Transco's SELA Connection Approved
Transcontinental Gas Pipe Line may construct its 53-mile
Southeast Louisiana Crossover (SELA) offshore Louisiana, the
Federal Energy Regulatory Commission said in an order voted out
Wednesday, but it will be at risk to recover its costs.
By connecting Transco's Southeast Louisiana Gathering System
with its Central Louisiana Gathering System the crossover, plus
compression, will provide up to 264 MMcf/d in incremental capacity
from offshore to Station 50 on its mainline at Eunice, LA. The
Commission agreed Transco should be allowed to charge non-SFV rates
in order to compete with other offshore pipelines with similar
Transco has only one firm customer signed up at a discounted
rate for 220 Bcf over ten years, which would average out to about
15% of capacity over time and guarantee the recovery of only $2
million of the $16.7 million annual cost of service. Under these
circumstances Transco will have to bear the risk of failure to fill
up the line.
FERC turned down interveners' requests to have the crossover
declared non-jurisdictional, saying it already had denied attempts
to have the two systems it connects classified as gathering since
they were made up of extensive pipelines with significant
diameters, indicating transmission. FERC approved negotiated rates
proposed by Transco under three different rate schedules.
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