The latest operational flow order (OFO) by ANR Pipeline imposing a more restrictive hydrocarbon dew point standard on natural gas entering its system in the Gulf of Mexico region during February is at odds with a December FERC order that directed the pipeline to “cease and desist” from such practices, a coalition of producers told FERC Wednesday.
“ANR’s actions are troubling for several reasons. First, ANR’s unilateral shift to a more restrictive OFO when [the pipeline] was given additional time to iron out quality specification issues with its shippers is not warranted without a tariff filing or some form of clearance from the Commission,” the Producer Coalition said [RP04-65].
“The unilateral imposition of a more restrictive quality specification not only cuts against the thrust of the Commission’s Dec. 30 order, but also contravenes the measured response envisaged by the Commission’s OFO regulations.”
The December ruling ordered ANR to stop the practice of using critical notices or OFOs to enforce gas quality standards on a multi-year or long-term basis. However, ANR pointed out in its Jan. 21 OFO notice, “the order did not [mention] the use of OFOs to address gas quality issues on a short term basis,” such as for one month (February).
In the OFO, ANR notified shippers that effective Feb. 1 all gas received into the pipeline’s Southeast area would be required to either have a hydrocarbon dewpoint of no greater than 20 degrees Fahrenheit, or shippers of the gas would have to offer proof of an arrangement to have the gas processed downstream of its receipt point.
ANR limited the OFO to the Southeast area, where it receives most of its Gulf Coast gas supply. The more restrictive dewpoint level was needed to protect the operational integrity of ANR’s system, the pipeline said.
ANR said it was forced to impose the sterner gas quality standard when representatives of four gas processing facilities in the Southeast area told the pipeline that “due to prevailing economic conditions, absent the current OFO Btu restriction, or the imposition of a substitute gas quality restriction in place by Feb. 1, the plants will not operate for that month.”
But the Producer Coalition said it “emphatically [did] not agree with ANR’s blanket assertion that ‘a 20 degree hydrocarbon dewpoint level is appropriate and necessary to protect the operational integrity of ANR’s system and to enable ANR to continue to provide safe and reliable service.'” The producer group conceded that pipelines need to implement “reasonable measures” to avoid hydrocarbon liquids fallout on their systems, but it added that this was a “complex matter involving consideration of a number of different factors.”
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