FERC Thursday approved the requests of several companies to abandon by sale all or virtually all of their pipeline facilities in the Gulf of Mexico, as well as some onshore facilities.
The companies seeking abandonment of their GOM facilities were ANR Pipeline, Trunkline Gas Co. and Southern Natural Gas Co. LLC [CP11-543, CP12-5, CP12-4, respectively]. The Federal Energy Regulatory Commission (FERC) gave ANR the go-ahead to abandon by sale to TC Offshore LLC, an ANR subsidiary, approximately 600 miles of pipeline, seven offshore platforms, and measurement, compressor, separation and dehydration and associated facilities. The facilities include three gathering and transmission systems: the Patterson System, extending upstream of the Patterson Station in St. Mary Parish, LA; the Grand Chenier System, extending upstream of the Grand Chenier Station in Cameron Parish, LA; and the Central Texas Gathering System, extending upstream of an onshore terminal in Wharton County, TX.
Similarly, FERC approved Southern Natural Gas' proposal to abandon to Houston-based High Point Gas Transmission LLC 604 miles of natural gas pipeline and associated pipeline facilities, both offshore and onshore. The so-called "South of Toca" facilities are on the east leg of Southern's pipeline system. High Point is not an affiliate of Southern.
Trunkline proposed to abandon to affiliate Sea Robin Pipeline Co. LLC about 533 miles of pipeline, eight platforms and associated facilities. The proposed sale represents virtually all of Trunkline's offshore facilities, including facilities in which it holds a partial interest.
Combined, the ANR facilities to be abandoned would have a deliverable capacity of up to 2.11 Bcf/d, according to the order issued by FERC.
In the application seeking the abandonment, which was filed last September, ANR said it no longer wished to be in the business of transporting offshore gas. It further said the recent and dramatic changes in supply patterns and gas flows across its system have caused it to realign its pipeline assets. The other pipelines expressed similar sentiments.
A number of producers -- including Apache Corp., LLOG Exploration Co. LLC, Indicated Shippers, W&T Offshore, McMoRan and the Producer Coalition -- protested ANR's abandonment proposal, saying it was an inappropriate attempt by ANR to charge higher rates without having to file a Section 4 rate case under the Natural Gas Act.
To support their arguments, producers cited a case in which Northern Natural Gas asked FERC for -- but was denied -- authorization to abandon its Matagorda Offshore Pipeline System [MOPS]. But FERC cited a key difference between the two cases. "Here, unlike in MOPS, ANR is not proposing to retire its offshore facilities from service. As proposed, continued service will be available from TC Offshore," the order said.
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