Natural Gas Pipeline Company of America (NGPL) is seeking agreen light to sell off 110 miles of offshore supply laterals andcertain abandoned, retired facilities in the Gulf of Mexico toGreen Canyon Pipe Line Co. LLC for an estimated $1.3 million.

The transaction, if approved by FERC, would reduce Natural’sremaining offshore lateral holdings by one third. This would be inaddition to the one third that it sold previously, according to theKinder Morgan pipeline.

Since Order 636, “Natural has been in the process of sheddingmany of its [offshore] gas supply facilities…..Because of thelarge number of gas supply facilities which Natural owns, this hasbeen a lengthy and on-going process,” it told the Commission.

With the sale, Green Canyon — which is owned by El Paso EnergyPartners L.P. (EEP) — will be able to significantly expand itsgathering system in the Gulf. Its existing system is comprised of66 miles of 10- to 20-inch diameter pipe.

Not only will Green Canyon acquire 110 miles of lateral pipelinefrom Natural, but it also will pick up about 71 miles of”previously abandoned, retired-in-place pipe,” which Natural saidwould help both EEP and Green Canyon “advance their goals.” Uponthe sale and transfer of the facilities to Green Canyon, Naturalhas requested that they be considered non-jurisdictionalgathering.While the facilities are important to Green Canyon, theyare “no longer of strategic benefit” to Natural, according to thepipeline. “Production from the wells interconnecting thesefacilities has declined over the years along with relatedtransportation revenues…..Only seven of the twenty-six lateralsto be abandoned herein have flowed gas within the last year.”

The lateral facilities are located in East Cameron, WestCameron, Eugene Island, South Marsh Island, the Vermilion areasoffshore Louisiana and the High Island area offshore Texas. Most ofthe laterals are interconnected with the High Island OffshoreSystem, U-T Offshore System and Pelican Interstate Gas System.Natural said its expects to file another application to abandon itslateral facilities that are connected to Stingray Pipeline.

Natural said no firm transportation contracts would be affectedby the sale of the laterals. All customers served by the facilitiesreceive interruptible service. Green Canyon has vowed to continueserving the current IT customers of Natural at “mutually acceptablerates, terms and conditions of service,” according to the pipeline.

Susan Parker

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