[Federal Register Volume 60, Number 104 (Wednesday, May 31, 1995)]
[Notices]
[Pages 28400-28401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13228]



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DEPARTMENT OF ENERGY
[Docket No. CP95-500-000, et al.]


Southern Natural Gas Company, et al.; Natural Gas Certificate 
Filings

May 23, 1995.
    Take notice that the following filings have been made with the 
Commission:

1. Southern Natural Gas Company

[Docket No. CP95-500-000]

    Take notice that on May 15, 1995, Southern Natural Gas Company 
(Southern), Post Office Box 2563, Birmingham, Alabama 35202-2563, filed 
in Docket No. CP95-500-000 an application pursuant to Section 7(c) of 
the Natural Gas Act for a certificate of public convenience and 
necessity authorizing the construction, installation and operation of 
certain compression facilities and related pipeline interconnection, 
measurement, and appurtenant facilities, all as more fully set forth in 
the application which is on file with the Commission and open to public 
inspection.
    Southern states that the proposed facilities will provide the 
capacity needed to perform firm transportation service on its pipeline 
system in its production area south of its Franklinton Compressor 
Station. It is stated that Southern has an extensive supply system in 
the offshore Louisiana area and receives approximately 900,000 Mcf per 
day (Mcdf) or nearly 60 percent of its annual throughput from the 
``east leg'' of its South Louisiana supply system that accesses the 
Main Pass, Viosca Knoll and Mississippi Canyon areas. Southern contends 
that its efforts to connect new gas supplies in this area and increase 
throughput have been hampered recently as a result of capacity 
constraints which exist at Southern's Toca Compressor Station. If it is 
unable to increase its capacity to move gas from the offshore areas, 
Southern states that the markets and customers served by Southern's 
system will not have the opportunity to gain access to the significant 
number of new sources of supply announced and under development in this 
area.
    Southern states that its recent gas supply attachment efforts have 
been focused on supply prospects which are near Southern's existing 
facilities. It is stated that a large number of such prospects are 
located in the offshore Louisiana are upstream of Southern's Toca 
Compressor Station. Southern states that its supply system in south 
Louisiana has two separate main lines, the ``east Leg'' which extends 
in to the Main Pass area and the ``west leg'' which extends from the 
Franklinton Compressor Station to the Shadyside Compressor Station. It 
is stated that the ``west leg'' has traditionally received gas from 
interconnections with other interstate pipelines, and supply prospects 
in the area are limited. Therefore, Southern states that its ``east 
leg'' upstream of the Toca Compressor Station has experienced the most 
activity in connecting new gas supplies. It is stated that gas supply 
prospects in this area are believed to be substantial. Southern states 
that Exhibit Z to its application contains a map and a list of known 
prospects in the vicinity of Southern's existing facilities which could 
be attached either through jurisdictional pipeline extensions or 
through nonjurisdictional gathering lines to Southern's system. While 
the potential of many of these prospects is still emerging, Southern 
believes that the substantial financial expenditures by producers and 
technological advances in the development of deepwater prospects ensure 
that the expansion of Southern's facilities to provide access to 
downstream markets from this supply area is necessary. It is stated 
that the gas supply prospects listed in Exhibit Z are estimated to 
contain over 2 Tcf of reserves which could be attached to Southern's 
system. Southern also believes that the location of these prospects 
make them the most economical gas supplies available to Southern's 
system in the near term and foreseeable future. However, in order to 
compete with other pipelines for these shippers and customers, Southern 
states that it must expand its existing capacity at Toca to enable 
these supplies to flow into downstream markets.
    It is stated that prior to the recent industry restructuring under 
Order No. 636, pipelines generally constructed gas supply facilities 
and included the cost of the facilities in future rate filings on a 
rolled-in basis. In a post-636 environment, Southern states that the 
issue of who should bear the financial responsibility for this type of 
project is more complicated. It is stated that this expansion project 
is not a traditional [[Page 28401]] market area expansion. Southern 
states that this expansion is an enhancement of its current facilities 
to enable Southern to transport an additional 140 MMcfd through its 
Toca Compressor Station, which is currently operated at or near full 
capacity. Southern contends that it has determined that the gas supply 
is available and has identified the facilities modifications required 
to relieve its system bottleneck at Toca. According to Southern, the 
major unresolved issue in the post-636 environment is which industry 
segment should initially pay the cost of this type of system 
enhancement. Southern states that the distribution segment of the 
industry believes that producers should contribute to the cost of 
expanding facilities in order to make their gas supplies available to 
the market. It is stated that producers have taken the lead in 
constructing facilities to attach gas supply to the existing pipeline 
infrastructure but do not believe that they should bear the additional 
cost of expanding jurisdictional pipeline capacity required to move new 
supplies downstream. At the same time, Southern argues that it would be 
unfair to expect interstate pipelines to make substantial investments 
in new facilities without an opportunity to earn a reasonable return on 
their investments.
    To strike an appropriate balance, Southern states that its proposal 
is an effort to allocate among the stakeholders the cost of this 
expansion project that benefits the system as a whole. It is stated 
that the cost sharing proposal represents a reasonable sharing--between 
the producers for the first 10 years and the transportation customers 
thereafter--of the costs required to expand Southern's production area 
capacity. By adding additional compression at its Toca Compressor 
Station, Southern states that it will increase its capacity to 
transport gas supplies through Toca by 140 MMcfd. In addition, Southern 
submits that it will require, as part of the transportation agreement, 
a commitment from the producers to attach 150 Bcf of new reserves for 
every 50 MMcfd of Transportation Demand, or approximately 400 BCF of 
additional reserves to Southern's system. Based upon extensive 
discussions with producers that have prospects in the areas near 
Southern's supply system and with Southern's transportation customers, 
Southern believes that an expansion of its Toca Compressor Station as 
proposed would benefit the system as a whole and is in the public 
interest.
    It is stated that producers would benefit from obtaining firm 
transportation service in Southern's production area at a competitive 
rate. With firm service to the interconnections Southern has with other 
interstate pipelines in this area, Southern contends that the producers 
will have assured access to a substantial portion of the natural gas 
markets in the eastern United States. It is stated that they can elect 
to sell any of the new gas supplies they connect to the Southern system 
to markets served by the Southern system, and in such case, those gas 
supplies would likely be transported under the purchaser's firm and/or 
interruptible transportation service agreements.
    Southern states that the requirement that producers commit to 
attach new reserves to the Southern system provides a substantial 
benefit to Southern's firm and interruptible transportation customers. 
It is stated that they will have the opportunity to compete for these 
new sources of supply without incurring, under Southern's proposed rate 
treatment, any increase in their transportation costs as a result of 
the construction of the facilities for an initial 10-year period. 
Whether these new supplies are transported in the production area under 
one of the new 10 year service agreements or to a market on the 
Southern system, Southern submits that the proposed expansion of the 
Toca Compressor Station will eliminate a capacity constraint and enable 
an additional 140 MMcfd to flow into the Southern system via the ``east 
leg''. It is stated that this increase in the ``east leg'', however, 
will not cause an increase in capacity on Southern's main line.
    Southern requests that the Commission act on its request in two 
steps. First, Southern requests that the Commission issue an initial 
determination that the construction and operation of the proposed 
facilities to provide capacity necessary for the performance of firm 
production area transportation services on the terms and conditions 
described in the application are required by the present or future 
public convenience and necessity. Southern states that it is willing to 
accept an at-risk condition in the initial determination because its 
application does not include the requisite showing of market demand. 
Second, after it has submitted executed Firm Transportation Service 
Agreements for 100 percent of the additional capacity containing the 
terms and conditions described herein and after completion of the 
environmental review of the proposed facilities, Southern requests that 
the Commission issue an order adopting the initial decision as its 
final action in this proceeding and removing the at-risk condition.
    Comment date: June 13, 1995, in accordance with Standard Paragraph 
F at the end of this notice.
2. ANR Storage Company

