Destin Gulf Plans Would Step on Viosca's Toes

Viosca Knoll Gathering Co. finds much to dislike about Destin Pipeline's plans for a lateral to serve the Main Pass area of the Gulf of Mexico. In particular, Viosca Knoll said in protest at FERC, the Destin lateral would duplicate its own facilities on which capacity is available.

"Moreover, it is Viosca Knoll's understanding that the proposed facilities are but the first phase of a much larger plan by Destin to add to and extend the facilities proposed herein as part of a project that would parallel Viosca Knoll's system for some 45 miles along the edge of the Continental Shelf."

Destin is seeking authorization for a lateral to transport gas produced from platforms at Main Pass blocks 279 and 281. The pipe would extend from the platforms to Destin's Main Pass Block 260 platform where it would be connected to Destin's 36-inch mainline, which delivers gas to shore. The project would require about 14 miles of pipe and other facilities and cost about $19 million. Viosca Knoll said its system is essentially parallel to the route of the proposed lateral and passes near the platforms at Main Pass blocks 279 and 281. "Given the proximity of the proposed facilities to Viosca Knoll's system, the proposed facilities would gather gas that could also be gathered in Viosca Knoll's facilities, and for which Viosca Knoll has available capacity to transport that gas."

Viosca Knoll charges Destin's lateral is larger than necessary to serve the two platforms, suggesting it is one piece of a larger project. "The Commission should not permit Destin to circumvent certificate application requirements by proposing a limited portion of a much larger project under the prior notice procedures. Destin should be required to propose its entire project and not piecemeal its application so as to qualify for expedited procedures intended for minor projects."

Viosca Knoll also protests Destin's request for rolled-in rates for the new facilities "because they would provide a gathering function, the costs of which should be unbundled from Destin's existing transmission rates. Roll-in of the proposed gathering facilities would give Destin an unfair competitive advantage over Viosca Knoll and other potential gathering companies seeking to connect gas reserves in or near the deep waters of the Gulf of Mexico and constitutes nothing more than discriminatory discounting."

Joe Fisher, Houston

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