FERC last week issued Northwest Pipeline a blanket certificate to install and operate three existing portable compressor units as needed to help offset the heavy demands that have been placed on certain shippers by the pipeline’s continual operational flow orders (OFOs).
The three units, which will add a combined 10,700 horsepower of compression to Northwest’s system at a cost of $3.5 million, are intended to help lessen the need for the incessant OFOs on the Kemmerer Corridor segment of the pipeline, which runs from Kemmerer, WY, to Pegram, ID. Northwest has had to invoke OFOs on a regular basis since mid-November to obtain enough displacement capacity to meet its firm contract obligations [CP01-62]. The pipeline said last week it expected to place the additional compression into service immediately.
Northwest depends heavily on displaced capacity because its contract demand (721 MDth/d) exceeds the amount of gas (474 MDth/d) that can physically flow through the Kemmerer Corridor. This has led to a major operational bottleneck in the movement of gas to Northwest’s primary market in the Pacific Northwest.
For the displaced capacity, Northwest counts on Pan-Alberta Gas (U.S.) Inc. to provide 144 MDth/d, while other pipeline customers (those flowing north to south) are left to make up the remaining shortfall of about 102 MDth/d. When there is inadequate north-to-south flow, the pipeline’s tariff permits it to issue must-flow OFOs so it can fulfill its contract obligations.
As a result of the constant OFOs, Northwest customers have been forced to buy more expensive Canadian gas supplies to comply with the orders, which in turn has led to plant closings and alternative fuel switching, the pipeline told FERC.
Northwest said the three compressor units approved by the Commission would have certain operational limitations. First, they will only be available when they aren’t needed for their primary function, which is to temporarily replace out-of-service compressor stations. Second, the units will only be operated when general OFOs are invoked or are imminent, the pipeline said.
Northwest told FERC it plans to replace this “interim solution” by no later than Oct. 1, 2003 with a permanent displacement-reduction project.
The Commission last month denied a complaint in which several northern Nevada industrial shippers sought exemption from Northwest’s continual must-flow OFOs, and to be reimbursed for the costs of complying with those OFOs. But FERC did hold out some hope for the shippers, saying it would consider proposals to provide future relief from the pipeline’s constant OFOs (See NGI, Jan. 29, 2001).
It ordered a review of the pipeline’s OFO tariff provisions as part of Northwest’s Order 637 compliance proceeding, along with a number of related issues — segmentation, imbalance provisions, scheduling and capacity release. It directed interested parties to file “limited additional comments” on the pipeline’s OFO tariff provisions, and said it would welcome proposals addressing alternatives to the constant use of OFOs [RP01-189].
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