Midweek Energy Updates: November 8, 2017

The full version of these articles will appear in The Foster Report No. 3173, published on Nov. 10, 2017

 

Marathon Pipe Line Petitions for Declaratory Order for Redesign and Expansion Project

November 6, 2017

Marathon Pipe Line LLC (OR18-4) filed a petition with the Commission on November 1 for a declaratory order for a redesign and expansion project to combine the Woodpat Pipeline and the Roxpat Pipeline, and increase system capacity by 130,000 bpd.

MPL asked the Commission to act on the petition by 1/31/18, and MPL expects the expansion capacity to be in service in the second quarter of 2018.

MPL told FERC that the project will be in two phases, the first phase will be combining the Woodpat Pipeline and the Roxpat Pipeline, and then in the second phase MPL will build various capital projects to increase capacity on the new system.

The Woodpat Pipeline is a 57-mile, 22-inch diameter crude oil pipeline that runs from Wood River, Illinois, to Patoka, Illinois, and is owned and operated by MPL. Woodpat Pipeline’s current capacity is 215,000 bpd, and it offers transportation services under FERC Tariff No. 323.8.0.

The Roxpat Pipeline is a 58-mile, 12-inch diameter crude oil pipeline that runs from Roxana, Illinois, to Patoka, Illinois, and is leased and operated by MPL. Roxpat Pipeline’s current capacity is 94,000 bpd, and it offers transportation services under FERC Tariff No. 330.6.0.

 

 

Rover Disappointed With Ohio AG Lawsuit Seeking Injunctive Relief, Penalties on Construction

November 6, 2017

Rover Pipeline is disappointed that Ohio Attorney General Mike DeWine filed a lawsuit against the company, seeking injunctive relief and financial penalties for alleged violations of environmental laws and regulations, a spokeswoman for the company said November 6.

In the November 3 lawsuit, DeWine’s office charged Rover with polluting state waters, failing to comply with Ohio Environmental Protection Agency regulations, violating limits on water discharge permits, declining to produce samples at water discharge sites, failing to obtain a construction storm water permit, and other environmental violations during construction of Rover’s $4.2 billion natural gas pipeline.

The lawsuit, which came at the request of Ohio EPA Director Craig Butler, seeks civil penalties of $10,000 for each day of each violation – with numerous violations listed that date back to April 2017 – along with reimbursement to Ohio EPA and the Attorney General’s office for all costs incurred and that Rover provide relief to residents if samples show that water supplies were contaminated.

Rover and parent company Energy Transfer Partners (ETP) have worked cooperatively with the Ohio EPA for the past six months to try and resolve issues around fluid spills at horizontal directional drilling (HDD) sites in a manner that is satisfactory to all parties, the ETP spokeswoman said. “We are therefore disappointed that they have resorted to litigation when Ohio EPA has acknowledged publicly that Rover has complied with all applicable environmental laws,” she said in an email.

The lawsuit will not affect the construction timeline for Rover, she said. Service began on August 31 for a portion of phase one of the Rover project, from Cadiz, Ohio, to Defiance, Ohio, with the full first phase expected to be in service by the end of 2017. The entire project, with a capacity of 3.25 Bcf/d, is expected to be in service at the end of the first quarter of 2018, ETP officials have said.

Rover is a 713-mile project to move gas from Appalachian production regions in Pennsylvania, Ohio, and West Virginia across Ohio and into Michigan, with several supply laterals reaching into Marcellus and Utica shale areas. It is designed to move gas to multiple markets through different pipeline connections, with deliveries to include the gas storage hub at Dawn, Ontario.

 

 

Second Circuit Stays FERC Notice to Proceed for Millennium’s Valley Lateral

November 7, 2017

The U.S. Court of Appeals for the Second Circuit on November 2, issued an order granting the New York State Department of Environmental Conservation’s (NYSDEC) motion for an emergency stay of the Commission’s October 27 notice to proceed with construction for Millennium Pipeline’s (CP16-17) Valley Lateral Project (New York State Department of Environmental Conservation v. FERC, No. 17-3503).

The notice by FERC’s Office of Energy Projects to proceed with construction for the Valley Lateral Project was based on Millennium’s October 20 renewed request to the Commission for a notice to proceed with construction activities after filing an initial request to proceed on July 21.[1]

The project is designed to deliver up to 127,000 Dth/d to the Valley Energy Center being built by Competitive Power Ventures (CPV) in Wawayanda, New York.

“We believe that we have all the approvals and permits needed to begin construction and anticipate that the stay by the Second Circuit will be temporary,” said Millennium Pipeline in a statement. “While we would prefer to reach a resolution with the state, we are prepared to move forward. After multiple delays, we are looking forward to constructing this much-needed project to serve a power plant that received all required permits from the state and is nearing completion. The question now is not whether or not the power plant will operate, the question is whether the plant will be powered by oil or with affordable, cleaner natural gas.”

In an October 30 request to the Commission for a stay of the notice to procced, NYSDEC said the Commission should not have authorized Millennium to proceed without ruling on its pending motion for reopening and stay, and its pending request for rehearing.

[1]   See, NYSDEC Asks FERC to Stay Notice to Procced with Construction of Millennium’s Valley Lateral, FR No. 3172, pp. 16-18. For more information, see, Following Court’s Advice, Millennium Asks FERC for Authority to Build Valley Lateral, FR No. 3159, pp. 17-18, FERC Rules Against NYSDEC on Millennium Valley Lateral Project, FR No. 3165, pp. 13-14, and Millennium Pipeline Renews Request for Notice to Proceed for Valley Lateral Project, FR No. 3171, pp. 31-32.

 

Shippers Ask FERC to Reject Market-based Rate Plan for West Texas LPG Pipeline

November 7, 2017

Several shippers said FERC should reject the market-based rate request of West Texas LPG Pipeline LP (WTXP) because the natural gas liquids (NGL) pipeline based its application (OR17-19) on a flawed market analysis that used incorrect products, overly broad geographic regions, and erroneous definitions of transportation alternatives available to shippers.

Among those who filed November 2 protests of WTXP’s 8/4/17 application was Targa Liquids Marketing & Trade LLC, EnLink NGL Marketing LP, and a group of Indicated Shippers. They all asked FERC to deny the pipeline’s application and referred to similar deficiencies in WTXP’s reasoning that it lacks market power in the relevant markets.

If FERC chooses not to reject WTXP’s application, it should set it for hearing, investigation, and discovery procedures before an administrative law judge, the shippers said in three separate filings.

WTXP Application. WTXP, a pipeline jointly owned by ONEOK and Martin Midstream Partners, transports NGLs from the Permian Basin, Barnett Shale, and Haynesville Shale production areas to storage facilities, fractionation facilities, and pipeline connections in the Mont Belvieu, Texas, area, a recognized hub for NGL deliveries. In its application, it sought authority to charge market-based rates from the Permian Basin and Barnett Shale areas as origin markets to fractionation facilities within a 100-mile radius in the Mont Belvieu area as a destination market.

In the origin markets, the relevant product is each market’s ability to absorb NGLs, either through transportation receipts or local consumption, while in the destination market, the relevant product market is the market’s supply of NGLs, WTXP said.

 

 

These articles will appear as published in The Foster Report No. 3173, being issued on November 10, 2017

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