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Trunkline Gas Service Whittled Away to Serve Oil

FERC on Thursday reinforced its decision of last fall to allow Trunkline Gas Co. to convert a looped portion of its 770-mile natural gas line from the Gulf of Mexico to Michigan to use as an oil pipeline, saying the remaining loops were adequate to handle its firm gas service (see Daily GPI, Nov. 8, 2013).

There even should be some capacity left over for some interruptible service given that throughput has been running at 45-70% of certificated capacity, FERC said in answer to Michigan customers that worried about being short-changed. In the order on rehearing issued Thursday the Federal Energy Regulatory Commission said its only obligation is to ensure that firm customers, which pay the bulk of the pipeline charges with their reservation fees, are not displaced.

Michigan's Consumers Energy had rallied some congressional support opposing the change, which it said would result in a 40% reduction in Trunkline's gas capacity and a loss of discounted interruptible capacity. The Commission said pipelines are not constructed for the benefit of discounted interruptible customers. Trunkline said there are quite a few other mainlines converging on the northern Midwest from North, South, East and West that could serve up to 90% of its market area.

As for the Michigan Public Service Commission's concerns about future power plant demand, the Commission said no one signed up for new capacity during three open seasons, which it took as indicating a lack of future interest.

The latest abandonment would reduce Trunkline’s certificated system-wide mainline transportation service level from 1,555 MMDth/d to 958 MMDth/d through its Independence, MO compressor station, and from 1,109 MMDth/d to 920 MMDth/d out of the Texas portion of its system through the Longville, LA, compressor station.

The portion of the line to be converted will be transferred to an affiliate to be designated by its parent, Energy Transfer Equity LP, which currently is the parent of Southern Union Co., which indirectly owns 100% of the equity interest in Trunkline (see Daily GPI, Aug. 30, 2012).

This isn't the first downsizing for Trunkline. Early in the century Trunkline abandoned 720 miles of mainline looping of its gas line for conversion to carry refined products (see Daily GPI, March 30, 2001). The system originally had carried 1.8 MMDth/d of gas.

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