The Federal Energy Regulatory Commission gave Colorado Interstate Gas Co. (CIG) the go-ahead last Wednesday to sell a large network of jurisdictional transportation and non-jurisdictional gathering pipelines in the Panhandle Field in Texas to independent producer Pioneer Natural Resources USA Inc. for an estimated $19.5 million.

The Commission also granted a petition to reclassify all of the facilities as gathering lines upon their transfer, making them exempt from FERC oversight.

The Panhandle Field facilities consist of approximately 700 miles of pipeline in diameters that range up to 24 inches, about 42 miles of fuel gas lines in diameters of up to 20 inches, 18 field compressor units totaling 49,000 horsepower, meters and other associated facilities. Although about 102 miles of the system was certificated by FERC to carry out interstate transportation, CIG said the facilities were used mostly to perform a gathering function. The lines are located in Hartley, Moore, Potter and Hutchinson counties in Texas.

Upon completion of the sale, Pioneer plans to transfer the reclassified gathering pipeline network to affiliate Westpan Resources LP, an Irving, TX-based independent producer, gatherer and supplier of natural gas.

Pioneer currently is the single largest shipper on the CIG facilities in the Panhandle Field, owning or purchasing about 90% of the production on the system, and operates the facilities under an agreement with CIG. Seven other shippers transport the remaining 10% of the approximately 100,000 Mcf/d that is gathered from the Panhandle Field.

For those seven shippers, “Westpan intends to honor the rates, terms and conditions of existing gathering agreements with CIG for a minimum of two years following the transfer of the facilities,” the FERC order said [CP02-417, CP02-424].

CIG said the spin-off of the Panhandle Field pipeline facilities represents the final stage in its transition from a bundled service provider to a transmission- and storage-only service provider.

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