Rockies Express Pipeline (REX) shippers have accused Northern Natural Gas of limiting access to receipt point capacity at the interconnection between the REX and Northern Natural systems to REX shippers that agree to purchase a "phantom backhaul service."
"The REX Shippers have a direct interest in the unlawful, unjust and unreasonable charge [$0.3679/Dth] imposed by Northern for such phantom backhaul service. Any transportation fees charged by Northern for phantom backhaul service directly impact, and reduce, the market prices that shippers on the Northern system will pay the REX shippers for Rocky Mountain gas supplies delivered to the Northern system through REX," said producer Ultra Resources Inc. and Sempra Rockies LLC, the two prospective REX shippers that brought the complaint.
In the complaint filed Thursday, the REX shippers also challenged "Northern's failure to post the capacity at the REX receipt point as available for subscription by firm market-area shippers for use as a substitute primary receipt point by existing Northern shippers holding firm forward-haul transportation capacity in Northern's market area."
The interconnect between REX and Northern Natural in Gage County, NE, will be a "substantial receipt point" on the Northern system, according to Ultra Resources and Sempra Rockies. Ultra holds 50,000 Dth/d and Sempra Rockies holds 5,830 Dth/d of primary firm delivery point capacity at the REX interconnect with Northern.
"Together the REX shippers control a substantial portion of the primary firm delivery point capacity at the Rockies Express/Northern interconnect and, therefore, have a direct interest in the allocation of primary receipt point capacity by Northern," they said.
The two REX shippers called on FERC to find Northern Natural's failure to post REX receipt point capacity on its electronic bulletin board and the alleged tying of the availability of point capacity at the REX receipt point to phantom backhaul service to be "unjust, unreasonable and unlawful."
They further asked that Northern Natural's recent open season be "voided and set aside, and that Northern be directed to conduct another open season for primary point capacity at the REX receipt point without tying such point capacity to a requirement that the shipper subscribe to backhaul transportation service from the REX receipt point to Demarc."
In addition, the shippers urged FERC to declare Northern Natural's proposed charge for the phantom backhaul service to be "unjust and unreasonable."
©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.