[Federal Register Volume 60, Number 72 (Friday, April 14, 1995)]
[Notices]
[Pages 19035-19036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9199]
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DEPARTMENT OF ENERGY
[Docket No. CP95-304-000]
Shell Western E&P Inc.; Notice of Petition for Declaratory Order
April 10, 1995.
Take notice that on April 6, 1995, Shell Western E&P Inc. (SWEPI),
200 North Dairy, Houston, Texas 77001, filed a petition in Docket No.
CP95-304-000, requesting that the Commission declare that a 33-mile, 6-
inch pipeline extending from the outlet of a carbon dioxide (CO2)
recovery plant north of Denver City, Texas to an interconnection with a
Hinshaw pipeline in Lea County, New Mexico, is a gathering facility
exempt from Commission jurisdiction pursuant to Section 1(b) of the
Natural Gas Act, all as more fully set forth in the petition which is
on file with the Commission and open to public inspection.
SWEPI states that it is the operator of the Denver Unit, an
established oil and gas producing unit with approximately 1200 wells
and an extensive network of gathering and re-injection lines connecting
the wells within the unit to the Denver Unit CO2 Recovery Plant
(DUCRP), all located in Gaines and Yoakum Counties, Texas. It is
indicated that since 1983, the Denver Unit has been under carbon
dioxide (CO2) flood, an enhanced oil recovery process where
CO2 is injected into a subterranean reservoir to recover
additional oil. It is also indicated that the plant was built in 1984
to remove water, hydrocarbons and hydrogen sulfide from the produced
CO2 stream at the Denver Unit so that the CO2 is pure enough
to re-inject. SWEPI states that one of the by-products of the CO2
separation process is low Btu, off-spec gas having a Btu content of 700
Btu, a CO2 content of 12 percent by volume, and a nitrogen content
of up to 25 percent by volume. It is stated that small quantities of
the off-spec gas are sold to other plants in the area for fuel, but the
majority of the off-spec gas is circulated and re-injected along with
the CO2 because previously there was no existing market for that
product.
SWEPI states that the pipeline is an existing liquids line that
would be converted to gas service and used to move the off-spec gas
from the plant to a point where it can be transported to the only
feasible market for the product, an electric generating plant operated
by [[Page 19036]] Southwestern Public Service Company in Lea County,
New Mexico located approximately 35 miles from the plant. SWEPI states
that the gas to be delivered into the pipeline is not pipeline quality,
and cannot be commingled or transported with any other natural gas.
In support of its claim that the primary function of the pipeline
is gathering, SWEPI indicates that the facility meets the gathering
criteria set forth in Farmland Industries, Inc., 23 FERC 61.063
(1983), as modified by later Commission orders, indicating the
following:
Length and Diameter of the Line
SWEPI states that onshore lines of comparable and greater length
and diameter, including a 60-mile, 10-inch pipeline downstream of a
processing plant (see 67 FERC 61,254 (1994), have been characterized
as gathering. Also, the length of the pipeline is dictated by the
length of the existing liquids line which would be converted to natural
gas service.
Beyond the Plant
SWEPI also states that the plant is a separation facility that
removes water, hydrocarbons and hydrogen sulfide from the CO2
produced from the unit and is not a gas plant in the traditional sense
that it processes or treats natural gas. However, it is indicated that
the pipeline would be an incidental extension of the existing
integrated production, gathering, and CO2 separation and re-
injection functions at the Denver plant. SWEPI states that gas would be
produced from the various wells located in the Denver Unit, gathered to
DUCRP for carbon dioxide separation, and then either routed through a
return pipeline for re-injected in the field or routed through the
pipeline to a point where it can be transported to the end user. It is
indicated that the gas would not be pipeline quality when delivered
into the pipeline and would require a segregated line dedicated to off-
spec usage. SWEPI states that the traditional behind-the-plant test
recognized that the line of demarcation between the production and
gathering function and transmission function is the point where the gas
is processed to make the gas of salable quality. SWEPI concludes that
the pipeline does not provide that line of demarcation because the gas
is never of pipeline quality.
Operating Pressure of the Line
SWEPI states that it would operate the pipeline at 600 psi, based
on the pressure at the outlet of the plant.
Ownership and Use of the Line
Concerning the general activity of the owners of the facility,
SWEPI states that the proposed pipeline would be utilized by the
participating working interest owners to gather their off-spec gas to a
point where it can be received for transportation to the only available
market. SWEPI states that the fact that the lessees of the line are the
producers of the off-spec gas to be handled by the pipeline is an
additional factor weighing in favor of a non-jurisdictional
determination.
Gathering Across State Lines
SWEPI states that the Commission has recognized in Superior Oil
Co., 13 FERC 61,218 (1980) that gathering may cross state lines and
should not affect the jurisdictional status of the line.
Access to Line
SWEPI states that the pipeline would serve the unique and discrete
function of gathering off-spec produced by the Denver Unit working
interest owners to a point where it can be transported to the only
available market. It is indicated that, because all of the working
owners would have the opportunity to use the pipeline, there will be no
access issues.
Any person desiring to be heard or to make any protest with
reference to said petition should on or before May 1, 1995, file with
the Federal Energy Regulatory Commission, 825 North Capitol Street,
N.E., Washington, D.C. 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). 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.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 95-9199 Filed 4-13-95; 8:45 am]
BILLING CODE 6717-01-M