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Texas Power Plant Lone Holdout in Pipeline Abandonment

Natural Gas Pipeline Co. of America (Natural) is seeking to abandon Texas-Oklahoma pipeline and related facilities it says are failing and no longer needed by firm shippers except for one power generator that has yet to reach agreement with the company.

Natural filed at FERC [CP14-548] for permission to abandon a portion of its Oklahoma Extension No. 1 (Segment 1), which originates in Wise County, TX, and crosses Montague County in Texas, as well as Love and Carter counties in Oklahoma. Natural wants to sell the asset to Devon Gas Services LP (DGS), which would repurpose it for gathering service. The abandonment sought would also include a compressor station, a pipeline tap in Love County, a lateral in Wise County and various other taps and meters.

"Natural has discovered numerous pipeline anomalies and defects on the 20-inch Segment 1 pipe," the company told the Federal Energy Regulatory Commission (FERC). The pipeline coating has disbonded from the pipe but remains intact, which prevents the use of cathodic protection. Further, the legacy pipe was manufactured with a process now known to result in a heightened incidence of seam defects, Natural said.

The pipeline said it has worked out alternatives with all of the firm shippers that would be affected save for Brazos Electric Power Cooperative, whose gas-fueled power plant in Jack County, TX, has a primary delivery point on Segment 1. The Jack County plant has two 620 MW units, the newest of which entered service three years ago.

"This power plant is also connected to a number of other natural gas pipelines serving the region," Natural told FERC. "In fact, the 10,000 Dth/d of firm capacity under Brazos Electric's agreement comprises only a small portion of the total capacity of the plant."

Via two header systems, the Jack County plant is connected to facilities of Energy Transfer Co., Enterprise Products Partners LP, and Nortex Midstream Partners LLC (Nortex-Worsham Steed), as well as to Natural's Segment 1, according to Natural. "The interconnection with Nortex-Worsham Steed provides access to storage, Atmos Energy Corp., Enterprise, and Energy Transfer," Natural said. "Thus, there is only one firm transportation shipper that has a delivery point on the Segment 1 facilities, and this shipper has other pipeline transportation alternatives available to serve its power plant."

As of Thursday, there was no Brazos filing available in the docket. Brazos spokesman Kyle Minnix, after checking with the cooperative's lawyers, told NGI he could not comment on Natural's proposed abandonment. Discussions between Brazos and Natural are ongoing, according to the pipeline's filing.

Brazos is a 3,595 MW generation and transmission cooperative whose service territory extends across 68 counties from the Texas Panhandle to Houston. It was the state's first power cooperative in 1941 and is the largest, providing generation and transmission to 16 distribution cooperatives and one municipal power system.

The condition of the pipeline Natural wants to abandon is poor enough to have necessitated multiple reductions in operating pressure, beginning in October 2001 with a reduction to 910 psig with the latest reduction coming in January, cutting pressure to 561 psig, according to the filing. Natural currently cannot move gas northbound out of Segment 1 due to the pressure reductions, it said, and further pressure reductions are expected to be needed.

"Abandonment by sale to DGS allows for the economic use of facilities that otherwise Natural could no longer use and would have to abandon," the pipeline told FERC. In the case of abandonment, DGS would seek non-jurisdictional status for the former interstate facilities.

Brazos is one of seven firm shippers on the facilities and the only delivery point shipper. The six firm receipt point shippers "...have secured comparable transportation alternatives on Natural's system," the pipeline said. "Accordingly, as of the date of this application, there are no firm shippers with primary receipt points on Segment 1."

In the course of the abandonment, Natural would also abandon the tap that connects the Love County Lateral to Segment 1. Three shippers on the lateral account for 3,300 Dth/d of load. Natural said it would construct a nine-mile, six-inch diameter pipeline to serve these customers before disconnecting the lateral tap.

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