FERC Okays Transfer of CMS Trunkline Gathering

CMS Trunkline Gas Co. has received FERC approval to abandon offshore facilities and facilities located in Texas and Louisiana, transferring them to its gathering affiliate, CMS Trunkline Field Services (CP97-83). A companion order voted out by the Commission at its regular meeting last Wednesday designated those facilities as gathering, rendering them exempt from the Commission's jurisdiction under the Natural Gas Act (CP97-84).

The transfer was made at the net book value. The Federal Energy Regulatory Commission order notes that Trunkline has pledged to continue service to existing shippers for two years at terms and conditions comparable to those of Trunkline. The gathering lines include about 251 miles of two-inch to 24-inch pipe in Beauregard Parish in Louisiana, 11 counties in Texas and in the Vermilion, Ship Shoal, South Timbalier, Ewing Bank and Grand Isle waters off the coast of Louisiana.

CMS Trunkline Gas had filed for abandonment in 1996 before FERC had completed work on its gathering policy, and its policy on regulation of offshore pipelines. A number of interstate pipelines have restructured their systems and spun off their gathering lines after FERC relieved them of their merchant function. The offshore lines will still be subject to the Commission's jurisdiction under the Outer Continental Shelf Lands Act.

The pipeline unit had requested the spin-off, saying it no longer needed the integrated facilities, since it no longer had to meet certificated sales obligations. It also pointed out the action was consistent with Order 636 which called for an unbundling of services.

CMS Trunkline has done some other restructuring lately, separating out one of its three parallel long lines north from the Gulf to Illinois and converting it to carry refined petroleum products. That project should be completed in January of next year. The company also purchased Sea Robin Pipeline and is considering connecting it to the Trunkline offshore facilities to add new supplies to the west of its offshore system.

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