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Fayetteville-Focused Ozark Pipeline to Be Converted From Gas Service

FERC has cleared Ozark Gas Transmission LLC to abandon to an affiliate 159 miles of mainline natural gas transmission facilities that have been serving the Fayetteville Shale, where production has leveled, producers have turned away from dry gas, and new transportation alternatives have emerged, according to the company.

Ozark plans to abandon 127.5 miles of 20-inch diameter Line 1 in Franklin, Johnson, Pope, Conway, Faulkner and White counties in Arkansas as well as 4.8 miles of 12-inch diameter Line 1-A in White County, 26.4 miles of 10-inch diameter Line 2 in Sebastian, Franklin and Logan counties, and 29 associated metering and regulating facilities as well as other appurtenant facilities. The abandoned facilities are to be leased to Magellan Pipeline Co. LP for conversion to refined petroleum products service.

"Ozark states that, prior to abandonment, it will have reached agreements with all of its firm shippers on the facilities proposed to be abandoned to provide them with an alternative means for continued natural gas service," the Federal Energy Regulatory Commission said in its order [CP14-539].

"Specifically, Ozark states that it will provide its firm shippers either firm service on the remaining 16-inch diameter portion of Line 2 or an economically-viable alternative for natural gas service. Ozark also notes that the Fayetteville Express, Texas Gas' Fayetteville lateral, and Enable Gas Transmission may provide alternatives to shippers seeking incremental capacity in the region. Ozark indicates it will not seek to recover from its customers any of the costs associated with the construction of facilities to maintain gas service [see Shale Daily, Aug. 22, 2014]."

The Commission said the abandonment will not harm existing gas transportation customers. Firm customers will continue to receive service on the remaining 16-inch diameter portion of Line 2 or through another alternative, it said. FERC said open season results and a lack of firm customer protests to the plan confirm that "...there is no additional demand for long-term firm transportation on Ozark's facilities. Further, upon abandonment, there will be 40,000 Dth/d of unsubscribed transportation service available on the remaining pipeline system."

In Arkansas, Fayetteville Shale activity occurs in Cleburne, Conway, Jackson, Johnson, Faulkner, Franklin, Independence, Pope, Van Buren and White counties.

Spectra Energy Partners LP's Ozark system transports gas produced in the Arkoma Basin in eastern Oklahoma and western Arkansas, the Woodford-Caney Shale reservoir in eastern Oklahoma, and the Fayetteville Shale in central Arkansas to local distribution companies in Arkansas and Missouri and to interstate pipelines in northeastern and central Arkansas. Ozark is connected to several interstate pipelines in northeastern and central Arkansas, including Enable Mississippi River Transmission LLC, Enable Gas Transmission, Texas Gas Transmission LLC, Natural Gas Pipeline Co. of America, and Texas Eastern Transmission LP.

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