[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