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Stingray Gets Waiver to Deal with Mounting Shipper Imbalances since Altering System Flow

Stingray Pipeline Co. LLC on Thursday was given a temporary waiver of its tariff to address the "unusually high" shipper imbalances that have occurred since the pipeline entered into an emergency arrangement last month to allow shut-in Gulf of Mexico natural gas production to flow on its system in the wake of Hurricane Rita.

In October Enbridge-owned Stingray, after receiving FERC approval, revised the historical operation of its system to allow shippers to divert and deliver their gas supplies from Stingray to an offshore interconnection with GulfTerra Energy Partners' High Island Offshore System (HIOS). By using the HIOS interconnection Stingray was able to flow up to 200 Mcf/d of production that had been shut in following Rita (see NGI, Oct. 24).

Gulf gas production on the Stingray system was shut in following Rita due to damage to the pipeline's plant in Johnson Bayou, LA, which provides liquids separation, dehydration and compression at the terminus of the Stingray system. Stingray said it plans to operate its system in this modified manner until either its Louisiana separation/dehydration plant is fully operational or the end of the 2005-2006 winter heating season.

In seeking the latest waiver, Stingray said that, due to the fact HIOS operates at a higher pressure than Stingray in the relevant area, some of its shippers have experienced abnormally high imbalances since October. The imbalances are the result of Stingray receiving more gas from its shippers than Stingray can deliver to HIOS, it said.

Stingray's current tariff requires shipper imbalances remaining after the end of the trading period (the close of business on the 17th business day of the month following the month in which the imbalance was created) to be cashed out in accordance with the formula in its tariff. Stingray asked FERC to provide affected shippers with an "additional mechanism" for resolving imbalances until its Louisiana separation/dehydration plant is fully operational or the end of March 2006.

It proposed that shippers flowing gas be allowed to transfer imbalances created during this period to their respective park accounts at Stingray's minimum rate of $0.00/Dth/d under the Rate Schedule PAL. It also requested a waiver of the one calendar month time limit to park gas under its tariff to allow its shippers to park such gas in their PAL accounts until the end of the waiver period. FERC granted both waiver requests.

"Stingray has proposed a reasonable, temporary method of permitting an additional imbalance resolution mechanism to resolve imbalances caused by the emergency arrangements made between Stingray and HIOS as a result of damage from Hurricane Rita," the FERC order said [EM06-6].

"Granting the request waivers is consistent with the Commission's intent to do everything it can to help alleviate the problems caused by Hurricane Katrina and the subsequent Hurricane Rita."

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