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El Paso's Bondad Project Hangs in Limbo

El Paso's Bondad Project Hangs in Limbo

FERC last week vacated its August order certificating El Paso Natural Gas Co.'s planned expansion of its 33-mile Bondad system, a move that the pipeline says puts the troubled project in an uncertain status.

"We don't know what we're going to do. We're looking at the order and are considering" the various options, said Jerry Strange, El Paso's director of transportation and marketing. He was unable to say when the pipeline would decide the fate of the project.

The Commission said it based its action on Enron Capital &amp Trade Corp.'s decision to terminate its service agreement for 100,000 Mcf/d of the expansion's capacity, which left the project only 14% subscribed. Two other shipper-producers, Conoco Inc. and Elm Ridge, remain committed to the project, Strange said.

"Enron's withdrawal...is a material change in the circumstances relied on by the Commission in making its public convenience and necessity determination" last August, the order said, adding that the Bondad expansion as a result no longer meets FERC's market-demand requirement (25% subscribed) for new projects. The Commission, however, left open the possibility for El Paso to re-file in the event it can re-market the Enron capacity.

The project called for the replacement of compression at El Paso's Bondad station, upping the horsepower such that 116,000 Mcf/d of capacity would be added between its interconnect at San Ignacio with Northwest Pipeline and Blanco in New Mexico.

FERC had further bad news last week for the future of the project. Although vacating the certificate also mooted El Paso's rehearing request, the Commission decided to offer its "guidance" on the rehearing issues raised by the pipeline. It reasoned that the outcome of the issues could affect "whether and under what conditions" El Paso would re-file its application. El Paso struck out on all counts.

The Commission reaffirmed its previous decision rejecting the pipeline's request for incremental service for the Bondad project shippers. Because the project would provide system-wide benefits, the Commission continued to hold that El Paso's existing FT-1 rate schedule was sufficient. El Paso's proposal for incremental service "would create, without any justification, a preferred class of firm shippers enjoying rate and capacity benefits...[that are] not available to current firm shippers," the order said [CP98-149-001]. It also reaffirmed its decision to reject El Paso's capacity-allocation plan that would, according to FERC, give Bondad project customers "preferential access" to capacity through the use of a separate service.

In a separate case, FERC gave El Paso the go-ahead to abandon three segments, totaling 49 miles, of its El Paso-Douglas Line in Dona Ana and Luna Counties, NM. "El Paso no longer needs Line 1005 for the operation of its interstate transmission system. Further, our review of the record indicates that the proposed abandonment will not adversely affect any of El Paso's customers," the Commission order said [CP98-717].

Susan Parker

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