[Federal Register Volume 62, Number 57 (Tuesday, March 25, 1997)]
[Notices]
[Pages 14131-14132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7414]
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DEPARTMENT OF ENERGY
[Docket Nos. CP96-655-001, CP96-656-001, and CP96-657-001]
Destin Pipeline Company, L.L.C.; Notice of Amendment
March 19, 1997.
Take notice that on March 14, 1997, Destin Pipeline Company, L.L.C.
(Destin) successor in interest to Destin Pipeline Company Inc. (DPC),
P.O. Box 2563, Birmingham, Alabama 35202-2563, filed in Docket No.
CP96-655-001, et al., an amendment to the pending application for a
certificate of public convenience and necessity filed on July 24, 1996,
in Docket No. CP96-655-000, et al., pursuant to Section 7(c) of the
Natural Gas Act and Parts 284 and 157 of the Commission's Regulations,
to modify proposed facilities to include executed Precedent Agreements
providing market support for the Destin Pipeline, to revise Destin's
proposed FERC Gas Tariff and initial rates to provide a new flexible
firm transportation service to meet the needs of deepwater producers
and to renew requests for blanket certificates of construction and
transportation, all as more fully set forth in the amendment which is
on file with the Commission and open to public inspection.
Destin states that in its initial filing, as supplemented, DPC
requested authorization to construct, install and operate a new large
diameter interstate pipeline (Destin Pipeline) to transport gas from
the Gulf of Mexico to interconnections with five interstate pipelines
in the State of Mississippi, Destin states that due to favorable
reaction from the shipper community, on December 21, 1996, Amoco
Pipeline Company (Amoco Pipeline), Shell Gas Pipeline Company (Shell
Pipeline), Amoco Production Company (Amoco), Shell Deepwater
Development Inc. (SDDI) and shell Deepwater Production Inc. (SDPI)
agreed with DPC to have affiliates of Amoco Pipeline and Shell Pipeline
become equity owners in the Destin Pipeline project. Additionally,
Destin states that Amoco, SDDI and SDPI have executed Precedent
Agreements dated as of February 28, 1997, for the proposed flexible
firm transportation service on Destine Pipeline with average
Transportation Demand (TD) levels over the first five years at 562 MMcf
per day and peak TDs of 844 MMcf per day.
Destin states that its initial filing requested authorization to
construct, install, and operate one gathering platform in Main Pass
Block 260, Gulf of Mexico; one offshore junction platform in Viosca
Knoll Block 119, Gulf of Mexico; 76 miles of 36-inch offshore pipeline
facilities; 134 miles of 36-inch and 30-inch onshore pipeline
facilities; two miles of 16-inch pipeline facilities; one 14,100
horsepower compressor station in Jackson County, Mississippi; one
11,600 horsepower compressor station in Greene county, Mississippi; and
related pipeline interconnection, measurement and appurtenant
facilities to accommodate the transportation of 1 Bcf of gas per day
for delivery to downstream interconnections in southern and central
Mississippi. Destin states that the pipeline route was to extend in a
northerly direction from Main Pass Block 260, Gulf of Mexico, to an
onshore terminus at its interconnection with Southern Natural Gas
Company (Southern) near Enterprise, Mississippi. Destin further states
that the original filing contemplated interconnections with four other
pipelines, as well as Southern; Florida Gas Transmission Corporation,
Transcontinental Gas Pipe Line Corporation, Tennessee Gas Pipeline
Company and Texas Eastern Transmission Corporation.
Destin states that, specifically, the amended filing seeks the
following modifications to the original proposal: (a) Several
modifications to the jurisdictional facilities, (b) an interconnection
with an additional interstate pipeline, (c) the deletion of the
levelized rates for the FT-1 firm transportation service, (d) the
addition of a flexible firm transportation service similar to that
approved in Shell Gas Pipeline Company, 76 FERC para. 61,126 (1996),
(e) a decrease in the proposed initial rates, (f) inclusion of capacity
lease payments to Southern in Destin's proposed cost of service in
accordance to the pending joint application of Southern and Destin
filed on March 14, 1997, in Docket No. CP97-291-000, (g) revisions to
Destin's proposed FERC Gas Tariff, primarily attributable to the
addition of the flexible firm transportation service and the
incorporation of the Gas Industry Standards Board standards.
It is stated that the modifications to the facilities originally
proposed are as follows: (a) The deletion of the junction platform in
Viosca Knoll Block 119, Gulf of Mexico, (b) an interconnection with
Koch Gateway Pipeline Company in Jackson County, Mississippi, (c) the
deletion of the onshore receipt point, (d) increase compression
capabilities at the Pascagoula compression site from 14,100 horsepower
to 17,040 horsepower, (e) decrease compression at the Sand Hill
compression site from 11,600 horsepower to 9,400 horsepower, and (f) in
addition to the measurement facilities to connect to the inlet and
outlet of a non-jurisdictional processing plant to be operated by Amoco
in Pascagoula, Mississippi, Destin proposed to add as an auxiliary
facility a liquids slug catcher facility in Jackson County,
Mississippi, which will be located upstream of the site of the non-
jurisdictional processing plant. Destin estimates the revised cost of
the proposed facilities to be $308.1 million.
