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Oasis Border-Crossing Facilities Approved by FERC

FERC last Thursday approved affiliates Oasis Pipeline LP's (Oasis) and Oasis Pipe Line Co. Texas LP's (Oasis Texas) request for Section 3 Natural Gas Act authorization and a presidential permit to build and operate pipeline facilities at the U.S.-Mexico border to export gas for use by gas-fired electric generation plants and industrial customers in northern Mexico. The border-crossing facilities were proposed as part of a much larger expansion of the Oasis system.

The proposed border facilities would transport approximately 600 MMcf/d from near the Town of Clint in El Paso County, TX, to the state of Chihuahua, Mexico [CP09-47]. The border-crossing facilities are part of the larger $3.6 million "Clint Export Project," which would include 188 miles of 36-inch diameter pipeline to extend the intrastate Oasis pipeline system from the Waha Hub in West Texas to the proposed facilities in El Paso County (see NGI, Feb. 2).

The Clint project, which is subject to the approval of Texas regulators, would be constructed and owned by Oasis Texas but operated by Oasis.

The border-crossing facilities would deliver gas to Tarahumara Pipeline S de RL de CV, which is jointly owned by Energy Transfer Mexicana LLC and Fermaca Pipeline del Altiplano S de RL de CV, for further transportation to power generators and industrial customers in the vicinity of Chihuahua, Coahuila and Durango, Mexico.

Another Energy Transfer Partners affiliate, ETC Marketing Ltd., has received approval from the Department of Energy to export natural gas to Mexico, the affiliates reported.

The Federal Energy Regulatory Commission rejected Oasis's request to be allowed to offer interruptible services under Section 311 of the Natural Gas Policy Act (NGPA) only on certain portions of its system, while refusing it on others.

"We find no merit in Oasis's argument that requiring it to offer potential shippers nondiscriminatory access to interruptible services under NGPA Section 311 could force it to become a de facto interstate pipeline against its will...Oasis is required to offer interruptible NGPA Section 311 service on its entire system, including the 188-mile expansion to be constructed in conjunction with the export/border-crossing facilities authorized by this order," the agency order said.

The existing Oasis pipeline extends from the Waha Hub to Waller County, TX. While Oasis Texas owns the Oasis pipeline system, it leases 100% of the capacity to Oasis Pipeline, which is responsible for commercial operation of the pipeline.

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