02-9282. Transcontinental Gas Pipe Line Corporation; Notice of Application

April 11, 2002.

Take notice that on April 4, 2002, Transcontinental Gas Pipe Line Corporation (Transco), P. O. Box 1396, Houston, Texas 77251-1096, filed in Docket No. CP02-141-000 an application pursuant to Section 7(b) of the Natural Gas Act (NGA) and the rules and regulations of the Federal Energy Regulatory Commission (Commission), for an order permitting and approving the abandonment by sale of certain pipeline facilities known as the South Texas Pipeline Facilities located in onshore Texas in Bee, Brooks, DeWitt, Duval, Goliad, Hidalgo, Jackson, Jim Hogg, Jim Wells, Kleberg, LaSalle, Live Oak, McMullen, Nueces, Refugio, San Patricio, Starr, Victoria, Wharton, Willacy, and Zapata Counties, all as more fully set forth in the application which is on file with the Commission and open to public inspection. The filing may be viewed on the web at http://www.rimsweb1.ferc.fed.us/​rims.q?​rp2~intro (call 202-208-2222 for assistance).

Transco states that it proposes to abandon by sale to Enbridge Pipelines (Texas Intrastate) Inc. (Enbridge), an intrastate pipeline entity not affiliated with Transco, a 100 percent interest in the South Texas Pipeline Facilities. Transco requests that the Commission determine that, upon sale of the South Texas Pipeline Facilities to Enbridge, neither the facilities nor the services provided by Enbridge utilizing the facilities will be subject to the Commission's Natural Gas Act jurisdiction.

Transco states that since its principal role is that of a transporter, it no longer requires its extensive gathering facilities to provide gas sales. Moreover, it states that most of its customers purchase gas at Transco's pooling points, not at the wellhead. As a result, Transco states that it has reevaluated its facilities and services in order to position itself to compete effectively as a transporter in this changed environment. Transco's states that it has determined to sell or spindown those facilities historically relied on primarily to perform a gas supply gathering function.

Transco states that it thus offered for sale all of its onshore transmission and gathering facilities upstream of its station 30 compressor station. According to Transco, while various parties submitted bids for portions of the assets being offered for sale, it determined that Enbridge's bid was the most attractive overall package. Transco notes that, in addition to its jurisdictional facilities, certain non-jurisdictional gathering laterals contiguous to the McMullen lateral portion of the South Texas Pipeline Facilities will be simultaneously transferred to Enbridge by WFS Gathering Company (WFS Gathering) and Goebel Gathering Company (Goebel), which are gathering affiliates of Transco. Additional, Transco states that WFS Gathering has already sold and transferred to Enbridge the non-jurisdictional facilities upstream of the Tilden Plant. Transco states that all of these non-jurisdictional facilities were spundown to WFS Gathering and Goebel by Transco pursuant to the Commission order authorizing the transfer in Docket No. CP98-236-000. It states that Enbridge is purchasing these gathering laterals according to separate Purchase and Sale Agreements with WFS Gathering and Goebel.

Specifically, Transco states that it proposes to abandon by sale to Enbridge the following South Texas Pipeline Facilities:

1. Mainline A from Mile Post 0.00 to Mile Post 258.40, which consists of 37.63 miles of 10-inch pipeline, 41.26 miles of 14-inch pipeline, 99.99 miles of 24-inch pipeline, and 79.49 miles of 26-inch pipeline;

2. Station 20, located at Mile Post 170.25 on Mainline A near Refugio, Texas, which is a 8800 horsepower compressor station;

3. Starr lateral and loop, which consists of 23.17 miles of 10-inch pipeline and 10.10 miles of 20-inch pipeline;

4. North Rucias lateral, which consists of 6.5 miles of 8-inch pipeline;

5. Driscoll lateral, which consists of 10.86 miles of 6-inch pipeline and 22.35 miles of 8-inch pipeline;

6. LaGloria lateral and loop, which consists of 4.53 miles of 10-inch pipeline and 3.47 miles of 12-inch pipeline, respectively;

7. McMullen lateral, which consists of 139.05 miles of 24-inch pipeline from Tilden Junction in McMullen County, Texas, to Station 30 in Wharton County, Texas; and

8. Several meter stations, valves, miscellaneous tie-in piping, and other related appurtenances along the above pipeline segments.

Transco states that the South Texas Pipeline Facilities also include any other equipment, tangible personal property and related meter station facilities (but excluding all Excluded Property, as defined in the Purchase and Sale Agreement, attached as Exhibit U to the application), which is used by Transco in connection with the operation of the South Texas Pipeline Facilities.

