Natural Gas Pipeline Company of America (NGPL) has petitioned FERC to grant a partial waiver of the secondary point rights in its tariff to help offset the impact on pipeline shippers of planned capacity reductions that will occur on a segment of its Gulf Coast Line due to maintenance, testing and other activities during the first half of 2006.

“The waiver would allow Natural to post certain secondary point rights not ordinarily available, limited in time and volume, so that its firm shippers would have added flexibility in responding to a series of capacity reductions affecting Segment 26 [in North Central Louisiana] on Natural’s Gulf Coast Line early in 2006,” NGPL told the Federal Energy Regulatory Commission [RP06-152].

The Kinder Morgan pipeline noted that the capacity reductions are expected during scheduled projects, including hydrostatic testing, spike pressurization, limited pipe replacement, related tie-in of facilities, piping changes and integrity work. It reported capacity on the Gulf Coast Line will be down during two days in January, approximately 45 days in February and March to conduct pipeline integrity testing, another four days in March related to a tie-in of manifold-area piping, and about two days in April or May. The capacity reductions during that period are expected to be in the range of about 60,000 Dth/d to 150,000 Dth/d, according to NGPL.

This will create constrained capacity on Segment 26 of the Gulf Coast Line between the interconnection with NGPL’s Louisiana Line on the south and the interconnection with the A/G Line on the north, said NGPL. This “[will] reduce, from time to time, the capacity available to move gas South from the interconnection between Natural’s A/G Line and its Gulf Coast Line and from supply sources along Segment 26, for delivery to Natural’s Louisiana Line,” which moves natural gas to Northeast and Southeast markets.

The Gulf Coast Line is one of two north-south lines — the other one is the Amarillo Line — that make up the NGPL system. The northern end of both lines is in the Chicago, IL, area and the southern ends are in different parts of Texas, with the Amarillo Line starting in the Texas Panhandle and western part of the state, while the Gulf Coast Line starts from deep in South Texas. The A/G Line provides a crossover between the Amarillo and Gulf Coast lines. The A/G crossover line intersects with the Gulf Coast Line at the borders of Texas, Arkansas and Louisiana. Segment 26 interconnects with the Gulf Coast Line at the same point and extends into North Central Louisiana, providing gas suppliers there access to NGPL’s Louisiana Line and markets in the Southeast and Northeast.

NGPL asked FERC to approve its request by Jan. 20 because of the “magnitude of pipeline projects which need to be done on Natural in 2006.”

Specifically, “Natural is requesting authority to post the availability of secondary point rights in its South Texas receipt zone for any shipper with firm capacity rights in Segment 26 adversely affected by these capacity reductions. While these secondary points would be out-of-path, the availability of such rights would still give firm shippers additional opportunities to obtain gas from South Texas sources for delivery into Natural’s Louisiana Line” and ultimate shipment to Northeast and Southeast markets. “The demand for gas deliveries off of the Louisiana Line has been high in part because such gas replaces supplies that are still shut in as a result of the hurricanes this summer,” NGPL noted.

The availability of the special secondary point rights in South Texas would be limited to periods of actual reductions affecting Segment 26, and also would be limited by volume, on a shipper-specific basis, to the firm rights affected by the capacity reduction, the pipeline said. “For example, if firm capacity through Segment 26 is reduced to 80% of firm contract rights, the shippers with firm rights from north to south through Segment 26 would be granted special secondary rights in the South Texas receipt zone equal to 20% of their [maximum daily quantities] pathed south through Segment 26.”

The special rights would be offered at no additional cost to the shippers “beyond that occasioned by any use of secondary point rights,” such as applicable commodity charges and fuel, and no overrun charges would be assessed for the exercise of these secondary point rights, according to the Kinder Morgan pipeline. NGPL said it will notify affected shippers at least 48 hours prior to any reduction in firm capacity on Segment 26.

It further noted that granting special second point rights to affected shippers “will not diminish the firm rights of any shipper out of South Texas.”

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