Natural Proposes Sale Of One-Third of Gulf Assets
Natural Gas Pipeline Company of America (NGPL) is seeking a
green light to sell off 110 miles of offshore supply laterals and
certain abandoned, retired facilities in the Gulf of Mexico to
Green Canyon Pipe Line Co. LLC for an estimated $1.3 million.
The transaction, if approved by FERC, would reduce Natural's
remaining offshore lateral holdings by one third. This would be in
addition to the one third that it sold previously, according to the
Kinder Morgan pipeline.
Since Order 636, "Natural has been in the process of shedding
many of its [offshore] gas supply facilities.....Because of the
large number of gas supply facilities which Natural owns, this has
been a lengthy and on-going process," it told the Commission.
With the sale, Green Canyon --- which is owned by El Paso Energy
Partners L.P. (EEP) --- will be able to significantly expand its
gathering system in the Gulf. Its existing system is comprised of
66 miles of 10- to 20-inch diameter pipe.
Not only will Green Canyon acquire 110 miles of lateral pipeline
from Natural, but it also will pick up about 71 miles of
"previously abandoned, retired-in-place pipe," which Natural said
would help both EEP and Green Canyon "advance their goals." Upon
the sale and transfer of the facilities to Green Canyon, Natural
has requested that they be considered non-jurisdictional
gathering.While the facilities are important to Green Canyon, they
are "no longer of strategic benefit" to Natural, according to the
pipeline. "Production from the wells interconnecting these
facilities has declined over the years along with related
transportation revenues.....Only seven of the twenty-six laterals
to be abandoned herein have flowed gas within the last year."
The lateral facilities are located in East Cameron, West
Cameron, Eugene Island, South Marsh Island, the Vermilion areas
offshore Louisiana and the High Island area offshore Texas. Most of
the laterals are interconnected with the High Island Offshore
System, U-T Offshore System and Pelican Interstate Gas System.
Natural said its expects to file another application to abandon its
lateral facilities that are connected to Stingray Pipeline.
Natural said no firm transportation contracts would be affected
by the sale of the laterals. All customers served by the facilities
receive interruptible service. Green Canyon has vowed to continue
serving the current IT customers of Natural at "mutually acceptable
rates, terms and conditions of service," according to the pipeline.
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