Presentation of Gulf South Pipeline Company, LP

Transcription

1 Presentation of Gulf South Pipeline Company, LP Texas Eastern Gas Quality Technical Conference Docket No. RP December 8, 2009

2 Gulf South Overview Gulf South System Map 2

3 Gulf South Overview Gulf South has often raised concerns about the effect of overly restrictive gas quality specifications on the seamless interstate pipeline grid, including: Docket No. RP , et al.: filed for new gas quality specifications on its entire system that would match specifications of its downstream interconnecting interstate pipelines, ensuring that it could continue to make deliveries from both its Legacy System and the Expansion Facilities. This filing was rejected without prejudice due to insufficient technical evidence. Docket No. RP , et al.: filed for new gas quality specifications on the Expansion Facilities only. This filing was approved. 3

4 Gulf South Legacy System Overview Gulf South delivers approximately 625,000 MMcf/day into Texas Eastern from its Legacy System. Gulf South has been delivering this gas into the Texas Eastern system under its current gas quality specifications without issues for many years. 4

5 Gulf South Legacy System Overview Current Legacy System Gas Quality Specifications Comparison Gulf South Texas Eastern Legacy System Max BTU 1175 None Wobbe None None CO 2 3% 3% O 2 0.2% 0.2% Sulphur 20 grains/ccf 10 grains/ccf (equivalent) C2+ None None C4+ None None C5+ GPM Gas Quality Specifications Comparison Gulf South Texas Legacy System Eastern Max BTU Wobbe None 1313 to 1400 CO 2 3% 2% O 2 0.2% 0.1% Sulphur 20 grains/ccf 5 grains/ccf (equivalent) C2+ None 12% C4+ None 1.5% C5+ GPM safe harbor (equivalent to C6+ GPM) \ 5

6 Proposed Specifications Are Not Supported By Technical, Engineering, and Scientific Considerations The Policy Statement sets forth five principles with respect to tariff provisions governing gas quality, including that gas quality specifications should be developed "based upon sound technical, engineering, and scientific considerations." Texas Eastern has not provided any technical, engineering, or scientific evidence to support its proposed gas quality specifications. Rather, Texas Eastern provides only testimony on changing gas supplies, historical gas quality data, and interconnecting pipeline information and relies on the fact that its specifications were developed as part of an allegedly collaborative process. 6

7 Proposed Specifications Are Not Supported By Technical, Engineering, g, and Scientific Considerations (Cont.) Examples: Texas Eastern states that one factor in setting its proposed specifications was matching up with the downstream pipelines in Texas Eastern s market areas, but provides no evidence that its downstream pipelines had or would reject the gas on its system. See Texas Eastern Tariff Filing, Docket No. RP , at p. 5 (Oct. 2, 2009) Carbon dioxide is potentially corrosive when combined with water, and Texas Eastern understands from members of the collaborative [word missing] that carbon dioxide may interfere with LDC processes such as liquefaction of gas at peak shaving facilities. See Texas Eastern Tariff Filing, Docket No. RP , at p. 8 (Oct. 2, 2009) 7

8 Proposed Specifications Will Disrupt the Seamless Interstate Grid, Reduce Amount of Competitive Supply Available to Market, and are Unduly Discriminatory 8

9 Specifications Will Disrupt the Seamless Interstate Grid, Reduce Amount of Competitive Supply Available to Market, and are Unduly Discriminatory (cont.) Texas Eastern has offered waivers and exemptions for certain entities that may not be able to meet the new specifications, such as certain production facilities directly connected to its system. No waivers or exemptions offered to Gulf South or any of its affiliates. Effectively protects on-system gas suppliers from competition from other interstate pipelines. Creates an unfair competitive advantage to suppliers directly connected to Texas Eastern. Will result in a chilling effect on other competition and investment in new pipeline infrastructure. 9

10 Conclusion Gulf South has been delivering similar quality gas into the Texas Eastern system under its current specifications with no issues for many years. Proposed specifications are not supported by sound technical, engineering, and scientific considerations. Proposed specifications will disrupt the seamless interstate grid, will reduce amount of competitive supply available to market, and will unduly discriminate against supply that is not directly connected to the Texas Eastern system. Proposed specifications should be rejected as unjust and unreasonable. 10