Missouri and Kansas regulators have agreed to settle two natural gas leak disputes with Southern Star Central Gas Pipeline Inc. for $9.6 million, regulators said Friday.

Southern Star owns and operates a 6,000-mile pipeline that transports gas from the Rocky Mountain and Midcontinent regions to metropolitan areas in Kansas and Missouri. Several of the company’s pipelines enter Missouri to serve the Kansas City metropolitan area, as well as St. Louis, St. Joseph, Springfield and Joplin, MO.

In a filing before the Federal Energy Regulatory Commission (FERC), Southern Star sought to recover costs from two gas leaks: at one of its main transmission pipelines near Hutchinson, KS, in January 2007; and from a ruptured pipeline at Southern Star’s McLouth Storage Field in August 2007.

According to the Missouri Public Service Commission (MPSC), losses of small amounts of natural gas in transmission systems are not unusual, and these costs are typically absorbed in the overall price for gas charged by local distribution companies. Pipeline companies annually file requests with FERC to pass on costs of lost gas to the company’s natural gas transportation customers, MPSC noted.

However, because the Southern Star losses involved “major” leaks and ruptures, the MPSC and the Kansas Corporation Commission intervened in the FERC case and won. According to the MPSC, the settlement will save Missouri consumers an estimated $4 million in future natural gas costs.

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