Portland Natural Gas Transmission System (PNGTS) and Maritimes& Northeast Pipeline, L.L.C. (Maritimes) successfully crossedthe first major engineering hurdle in constructing their jointpipeline facilities, which represent the southernmost portion ofeach company’s pipeline system. The joint facilities eventuallywill bring more than 600 MMcf/d of Canadian gas to New Englandmarkets.

Brownsville, WS-based Michels Pipeline completed a difficult2,868-foot directional drilling beneath the Piscataqua Riverbetween Newington, NH, and Eliot, ME, followed by installation of30-inch diameter, high-capacity pipeline as much as 75-feet belowthe riverbed.

It is the first section of the PNGTS/Maritimes Joint FacilitiesProject, which will involve construction of 100 miles of 30-inchdiameter pipeline between interconnections with Tennessee GasPipeline in Haverhill and Dracut, MA, and an interconnection withthe upstream portions of the Maritimes and PNGTS facilities inWestbrook, ME. PNGTS is scheduled to transport gas from aninterconnection with TransCanada PipeLines by this November.Maritimes is scheduled to begin service by November 1999. Bothprojects remain on schedule.

Standards of Conduct Ruling Upheld

Although it offered a little leeway with respect to access toinformation of shared employees, FERC last week generally upheldits standards of conduct pertaining to the relationship betweenpipelines and their marketing affiliates.

On rehearing and clarification of an order involving Natural GasPipeline Co. of America (NGPL) and Amoco Production, the Commissionissued its latest ruling on Standards E and F, which prohibitspipelines from relaying information to their marketing affiliatesto give them a competitive advantage over non-affiliates. StandardE bars a pipeline from disclosing to its affiliate any informationthat it receives from a non-affiliated shipper, while Standard Frequires pipelines to provide information contemporaneously to allshippers on its system – whether affiliates or not.

A key issue in the case was whether Standards E and F applied tonon-operating employees, such as officers and members of boards ofdirectors, as well as to operating employees, which are involved inthe day-to-day operation of the pipeline. Natural and theInterstate Natural Gas Association of America (INGAA) argued thatnon-operating employees were exempted from the two standards, butFERC saw it differently.

“…Standards E and F are not limited in their scope tooperating employees,” the order said [RP97-232]. The Commissiondisagreed with Natural and INGAA that this was a new policy. It”has consistently applied Standards E and F to all employees,operating and non-operating, in reviewing pipelines’ standards ofconduct.”

The Commission, however, conceded that access to information byshared employees is not by itself tantamount to disclosure, as itearlier had ruled. “…[W]e will grant the petitioners request forclarification that access to such information does not constitutedisclosure,” it said, adding that a violation would occur only ifan employee actually “receives” the information.

“For example, if a non-operating senior executive officer has’access’ to non-affiliated shipper information in a pipeline’s filerooms, a Standard E violation is not triggered unless he or sheactually ‘receives’ [the] non-affiliated shipper’s information.”

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