FERC Wednesday approved the requests of three western natural gas pipelines for temporary waivers of capacity-release regulations, clearing the way for the permanent release of off-system capacity held on the Wyoming Interstate Co. (WIC) pipeline to certain shippers.
The Federal Energy Regulatory Commission (FERC) orders responded to requests of WIC, Questar Overthrust Pipeline and Rockies Express Pipeline (REX), all filed separately. The temporary waivers enables WIC (as well as Overthrust and REX) to do the capacity-release transaction on a one-time basis only, and WIC and the other pipes have 90 days to do so, said Joe Hollier, a spokesman for Kinder Morgan, parent of WIC.
WIC currently holds 200,000 Dth/d of off-system capacity on REX and has three transportation agreements for capacity on Questar Overthrust to provide shippers on its system seamless transportation service. A breakdown of the agreements held by WIC on Overthrust includes 365,000 Dth/d through 2017; 190,00 Dth/d from November 2018 to September 2020; and two contracts for 120,000 Dth/d and 40,000 Dth/d, both of which run through 2020, according to Overthrust. WIC is proposing to release permanently all or a portion of the reserved capacity that it holds on Overthrust.
With respect to the capacity on Overthrust, WIC told FERC it has encountered unexpected nominations and scheduling issues that have affected the quality and reliability of service received by WIC shippers.
After “actively collaborating” to resolve the issues, “WIC states both pipelines [it and Overthrust] have agreed that the ideal solution is to permanently release WIC’s Overthrust capacity to the respective shippers on whose behalf WIC acquired the off-system capacity.” Three shippers have expressed an interest in a permanent release of the Overthrust capacity: Occidental Energy Marketing Inc., Marathon Oil Co. and WPX Energy Inc, according to WIC [RP12-1018].
“Two of these shippers, Occidental and Marathon, also rely on REX off-system capacity, which WIC acquired on their behalf. WIC states that although it has not encountered nomination and scheduling difficulties on REX as it has on Overthrust, these shippers have expressed interest in also obtaining the REX capacity” that it holds. [RP13-134].
“WIC believes the permanent release of the REX capacity along with the Overthrust capacity to these two shippers will provide them even greater flexibility during the nominations and scheduling of their gas transportation transactions and [give them] complete control of that capacity.” REX told FERC it supports WIC permanently releasing the REX capacity that it holds on its system.
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