Natural Gas Pipeline Company of America (NGPL) is seeking agreen light to sell off 110 miles of offshore supply laterals andcertain abandoned, retired facilities in the Gulf of Mexico toGreen Canyon Pipe Line Co. LLC for an estimated $1.3 million.

The transaction, if approved by FERC, would reduce Natural’sremaining offshore lateral holdings by one third. This would be inaddition to the one third that it sold previously, according to theKinder Morgan pipeline.

Since Order 636, “Natural has been in the process of sheddingmany of its [offshore] gas supply facilities…..Because of thelarge number of gas supply facilities which Natural owns, this hasbeen a lengthy and on-going process,” it told the Commission.

With the sale, Green Canyon — which is owned by El Paso EnergyPartners L.P. (EEP) — will be able to significantly expand itsgathering system in the Gulf. Its existing system is comprised of66 miles of 10- to 20-inch diameter pipe. Not only will GreenCanyon acquire 110 miles of lateral pipeline from Natural, but italso will pick up about 71 miles of “previously abandoned,retired-in-place pipe,” which Natural said would help both EEP andGreen Canyon “advance their goals.” Upon the sale and transfer ofthe facilities to Green Canyon, Natural has requested that they beconsidered non-jurisdictional gathering.

While the facilities are important to Green Canyon, they are “nolonger of strategic benefit” to Natural, according to the pipeline.”Production from the wells interconnecting these facilities hasdeclined over the years along with related transportationrevenues…..Only seven of the twenty-six laterals to be abandonedherein have flowed gas within the last year.”

The lateral facilities are located in East Cameron, WestCameron, Eugene Island, South Marsh Island, the Vermilion areasoffshore Louisiana and the High Island area offshore Texas. Most ofthe laterals are interconnected with the High Island OffshoreSystem, U-T Offshore System and Pelican Interstate Gas System.Natural said its expects to file another application to abandon itslateral facilities that are connected to Stingray Pipeline.

Natural said no firm transportation contracts would be affectedby the sale of the laterals. All customers served by the facilitiesreceive interruptible service. Green Canyon has vowed to continueserving the current IT customers of Natural at “mutually acceptablerates, terms and conditions of service,” according to the pipeline.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.