 
to modify proposed facilities to include executed Precedent Agreements 
providing market support for the Destin Pipeline, to revise Destin's 
proposed FERC Gas Tariff and initial rates to provide a new flexible 
firm transportation service to meet the needs of deepwater producers 
and to renew requests for blanket certificates of construction and 
transportation, all as more fully set forth in the amendment which is 
on file with the Commission and open to public inspection.
    Destin states that in its initial filing, as supplemented, DPC 
requested authorization to construct, install and operate a new large 
diameter interstate pipeline (Destin Pipeline) to transport gas from 
the Gulf of Mexico to interconnections with five interstate pipelines 
in the State of Mississippi, Destin states that due to favorable 
reaction from the shipper community, on December 21, 1996, Amoco 
Pipeline Company (Amoco Pipeline), Shell Gas Pipeline Company (Shell 
Pipeline), Amoco Production Company (Amoco), Shell Deepwater 
Development Inc. (SDDI) and shell Deepwater Production Inc. (SDPI) 
agreed with DPC to have affiliates of Amoco Pipeline and Shell Pipeline 
become equity owners in the Destin Pipeline project. Additionally, 
Destin states that Amoco, SDDI and SDPI have executed Precedent 
Agreements dated as of February 28, 1997, for the proposed flexible 
firm transportation service on Destine Pipeline with average 
Transportation Demand (TD) levels over the first five years at 562 MMcf 
per day and peak TDs of 844 MMcf per day.
    Destin states that its initial filing requested authorization to 
construct, install, and operate one gathering platform in Main Pass 
Block 260, Gulf of Mexico; one offshore junction platform in Viosca 
Knoll Block 119, Gulf of Mexico; 76 miles of 36-inch offshore pipeline 
facilities; 134 miles of 36-inch and 30-inch onshore pipeline 
facilities; two miles of 16-inch pipeline facilities; one 14,100 
horsepower compressor station in Jackson County, Mississippi; one 
11,600 horsepower compressor station in Greene county, Mississippi; and 
related pipeline interconnection, measurement and appurtenant 
facilities to accommodate the transportation of 1 Bcf of gas per day 
for delivery to downstream interconnections in southern and central 
Mississippi. Destin states that the pipeline route was to extend in a 
northerly direction from Main Pass Block 260, Gulf of Mexico, to an 
onshore terminus at its interconnection with Southern Natural Gas 
Company (Southern) near Enterprise, Mississippi. Destin further states 
that the original filing contemplated interconnections with four other 
pipelines, as well as Southern; Florida Gas Transmission Corporation, 
Transcontinental Gas Pipe Line Corporation, Tennessee Gas Pipeline 
Company and Texas Eastern Transmission Corporation.
    Destin states that, specifically, the amended filing seeks the 
following modifications to the original proposal: (a) Several 
modifications to the jurisdictional facilities, (b) an interconnection 
with an additional interstate pipeline, (c) the deletion of the 
levelized rates for the FT-1 firm transportation service, (d) the 
addition of a flexible firm transportation service similar to that 
approved in Shell Gas Pipeline Company, 76 FERC para. 61,126 (1996), 
(e) a decrease in the proposed initial rates, (f) inclusion of capacity 
lease payments to Southern in Destin's proposed cost of service in 
accordance to the pending joint application of Southern and Destin 
filed on March 14, 1997, in Docket No. CP97-291-000, (g) revisions to 
Destin's proposed FERC Gas Tariff, primarily attributable to the 
addition of the flexible firm transportation service and the 
incorporation of the Gas Industry Standards Board standards.
    It is stated that the modifications to the facilities originally 
proposed are as follows: (a) The deletion of the junction platform in 
Viosca Knoll Block 119, Gulf of Mexico, (b) an interconnection with 
Koch Gateway Pipeline Company in Jackson County, Mississippi, (c) the 
deletion of the onshore receipt point, (d) increase compression 
capabilities at the Pascagoula compression site from 14,100 horsepower 
to 17,040 horsepower, (e) decrease compression at the Sand Hill 
compression site from 11,600 horsepower to 9,400 horsepower, and (f) in 
addition to the measurement facilities to connect to the inlet and 
outlet of a non-jurisdictional processing plant to be operated by Amoco 
in Pascagoula, Mississippi, Destin proposed to add as an auxiliary 
facility a liquids slug catcher facility in Jackson County, 
Mississippi, which will be located upstream of the site of the non-
jurisdictional processing plant. Destin estimates the revised cost of 
the proposed facilities to be $308.1 million.
