[Federal Register Volume 61, Number 234 (Wednesday, December 4, 1996)]
[Notices]
[Pages 64345-64346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30830]


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DEPARTMENT OF ENERGY
[Docket No. CP97-119-000]


Dauphin Island Gathering System; Notice of Petition for 
Declaratory Order

November 27, 1996.
    Take notice that on November 22, 1996, Dauphin Island Gathering 
System (DIGS), 1400 Woodloch Forest Drive, Suite 200, The Woodlands, 
Texas 77380, filed a petition for declaratory order in Docket No. CP97-
119-000, requesting that the Commission declare that certain existing 
and proposed facilities located in state and federal waters in the Gulf 
of Mexico would have the primary function of gathering natural gas and 
would thereby be exempt from the Commission's 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.
    DIGS states that its system is located in offshore Alabama and 
serves to gather natural gas in federal waters from the Mobile and 
Viosca Knoll areas and in Alabama waters. It is indicated that its 
facilities include no compression and consists of approximately 90 
miles of pipe ranging in diameter from 8 to 20 inches in diameter and 
configured in an inverted Y. The facilities consist of 36.3 miles of 
20-inch pipe; 42.7 miles of 12-inch pipe; and 6.8 miles of 8-inch pipe. 
DIGS indicates that gas gathered into DIGS can enter the interstate 
transportation grid into the facilities of Transcontinental Gas Pipe 
Line Corporation (Transco), Florida Gas Transmission Company (FGT) and 
Koch Gateway Pipeline Company. DIGS states that the capacity of its 
system is 355 MMcf per day and that its maximum allowable operating 
pressure is 1440 psig and its maximum contract pressure is 1250 psig. 
It is indicated that DIGS has operated as a gathering facility since 
its inception.
    DIGS indicates that it is now proposing to expand its system to 
connect with the new production facilities at Main Pass (MP) Block 261 
and with the facilities of Main Pass Gathering System (MPS) at MP225 to 
compete for the new production in the Mobile, Viosca Knoll and Main 
Pass Areas, Offshore Louisiana and Alabama. DIGS states that it will 
expand its system in two phases. It is stated that Phase I will include 
approximately 65 miles of 24-inch pipeline with a capacity of 150 to 
200 MMcf per day, and will extend from the existing facilities in 
Alabama State Block 73 to the new production facilities of DelMar at MP 
261 and with the facilities of MPS in Main Pass Block 225. DIGS also 
proposes to install several side valves to provide for the construction 
of a spine to production currently committed in various blocks. It is 
stated that Phase I will parallel the western leg of the existing 
facilities for about 30 miles, and include several short stub lines 
connecting it to the existing lines to manage system pressures and 
attach production along its entire length.
    DIGS states that Phase II of the proposed facilities consist of 13 
miles of 24-inch pipe and will extend from the northern terminus of 
Phase I onto shore, looping DIGS's existing 20-inch line.
    DIGS indicates that no gas processing will occur on the system, and 
there are no interstate pipelines in the immediate vicinity of Phases I 
and II or the existing facilities. It is also stated that the proposed 
facilities are located in waters shallower than 200 meters but that the 
integrated system is designed to receive gas produced in both shallow 
waters and in waters deeper than 200 meters.
    DIGS states that the existing facilities are currently owned by 
DIGS. It is indicated that DIGS is comprised of Dauphin Island 
Gathering Company, L.P. (DIPC), (one percent), a non-jurisdictional 
limited partnership, the general partner of which is OEDC; MCNIC Mobile 
Bay Gathering Company (MCNIC), (59 percent), a non-jurisdictional 
subsidiary of MCN Corporation, and PanEnergy Dauphin Island Company 
(PDI), (40 percent), a non-jurisdictional affiliate of several 
interstate pipeline companies including Panhandle Eastern Pipe Line 
Company, Texas Eastern Transmission Corporation, Algonquin Gas 
Transmission Company and Trunkline Gas Company.
    DIGS states that the proposed facilities meet the criteria. In 
support of its claim that the facilities are gathering as set forth in 
a February 28, 1996, Statement of Policy with respect to OCS 
facilities, 74 FERC para. 61,222 as well as the gathering criteria set 
forth in Farmland Industries, Inc., 23 FERC para. 61,063, as modified 
in later orders. DIGS states that the Commission in its OCS Policy 
Statement added a new element to its analysis, granting a presumption 
of gathering to facilities designed to collect gas produced from water 
depths of 200 meters or greater, with the presumption extending to 
facilities up to the point or points of potential connection with the 
interstate pipeline grid.
    DIGS states that, as a second element of the gathering policy, the 
Commission indicated that where proposed OCS facilities are in 
proximity to existing interstate pipelines, the Commission will 
determine jurisdictional status on

[[Page 64346]]

the basis on the existing primary function test.
    With respect to the length and diameter of the line, DIGS points 
out that lines no greater than 24 inches in diameter continue to be 
consistent with a determination that the lines are gathering 
facilities. DIGS also notes that the 65-mile length of the Phase I 
spine is only as long as necessary to reach the interstate pipeline 
capacity sufficient to move the total estimated production. DIGS points 
out that the Commission found the 95-mile 20-inch Viosca Knoll pipeline 
to be gathering using the same rationale. With respect to the 
configuration of facilities, DIGS indicates that the Phase I facilities 
when completed will form a spine and laterals configuration, consistent 
with a finding of gathering. DIGS states that the Phase II facilities 
are a loop of existing facilities, but that this would not rule out a 
finding of gathering if the entire system is evaluated.
    DIGS states that the lack of compression on DIGS is consistent with 
gathering. Likewise, DIGS submits that the location of will along the 
entire system is indicative of gathering. In addition, DIGS states that 
the maximum available operating pressure (MAOP) of the existing system 
of 1440 psig and the anticipated MAOP for the Phase I facilities of 
1750 to 1770 is driven by the pressure of the gas production expected 
to flow through both portions of the system, consistent with a finding 
of gathering.
    DIGS notes that in the Policy Statement the Commission stated that 
it saw little difference in function between an interstate 
transportation line that takes gas to shore and a newly built line, 
that, for all practical purposes runs parallel to and serves the same 
purpose as moving gas to shore. DIGS points out that neither DIGS nor 
Phase I and II facilities parallel any existing interstate transmission 
lines. DIGS also states that the point at which the system could 
potentially interconnect with the existing interstate grid is located 
at the system's onshore terminus. In addition, DIGS notes, because 
Phase I of the system will be located upstream of the existing DIGS's 
gathering system and downstream of the MPS gathering system, it would 
be illogical for the Commission to find that Phase I performs a 
transmission. Likewise, it is noted that Phase II will merely loop the 
existing gathering facilities. Finally, it further submitted that the 
business purpose of the system is to provide gathering infrastructure 
to producers for potential and existing offshore production, including 
deepwater production, in the eastern Gulf of Mexico area.
    Any person desiring to be heard or to make any protest with 
reference to said petition should on or before December 9, 1996, 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). 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.
Lois D. Cashell,
Secretary.
[FR Doc. 96-30830 Filed 12-3-96; 8:45 am]
BILLING CODE 6717-01-M