02-32015. Proteus Oil Pipeline Company, LLC; Notice of Petition for Declaratory Order

December 13, 2002.

Take notice that on December 6, 2002, Proteus Oil Pipeline Company, LLC (Proteus Company) filed in Docket No. OR03-3-000 a petition for declaratory order, pursuant to Rule 207(a)(2) of the Commission's Rules of Practice and Procedure, 18 CFR 385.207(a)(2).

Proteus Company requests that the Commission issue an expedited decision on this Petition no later than the end of March 2003. Proteus Company states that it is planning to construct the Proteus oil pipeline system (Proteus System), a major crude oil pipeline designed to transport the maximum volume of oil that is technologically feasible with existing equipment, which will provide transportation for the Mississippi Canyon and Atwater Valley areas of the deepwater Gulf of Mexico to a receiving facility at South Pass Block 89 in the Outer Continental Shelf. The Proteus System is anticipated to commence service in 2005, and will serve areas of the deepwater Gulf of Mexico that at this time have little or no available transportation capacity on existing oil pipelines.

Proteus Company states that the Proteus System will be subject to the nondiscrimination provisions of the Outer Continental Shelf Lands Act (“the OCSLA), and Proteus Company seeks the requested declaratory order to ensure that the Proteus System will not be subject to common-carrier type pro rata allocation, but will rather be authorized to function as a contract carrier, hold an open season, enter into long-term transportation contracts reflecting contract carriage principles, give those contracts precedence in allocating capacity, and contract for capacity that remains available after the open season closes on a first-come, first-served basis. Proteus Company maintains that the potential of pro rata allocation will likely discourage production development in the Mississippi Canyon and Atwater Valley areas, and commitment on the Proteus System by prospective subscribers to capacity, thereby increasing the risk of both the Proteus System and shippers using it.

Accordingly, Proteus Company seeks the following by the end of February 2003:

A Commission declaration that that the Proteus System will be authorized to function as a contract carrier, hold an open season, enter into long-term transportation contracts reflecting contract carriage principles, give those contracts precedence in allocating capacity, and contract for capacity that remains available after the open season closes on a first-come, first-served basis.

Proteus Company requests that the Commission issue the requested declaratory order by the end of March 2003, because (1) as part of their planning for initial production when the Proteus System goes online in 2005 (as currently scheduled), Proteus Company and the shippers to be served by the Proteus System at start-up would like to execute transportation agreements incorporating contract carriage principles and be confident that those agreements are mutually binding and enforceable—lack of resolution that the Proteus System can operate on a contract carriage basis makes this impossible; and (2) in order for the Proteus System to be fully utilized, Proteus Company must obtain future transportation commitments from current and prospective producers that are currently assessing whether they should pursue development of oil field production opportunities in the Mississippi Canyon and Atwater Valley areas, whether the Proteus System will be able to meet their requirements for transportation of production, and whether they must construct their own isolated pipelines to service their production fields.

Any person desiring to be heard or to protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with sections 385.214 or 385.211 of the Commission's Rules and Regulations. All such motions or protests must be filed on or before January 10, 2003. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. This filing is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at http://www.ferc.gov using the “FERRIS” link. Enter the docket number excluding the last three digits in the docket number field to access the document. For Assistance, please contact FERC Online Support at [e-mail] or toll-free at [phone], or TTY, contact [phone]. Comments, protests and interventions may be filed electronically via the Internet in lieu of paper. The Commission strongly encourages electronic filings. See 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site under the “e-Filing” link.

Linwood A. Watson, Jr.,

Deputy Secretary.