FERC yesterday issued Northwest Pipeline a blanket certificateto install and operate three existing portable compressor units asneeded to help offset the heavy demands that have been placed oncertain shippers by the pipeline’s continual operational floworders (OFOs).

The three units, which will add a combined 10,700 horsepower toNorthwest’s system at a cost of $3.5 million, are intended to helplessen the need for OFOs on the Kemmerer Corridor segment of thepipeline, which runs from Kemmerer, WY, to Pegram, ID. Northwesthas had to invoke OFOs on a regular basis since mid-November toobtain enough displacement capacity to meet its firm contractobligations [CP01-62]. The pipeline expects to have the addedcompression operating today.

Northwest depends heavily on displaced capacity because itscontract demand (721 MDth/d) exceeds the amount of gas (474 MDth/d)that can physically flow northward through the Kemmerer Corridor.This has led to a major operational bottleneck in the movement ofgas 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 remaining102 MDth/d shortfall. When there is inadequate north-to-south flow,the pipeline’s tariff permits it to issue must-flow OFOs so it canfulfill its contract obligations.

The result of the continual use of OFOs has forced Northwest’scustomers to buy more expensive Canadian gas supplies to complywith the orders, which in turn has led to plant closings andalternative fuel switching, the pipeline told FERC.

Northwest said the three compressor units approved by theCommission will have certain limitations. First, they will only beavailable when they aren’t needed for their primary function, whichis to temporarily replace out-of-service compressor stations.Second, the units will only be operated when general OFOs areinvoked 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 permanentdisplacement-reduction project.

The Commission last month denied a complaint in which severalnorthern Nevada industrial shippers sought exemption from Northwest’sconstant must-flow OFOs, and to be reimbursed for the costs ofcomplying with those OFOs. But FERC did hold out some hope for theshippers, saying it would consider proposals to provide future relieffrom the pipeline’s OFOs (see Daily GPI, Jan. 25).

It ordered a review of the pipeline’s OFO tariff provisions aspart of Northwest’s Order 637 compliance proceeding, along with anumber of related issues — segmentation, imbalance provisions,scheduling and capacity release. It directed interested parties tofile “limited additional comments” on the pipeline’s OFO tariffprovisions, and said it would welcome proposals addressingalternatives to the constant use of OFOs [RP01-189].

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