Transco states that it has agreed to sell its 100 percent interest in the South Texas Pipeline Facilities to Enbridge for $32.8 million. It states that the cost to Enbridge will compensate Transco for the total estimated net book value of the assets at the time of closing, including the unamortized balance of the purchase price that was assigned to these assets when Williams purchased Transco in 1995. Transco further states that closing of the sale of the facilities is contingent upon receipt of the a determination from the Commission that upon their sale to Enbridge, neither the facilities nor the services provided by Enbridge through the facilities will be subject to the Commission's Natural Gas Act jurisdiction.

According to Transco, abandonment of the facilities will not require physical removal of any facilities. However, Transco states that it will make all necessary piping modifications and Enbridge will install the necessary metering equipment at Station 30 required to separate Enbridge's facilities from Transco's pipeline system. Transco further states that the abandonment will have no impact on the daily design capacity of, or operating conditions on, Transco's system.

Transco contends that approval of the abandonment will enable Enbridge to further develop and grow its intrastate pipeline system in Texas to provide competitive gathering, transportation, and gas processing services, as well as greatly expand market access to the producers currently connected to both the South Texas Pipeline Facilities and the North Padre Island Lateral. It states that at the same time, approval will allow Williams to shed facilities which are no longer associated with its primary service functions, and will ultimately result in reduced costs for its customers by the removal of these facilities from the cost of service rate base.

Transco states that Enbridge has represented that, after acquisition, it will use the South Texas Pipeline Facilities only for intrastate transportation or transportation pursuant to Section 311(a)(1) of the Natural Gas Policy Action of 1978.

Transco states that two of its customers (Sun Company, Inc. And Coastal Eagle Point Oil Company) are currently entitled to Part 284 firm transportation service from certain receipt points that are proposed to be abandoned. In an effort to effectuate the transfer of facilities so that neither customer is adversely affected, Transco states that it and Enbridge and willing to offer alternative arrangements to the shippers to provide continued service. In that regard, Transco states that Enbridge is willing to offer continued service form these receipt points to Transco's Station 30 delivery point, pursuant to the terms and conditions of its Statement of General Terms and Conditions, which will be filed with the Texas Railroad Commission in the near future. Transco, therefore, seeks authorization to partially abandon service to Sun and Coastal under their existing FT service agreements by removing the affected receipt points that will no longer be available from Transco. It states that all other provisions of the FT service agreements would remain unaffected. Upon Commission authorization of its abandonment application, Transco states that it will amend the two firm service agreements to delete the affected receipt points.

In addition to the two shippers noted above, Transco states that IT shippers on the North Padre Island Lateral will be required to make arrangements with Enbridge should they desire to sell their gas into the Transco markets at Station 30 or other points downstream.^[1] Transco contends that Enbridge has represented that continuing transportation service for these shippers will be available under the terms and conditions of its Statement of General Terms and Conditions, which will be filed with the Texas Railroad Commission in the near future. Transco states that Enbridge also anticipates that the additional markets it intends to attach to these assets through new construction and connection with its existing assets will offer new marketing opportunities for the North Padre Island shippers.

Transco further states that receipt and delivery points on nine certificate transportation X-rate schedule service agreements, which are no subject to pre-granted abandonment authorization, are also affected. According to Transco, there has been no gas flow recorded under any of these agreements since 1992. It states that upon abandonment and transfer of the facilities to Enbridge, the referenced receipt and delivery points will no longer be available to be used under the affected certificated agreements. Transco states that it has notified the affected parties in writing of its intent to terminate and abandon the certificated service. Transco requests abandonment authorization to the extent necessary to terminate services under the affected rate schedules and contracts.

Any questions regarding this application should be directed to Gisela B. Cherches, Transcontinental Gas Pipe Line Corporation, P. O. Box 1396, Houston, Texas 77251-1396 or call [phone]. In addition, Transco states that it will establish a toll-free telephone number so that interested parties can call with questions about the Momentum project.

There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before May 2, 2002, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene 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 NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.

However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.

Comments, protests and interventions may be filed electronically via the Internet in lieu of paper. See, 18 CFR385.2001(a)(1)(iii) and the instructions on the Commission's web site under the “e-filing” link.

If the Commission decides to set the application for a formal hearing before an Administrative Law Judge, the Commission will issue another notice describing that process. At the end of the Commission's review process, a final Commission order approving or denying the abandonment will be issued.

Linwood A. Watson, Jr.,

Deputy Secretary.

Footnotes

1.  Transco states that there are currently six shippers on the North Padre Island Lateral: Cinergy Marketing and Trading, LLC, Coral Energy Resources, L.P., Dynegy Gas Transportation, Inc., Superior Natural Gas Corporation, Upstream Energy Services Company, and Transco Energy Marketing Company.