[Docket No. CP95-504-000]

    Take notice that on May 18, 1995, ANR Storage Company (ANR), 500 
Renaissance Center, Detroit, Michigan 48243, filed in Docket No. CP95-
504-000, pursuant to Section 7(b) of the Natural Gas Act (NGA), as 
amended, and Secs. 157.7 and 157.18 of the Commission's Regulations 
thereunder, an application requesting permission and approval for 
abandonment of storage service performed for United Cities Gas Company 
(United Cities), all as more fully set forth in the application on file 
with the Commission.
    ANR states that it is requesting authorization for retroactive 
abandonment of storage service that it provides for United Cities under 
Rate Schedule X-6 and contained in Original Volume No. 2 of its FERC 
Gas Tariff. This service was authorized in Docket No. CP79-453-000. ANR 
requests the abandonment of Rate Schedule X-6 effective April 1, 1995, 
the date of the termination agreement between ANR and United Cities. 
ANR further states that at United Cities' request, commencing April 1, 
1995, this service would be provided under ANR's FERC Gas Tariff, 
Original Volume No. 1.
    ANR states that no facilities are proposed to be abandoned.
    Comment date: June 13, 1995, in accordance with Standard Paragraph 
F at the end of this notice.

Standard Paragraphs

    F. Any person desiring to be heard or to make any protest with 
reference to said application should on or before the comment date, 
file with the Federal Energy Regulatory Commission, Washington, D.C. 
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.
    Take further notice that, pursuant to the authority contained in 
and subject to the jurisdiction conferred upon the Federal Energy 
Regulatory Commission by Sections 7 and 15 of the Natural Gas Act and 
the Commission's Rules of Practice and Procedure, a hearing will be 
held without further notice before the Commission or its designee on 
this application if no motion to intervene is filed within the time 
required herein, if the Commission on its own review of the matter 
finds that a grant of the certificate and/or permission and approval 
for the proposed abandonment are required by the public convenience and 
necessity. If a motion for leave to intervene is timely filed, or if 
the Commission on its own motion believes that a formal hearing is 
required, further notice of such hearing will be duly given.
    Under the procedure herein provided for, unless otherwise advised, 
it will be unnecessary for applicant to appear or be represented at the 
hearing.
    G. Any person or the Commission's staff may, within 45 days after 
issuance of the instant notice by the Commission, file pursuant to Rule 
214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to 
intervene or notice of intervention and pursuant to Sec. 157.205 of the 
Regulations under the Natural Gas Act (18 CFR 157.205) a protest to the 
request. If no protest is filed within the time allowed therefor, the 
proposed activity shall be deemed to be authorized effective the day 
after the time allowed for filing a protest. If a protest is filed and 
not withdrawn within 30 days after the time allowed for filing a 
protest, the instant request shall be treated as an application for 
authorization pursuant to Section 7 of the Natural Gas Act.
Lois D. Cashell,
Secretary.
[FR Doc. 95-13228 Filed 5-30-95; 8:45 am]
BILLING CODE 6717-01-P