Rockies Express Pipeline LLC (REX) received a certificate of public convenience and necessity from FERC Thursday to allow the company to open its existing Seneca Lateral to transportation service under the federal Natural Gas Act (NGA).
The Federal Energy Regulatory Commission ruled that REX’s proposal to change its authorization from Section 311 of the Natural Gas Policy Act (NGPA) to Section 7 of the NGA, which would not involve any new construction, would not harm REX’s ability to serve existing customers and would “broaden the range of transportation services that can be provided on the facilities.”
After originally constructing the Seneca Lateral under section 311 of the NGPA, which limits the lateral to intrastate or local distribution company shippers, REX applied for a certificate under FERC’s NGA jurisdiction on March 2, 2015.
REX currently has a shipper on the Seneca Lateral with a 20-year contract for 600,000 Dth/d, according to FERC. The section 7 certificate would allow the pipeline to market to anyone interruptible service for capacity not in use.
REX, a critical outlet for gas produced in the Appalachian Basin to get to Midwest markets, recently received FERC approval to expand its Zone 3 East-to-West capacity by 800,000 Dth/d (see Daily GPI, Feb. 29).NGI recently updated its REX Zone 3 Tracker to provide a more detailed snapshot of daily westbound flows on the pipeline (see Daily GPI, Feb. 19).
“While Rockies Express has been involved in disputes with its existing mainline shippers regarding changing their delivery points to more western points on the mainline and the rates they will pay for the east-to-west service that was not available at the time they entered into their existing service agreements, granting Rockies Express a certificate to use its Seneca Lateral for NGA service will not adversely affect Rockies Express’s ability to meet its obligations under its existing service agreements or the quality of service under those existing services agreements,” FERC wrote.
The 14.7-mile Seneca Lateral runs from MarkWest Energy Partners LP’s Seneca Processing Plant in Noble County, OH, to a nearby interconnection with the REX mainline.
REX initially placed the Seneca Lateral into service in June 2014, installing additional compressor units to bring the total capacity up to 600 MMcf/d by January 2015.
Since the application would not involve additional construction, FERC did not conduct an environmental assessment of REX’s proposal.
Tallgrass Development LP now owns a 75% stake in the 1,698-mile REX, which stretches from northwestern Colorado and Wyoming to eastern Ohio, after paying $440 million to a unit of Sempra Energy to acquire its share of the pipeline (see Daily GPI, March 30).