[Federal Register Volume 75, Number 226 (Wednesday, November 24, 2010)]
[Notices]
[Pages 71733-71734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29641]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management, Regulation and Enforcement


Requirements for Measurement Facilities Used for the Royalty 
Valuation of Processed Natural Gas

AGENCY: Bureau of Ocean Energy Management, Regulation and Enforcement 
(BOEMRE), Interior.

ACTION: Notice summarizing the requirements of royalty measurement 
equipment at gas plants and other processing facilities.

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SUMMARY: This notice provides information regarding the 
responsibilities of lessees, operators, and lessees' representatives 
with respect to the measurement of Federal production at gas processing 
plants when royalty is reported and paid on processed gas at or 
downstream of the plant tailgate under 30 CFR 1206.153. This equipment 
includes any metering, sampling, or recording devices associated with 
the measurement of inlet production, residue gas, fuel gas, flare gas, 
condensate, natural gas liquids, or any other products recovered from 
Federal production.

DATES: Effective Date: This notice becomes effective December 27, 2010.

FOR FURTHER INFORMATION CONTACT: If you have any questions regarding 
this Federal Register notice, please contact Mr. Kelly Johnson, 
Production Development Office, Gulf of Mexico, by telephone at (504) 
736-2682 or by e-mail at [email protected]. To obtain copies of 
the most recent gas plant inspection records in the Gulf of Mexico 
Region, please contact Ms. Kathy Bell at (504) 736-2838 or by e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION: 
    The Code of Federal Regulations (CFR) at 30 CFR 1202.151(a)(1)(ii), 
pertaining to royalty on processed gas, provides that royalty must be 
paid on the value of ``residue gas and all gas plant products resulting 
from processing the gas produced from a lease subject to this 
subpart.'' Since the measurement of production at gas plants and 
separation

[[Page 71734]]

facilities has a direct impact on royalty reported and paid under 30 
CFR 1206.153, BOEMRE has begun to inspect measurement devices at plants 
and separation facilities that process production from Federal leases 
in the Gulf of Mexico Region for compliance with established standards 
governing gas and liquid hydrocarbon production measurement. We have 
recently completed the first phase of our inspection program and will 
share our findings with the operators of the measurement devices at 
these facilities. The findings will also be made available upon request 
to lessees and operators who may have interest in one or more specific 
gas plants. In the future, we will inspect these facilities again to 
determine if previously observed problems have been rectified.
    The BOEMRE recognizes that royalty reporting on processed gas 
volumes at the tailgate of an onshore gas plant is a prevalent practice 
in the Gulf of Mexico. To better fulfill our statutory duty to 
accurately determine oil and gas volumes upon which royalties are 
determined, we issue this notice to remind lessees and operators of 
their obligations to ensure accurate measurement of processed gas for 
which royalty is reported under 30 CFR 1206.153.
    The relevant regulations found in 30 CFR part 250, subpart L, 
impose responsibility for compliance with gas measurement rules on 
lessees, operators, and lessees' representatives, including lessees who 
process natural gas extracted from a Federal lease in the Gulf of 
Mexico Region at an onshore gas plant, separation facility, or other 
processing facility before paying royalties on said gas. To ensure 
accurate measurement of processed gas, lessees and operators are 
responsible for working with the operators of gas plants, separation 
facilities, or other processing facilities to ensure the maintenance, 
operation, and site security in accordance with the standards set forth 
in 30 CFR 250.1202, 250.1203, and 250.1205, of any measurement 
equipment, irrespective of location or ownership, used for the 
measurement of production from Federal leases.
    Title 30 CFR 250.1203(e) provides:
    If natural gas from a Federal lease on the OCS is transferred to a 
gas plant before royalty determination:
    (1) You must provide the following to the Regional Supervisor upon 
request:
    (i) A copy of the monthly gas processing plant allocation 
statement; and
    (ii) Gross heating values of the inlet and residue streams when not 
reported on the gas plant statement.
    (2) You must permit BOEMRE to inspect the measurement and sampling 
equipment of natural gas processing plants that process Federal 
production.
    Accordingly, you are given notice that BOEMRE may request 
assistance from lessees or operators to gain access to any gas plant, 
separation facility, or other processing facility which initially 
denies access to BOEMRE inspection personnel, for the purpose of:
     Inspecting the measurement and sampling equipment of 
natural gas processing plants that process Federal production;
     Remediating, in a timely manner, any observed 
inconsistency with gas measurement and site security standards set 
forth in 30 CFR 250.1202, 250.1203, and 250.1205; and
     Maintaining onsite records and providing copies, when 
requested by BOEMRE, of monthly allocation statements, meter or tank 
run tickets, gas meter volume statements, meter proving reports, or 
other documentation related to gas measurement.

Paperwork Reduction Act of 1995 Statement

    The collections of information referred to in this notice are 
contained in 30 CFR part 250 subpart L, 30 CFR part 212 subpart B, and 
30 CFR part 1206 subpart D. The Office of Management and Budget has 
approved the information collection requirements in these regulations 
under Office of Management and Budget Control Numbers 1010-0051, 1010-
0136, and 1010-0139. This notice does not impose additional information 
collection requirements subject to the Paperwork Reduction Act of 1995.

    Authority:  43 U.S.C. 1334.

    Dated: October 22, 2010.
Robert P. LaBelle,
Acting Associate Director for Offshore Energy and Minerals Management.
    Dated: October 22, 2010.
Greg J. Gould,
Director, Office of Natural Resources Revenue.
[FR Doc. 2010-29641 Filed 11-23-10; 8:45 am]
BILLING CODE 4310-MR-P