In regard to its transportation services, Destin states that it is
deleting the 10-year levelized firm transportation services and adding
a flexible firm transportation service. Interruptible transportation
service under Rate Schedule IT will be applicable to any shipper that
contracts for interruptible transportation on Destin Pipeline. In its
amended proposal, Destin proposes to offer two firm transportation
services: (1) A traditional firm transportation service (Rate Schedule
FT-1) and (2) a flexible firm transportation service (Rate Schedule FT-
2). Destin states that Rate Schedule FT-1 is a traditional firm
transportation service with a fixed TD and a reservation charge to be
billed regardless of throughput levels. The maximum initial monthly
reservation rate to be charged for service under Rate Schedule FT-1 is
$7.35 per Dth, a decrease of 58 cents per Dth per month from the
comparable rate proposed for the traditional firm rate schedule in the
initial filing. Destin states that Rate Schedule FT-2 is a flexible
firm transportation service which will provide for variable levels of
TD and volumetric rate treatment depending on throughput levels
relative to TD. Destin states that to be eligible for service under
Rate Schedule FT-2, a shipper must execute a Reserve Commitment
Agreement wherein the shipper identifies OCS lease(s) with estimated
proven recoverable reserves of 100 Bcf or more attributable to the
shipper's interests and its affiliates or aggregated with other
shipper(s) committed interest(s) in such leases (Committed Leases) and
make a life of reserves commitment of its share of production
therefrom. In addition, Destin states that each shipper will be
required to submit documentation and technical data to support its
reserve commitment when placing a request for transportation service
under Rate Schedule FT-2. It is
[[Page 14132]]
stated that shippers under Rate Schedule FT-2 may request separate
levels of TD (5,000 Mcf/d minimum) for specified delivery periods of
not less than three consecutive months to correspond with the
anticipated production profile of the Committed Leases. It is further
stated that the maximum monthly reservation rate for transportation
service under Rate Schedule FT-2 is $7.35 per Dth and the maximum daily
reservation rate for such service is 24.5 cents per Dth, inclusive of
the transportation charge. To receive volumetric rate treatment, the
shipper's throughput quantities (based on a rolling three-month average
calculated with a one-month lag) must equal or exceed 70 percent of the
shipper's average TD for the same three-month period. If a shipper's
throughput does not reach the 70 percent threshold, the shipper is
charged a reservation charge based on a total TD.
Destin states that it is encouraging maximum utilization of
capacity by establishing discounted Rate Schedule FT-2 rates for a
period through December 31, 2019, for FT-2 shippers with firm
transportation service pursuant to Precedent Agreements executed in
February 1997 or pursuant to commitments in Destin's Open Season to be
held from March 17, 1997 to April 30, 1997. Destin states that at this
juncture, Destin is not requesting authority herein to negotiate terms
and conditions. Service terms and conditions under Rate Schedule FT-2
will be available to all shippers on the same generally applicable
terms and conditions.
Destin states that for all rate schedules, Destin has eliminated
the offshore/onshore rate design and provided for a single rate
independent of receipt point or delivery point location. Destin states
that it believes that a postage stamp rate is appropriate for this
project because most of the gas supply is expected to be received at
Main Pass Block 260 and all of the delivery points are located within a
115-mile segment. In addition, Destin states that it has eliminated the
Negotiated Rate Provision in Section 25 of the proposed tariff. Destin
further states that the addition of a flexible firm rate schedule has
eliminated the need for the Banking Provision in Section 26 of the
proposed tariff. Destin states that the Banking Provision was designed
to provide scheduling flexibility to meet the needs of shippers
coordinating development and production of deepwater prospects. Destin
believes that the proposed flexible firm Rate Schedule FT-2 provides
even greater flexibility and eliminates any need for a banking
mechanism.
Destin requests a Preliminary Determination on non-environmental
issues by June 1, 1997, with a final approval on all issues by the end
of November 1997, so that the proposed facilities can be placed in
service by July 1, 1998.
Any person desiring to be heard or to make any protest with
reference to said amendment should on or before April 9, 1997, file
with the Federal Energy Regulatory Commission, Washington, DC 20426, a
motion to intervene or a protest in accordance with the requirements of
the Commission's Rules of Practice and Procedure (18 CFR 385.214 or
385.211) and the Regulations under the Natural Gas Act (18 CFR 157.10).
All protests filed with the Commission will be considered by it in
determining the appropriate action to be taken but will not serve to
make the protestants parties to the proceeding. Any person wishing to
become a party to a proceeding or to participate as a party in any
hearing therein must file a motion to intervene in accordance with the
Commission's Rules. All persons who have heretofore filed need not file
again.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 97-7414 Filed 3-24-97; 8:45 am]
BILLING CODE 6717-01-M
