FERC Wednesday gave Equitrans LP the green light to sell the bulk of its 87-mile Three Rivers Pipeline in western Pennsylvania to its distribution company affiliate, Equitable Gas Co., for an estimated $1.09 million.
The Pittsburgh-based energy company plans to retain a 15.5-mile section of the pipeline, which it said was a “vital interconnection” with National Fuel Gas Supply Corp. The sale would involve the easternmost portion of the pipeline, which comprises 58 miles. In addition, it plans to abandon in place 13.3 miles of the pipeline, also known as Line H-156, and abandon the Pennview and Sleepy Hollow compressor stations for potential redeployment in other areas of its system.
Equitrans acquired most of the pipeline from Three Rivers Pipeline Co., a subsidiary of Equitable Resources, in early 2000 for a net value of $4.2 million (see Daily GPI, April 13, 2000).
The Three Rivers Pipeline’s importance to Equitrans’ overall transmission system “has declined, and due to its age the pipeline will require significant expenditures and upgrades in the near future in order to maintain its compliance with…U.S. Department of Transportation regulations applicable to transmission facilities,” Equitrans told FERC in its June request for abandonment authority.
“Equitrans has undertaken a comprehensive review of the operations of its Line H-156 and has determined that the operational utility of the Three Rivers Pipeline to the Equitrans network is now confined to a limited segment of that pipe,” the National Fuel interconnection. The design capacity of the portion of the pipeline that it is seeking to abandon is 50,000 Mcf/d, but the actual throughput is only 35 Mcf/d, Equitrans said.
The abandonment will ultimately reduce Equitrans’ costs to its shippers, since it will allow the company to eliminate current operating and maintenance expenses of approximately $175,000 a year, and eliminate the potential need for estimated future capital expenditures of approximately $4.22 million for repair or replacement of these facilities, Equitrans said.
Equitable Gas said it plans to operate the acquired pipeline as part of its existing local distribution network. It would become part of the company’s Hinshaw pipeline, exempt from FERC jurisdiction.
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