El Paso's Bid to Hike Export Capacity Opposed

Southwest local distribution utilities and municipal distributors have called on FERC to reject, or convene a technical conference to consider, El Paso Natural Gas' application to boost export capacity on the Samalayuca Lateral by about 100 MMcf/d to meet natural gas demand in northern Mexico. They argue that such action would deprive existing El Paso customers of already-tight capacity on the pipeline's South Mainline.

There are a number of ongoing cases at the Commission addressing the limited capacity on the El Paso system, and its capacity-allocation procedures, the distributors pointed out. "Yet...El Paso proposes to allow a unilateral reallocation of 100,000 Mcf/d of capacity to serve customers outside the United States without fully disclosing from which customer the capacity will come and its likely impact on all these pending matters," said Southern Union Gas Co. The utility asked the Commission to convene a technical conference.

Southwest Gas Corp. and the El Paso Municipal Customer Group said they were concerned the proposed increase in the lateral's capacity may "adversely affect" them and other customers because capacity on the South Mainline would be needed to move the additional export load. FERC "should not approve increased export capacity without a corresponding increase in mainline capacity" on El Paso's system, they said.

Southwest and the municipal distributors urged the Commission to either: 1) reject the El Paso application outright; 2) in the alternative, set the case for hearing to assess the impact on existing customers; or 3) absent rejection or hearing, defer consideration of the application until other pending cases related to the level of capacity on El Paso are resolved.

In its application, El Paso asked FERC for the go-ahead to increase the maximum daily export capacity on the lateral by about one-third to 308 MMcf/d to correspond with the "rapid development" of the gas infrastructure in the northern Mexico state of Chihuahua. It said it already had entered into a long-term agreement for the entire proposed increase of 100 MMcf/d of export capacity with MGI Supply Ltd (See NGI, Sept. 3).

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