    In regard to its transportation services, Destin states that it is 
deleting the 10-year levelized firm transportation services and adding 
a flexible firm transportation service. Interruptible transportation 
service under Rate Schedule IT will be applicable to any shipper that 
contracts for interruptible transportation on Destin Pipeline. In its 
amended proposal, Destin proposes to offer two firm transportation 
services: (1) A traditional firm transportation service (Rate Schedule 
FT-1) and (2) a flexible firm transportation service (Rate Schedule FT-
2). Destin states that Rate Schedule FT-1 is a traditional firm 
transportation service with a fixed TD and a reservation charge to be 
billed regardless of throughput levels. The maximum initial monthly 
reservation rate to be charged for service under Rate Schedule FT-1 is 
$7.35 per Dth, a decrease of 58 cents per Dth per month from the 
comparable rate proposed for the traditional firm rate schedule in the 
initial filing. Destin states that Rate Schedule FT-2 is a flexible 
firm transportation service which will provide for variable levels of 
TD and volumetric rate treatment depending on throughput levels 
relative to TD. Destin states that to be eligible for service under 
Rate Schedule FT-2, a shipper must execute a Reserve Commitment 
Agreement wherein the shipper identifies OCS lease(s) with estimated 
proven recoverable reserves of 100 Bcf or more attributable to the 
shipper's interests and its affiliates or aggregated with other 
shipper(s) committed interest(s) in such leases (Committed Leases) and 
make a life of reserves commitment of its share of production 
therefrom. In addition, Destin states that each shipper will be 
required to submit documentation and technical data to support its 
reserve commitment when placing a request for transportation service 
under Rate Schedule FT-2. It is

[[Page 14132]]

stated that shippers under Rate Schedule FT-2 may request separate 
levels of TD (5,000 Mcf/d minimum) for specified delivery periods of 
not less than three consecutive months to correspond with the 
anticipated production profile of the Committed Leases. It is further 
stated that the maximum monthly reservation rate for transportation 
service under Rate Schedule FT-2 is $7.35 per Dth and the maximum daily 
reservation rate for such service is 24.5 cents per Dth, inclusive of 
the transportation charge. To receive volumetric rate treatment, the 
shipper's throughput quantities (based on a rolling three-month average 
calculated with a one-month lag) must equal or exceed 70 percent of the 
shipper's average TD for the same three-month period. If a shipper's 
throughput does not reach the 70 percent threshold, the shipper is 
charged a reservation charge based on a total TD.
    Destin states that it is encouraging maximum utilization of 
capacity by establishing discounted Rate Schedule FT-2 rates for a 
period through December 31, 2019, for FT-2 shippers with firm 
transportation service pursuant to Precedent Agreements executed in 
February 1997 or pursuant to commitments in Destin's Open Season to be 
held from March 17, 1997 to April 30, 1997. Destin states that at this 
juncture, Destin is not requesting authority herein to negotiate terms 
and conditions. Service terms and conditions under Rate Schedule FT-2 
will be available to all shippers on the same generally applicable 
terms and conditions.
    Destin states that for all rate schedules, Destin has eliminated 
the offshore/onshore rate design and provided for a single rate 
independent of receipt point or delivery point location. Destin states 
that it believes that a postage stamp rate is appropriate for this 
project because most of the gas supply is expected to be received at 
Main Pass Block 260 and all of the delivery points are located within a 
115-mile segment. In addition, Destin states that it has eliminated the 
Negotiated Rate Provision in Section 25 of the proposed tariff. Destin 
further states that the addition of a flexible firm rate schedule has 
eliminated the need for the Banking Provision in Section 26 of the 
proposed tariff. Destin states that the Banking Provision was designed 
to provide scheduling flexibility to meet the needs of shippers 
coordinating development and production of deepwater prospects. Destin 
believes that the proposed flexible firm Rate Schedule FT-2 provides 
even greater flexibility and eliminates any need for a banking 
mechanism.
    Destin requests a Preliminary Determination on non-environmental 
issues by June 1, 1997, with a final approval on all issues by the end 
of November 1997, so that the proposed facilities can be placed in 
service by July 1, 1998.
    Any person desiring to be heard or to make any protest with 
reference to said amendment should on or before April 9, 1997, file 
with the Federal Energy Regulatory Commission, Washington, DC 20426, a 
motion to intervene or a protest in accordance with the requirements of 
the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 
385.211) and the Regulations under the Natural Gas Act (18 CFR 157.10). 
All protests filed with the Commission will be considered by it in 
determining the appropriate action to be taken but will not serve to 
make the protestants parties to the proceeding. Any person wishing to 
become a party to a proceeding or to participate as a party in any 
hearing therein must file a motion to intervene in accordance with the 
Commission's Rules. All persons who have heretofore filed need not file 
again.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 97-7414 Filed 3-24-97; 8:45 am]
BILLING CODE 6717-01-M