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FERC OKs Mississippi Canyon Expansion

FERC OKs Mississippi Canyon Expansion

Mississippi Canyon Gas Pipeline won blessing in a draft order from the FERC for firm capacity expansion from 600 MMcf/d to 800 MMcf/d. Mississippi Canyon - formerly Shell Gas Pipeline - operates a 45-mile dual-phase line from the West Delta Block 143 "A" platform on the Outer Continental Shelf offshore Louisiana to terminus near the Venice Gas Plant in Plaquemines Parish onshore in Louisiana. The capacity increase is to come from establishing maximum receipt and delivery point pressures and installation of additional metering facilities on the pipeline's existing system at the Venice plant delivery point.

Mississippi Canyon also was granted a predetermination for rolled-in rates as the Commission found system-wide benefits to be derived from the expansion. In approving the expansion the Federal Energy Regulatory Commission denied protests of Conoco and Exxon and exempted the expansion from its contract policy.

"Mississippi Canyon's proposal does not include long-term contracts for a significant percentage of firm capacity of the proposed facilities. However, the Commission has recognized that it is in the public interest to encourage the timely and orderly development of an interstate pipeline infrastructure to support is planned development and production activities in the Gulf of Mexico."

Exxon had questioned the need for the expansion facilities and the rate impact of the expansion. Conoco questioned rate impact and requested Mississippi Canyon be required to file a Section 4 rate case or that the Commission initiate a Section 5 investigation into rates. All of these were denied by the FERC. BP Exploration & Oil filed to intervene and protest the application but subsequently withdrew its protest.

Mississippi Canyon said the expansion is needed to serve deep-water gas fields producing or under development in the Mississippi Canyon area in the deep-water regions of the Gulf. The system has direct interconnections via the tailgate of the Venice plant with Koch Gateway, Southern Natural Gas, Texas Eastern Transmission, and Columbia Gulf Transmission. Five deep-water fields - Mars, Mensa, Ursa, Europa, and King - are or will be supplying Mississippi Canyon. Mars, Mensa, and Ursa are committed for the life of the least to Mississippi Canyon by existing reserve commitment agreements. Mississippi Canyon told the FERC it expects all of the production from the Europa and King fields will be committed by reserve commitment agreements.

Mars currently produces about 140 MMcf/d in addition to oil production. Mensa has a sustained flow of 260 to 280 MMcf/d. Ursa is scheduled to begin production by mid-year with rates ramping up over a three- to four-year period to a peak of 350 to 450 MMcf/d. Europa and King production will be processed on the Mars tension leg platform. Europa is expected to begin producing next year with a peak rate of 60 MMcf/d. King is scheduled to come on line in 2001 with a peak rate of 6 MMcf/d

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