El Paso Natural Gas should not be permitted to give only partial reservation credits to shippers whose natural gas deliveries have been interrupted due to a scheduled maintenance event on the pipeline, a group of producers and marketers said.
In a protest filed at FERC, eight producers and marketers called on the Commission to reject a proposed tariff revision that would allow El Paso to credit back to shippers only part of their reservation charges for non-delivery of gas due to pipeline maintenance, whether scheduled or unscheduled [RP04-34-000]. El Paso’s proposal flouts FERC precedent that requires shippers to be awarded full reservation charge credits for non-force majeure events, they said.
“Only unscheduled maintenance should be treated similar to force majeure and subject to partial demand charge credits,” said Aera Energy LLC, BP America Production, BP Energy Co., Burlington Resources Oil & Gas LP, Texaco Natural Gas Inc., ConocoPhillips Co., Coral Energy Resources LP and Occidental Energy Marketing Inc. Most often, they said unscheduled maintenance is due to an “operational problem and [is] a ‘no-fault’ occurrence.”
But “scheduled maintenance is a planned activity and the timing of this activity is in the exclusive control of the pipeline,” the producer/marketer group noted. “The pipeline should have the incentive to schedule maintenance when the pipeline is not full to avoid disruption of firm service, and to limit maintenance to the smallest number of days required in order to [reduce] the economic loss to shippers and their customers. As such, full reservation charge credits should be given for non-delivery of gas due to scheduled maintenance activity.”
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