FERC on Thursday gave CenterPoint Energy-Mississippi River Transmission Corp. the green light to abandon 307 miles of 75-year-old pipeline facilities in northern Louisiana, Arkansas and southern Missouri.
Specifically, Mississippi River plans to abandon more than 300 miles of its 22-inch diameter, 1929-vintage Main Line No. 1 system, which extends from Perryville, LA, to a compressor station at Poplar Bluff, MO; cross-over pipes located at 23 sites; a backup interconnection with Natural Gas Pipeline Co. of America in Randolf County, AR; six compressor engines and all structures at its Diaz compressor station in Jackson County, AR, and eight compressor engines and all structures at its Sherrill compressor station in Jefferson County, AR.
The pipe facilities are used to transport gas from production fields in the Perryville area in the south to markets in the St. Louis area, and from various receipt points along the pipeline system to storage fields in the Perryville area.
Mississippi River said its abandonment plans excluded an 18.3-mile segment of its system, extending north from its Glendale compressor station in Arkansas to Pine Bluff, AR. That pipe section, along with a relevant interconnect, would be sold to its affiliate, CenterPoint Energy Gas Transmission Co., it told FERC.
Rather than replace the facilities, CenterPoint Energy in a recent reverse open season turned back a sufficient amount of its reserve firm downstream capacity on Mississippi River’s system to ensure the continued reliability of Mississippi River’s firm southbound transportation services to inject gas into storage, according to the agency order [CP04-334].
Mississippi River also made arrangements with CenterPoint Energy for the reliability of firm northbound transportation to market areas. Namely, Mississippi River and CenterPoint Energy entered into an agreement under which CenterPoint Energy will receive a discounted transportation rate for its enter maximum daily quantity of 348,837 Dth/d in exchange for delivering up to 85,000 Dth/d to the Olyphant, AR, interconnection, as needed by Mississippi River to ensure the flow of sufficient volumes north to meet its firm service delivery obligations in market areas.
The Missouri Public Service Commission expressed concern with the arrangement between the two affiliate pipelines, saying that Mississippi River’s agreement with CenterPoint Energy does not guarantee that CenterPoint Energy will always be able to deliver sufficient volumes at the Olyphant interconnection to make up for capacity lost as the result of the abandonment. But FERC said it did not oppose capacity arrangement.
“Mississippi River has indicated that it will purchase any necessary volumes of gas that are needed to make up for shortfalls in any instance that CenterPoint fails to deliver sufficient volumes to Olyphant. Mississippi River has further stated that it will not seek to recover the costs associated with such gas purchases from its shippers. With this understanding, we have no objection to Mississippi River’s committing to purchase gas when needed to ensure that it will be able to meet its firm service obligations,” the FERC order said.
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