Document 3QgzVz75jM9Z7VBZVJ9D72o30

Federal Register / Vol. 51, No. 119 / Friday. )une 20, 1986 / Notices 22545 ft 1 vf>t>' . .l$- -p!{>?: SL &: P I It I to connect MiDCO's well to Northern an additional six months to coincide Natural's system. Construction with the term of the storage commenced July 16.1985 and was arrangement. Service under the completed and the line tied in on July 29, transportation agreement commenced 1985. on August 29.1984. North Central's CLARCO'8 agreement to purchase gas August 13,1984 storage arrangement from'MIDCO, the separate written with MichCon provided that gas would agreement to'sell the gas to Northern be injected into slorage over an Cas Marketing, and its substantial eighteen-month period and then expenditures in reliance thereon prior to withdrawn from storage over a twelve October 9,1985 demonstrate sufficient month period. economic substance to satisfy the revised standard. However, the information submitted thus far does not show that the transaction was of a type which qualifies for transitional treatment. Accordingly, prior to final resolution of the rehearing petitions, CLARCO will be given a further opportunity to make this threshold showing by submitting a copy of anagreement executed on or before October 9,1985 evidencing the destination or use of the gas with respect to the transportation leg for which transitional treatment is sought. North Central further slates that it paid ANR over $278,000 for the transportation and delivery of gas to MichCon and over $321,000 to MichCon for the injection and physicat storage of the gas. North Central states that the payments were made after the written contract was executed and after the verbal agreement to extend the contract for an additional six months was made, but before October 9,1985. We previously have authorized transportation of gas from storage pursuant to a verbal agreement entered into prior to October 9,1985, when the North Central Public Service Company transportation from storage was part of On April 3.1986, North Central Public . Service Co. (North Central), a local distribution company that serves parts of .Minnesota and Iowa, requested a waiver in order to permit the transportation of gas out of storage.0 North Central states that on August 10,1984; it entered into a transportation agreement with ANR Pipeline Company (ANR) providing for the transportation a broader transportation agreement that was commenced prior to October 9.1985 by transporting that same gas into storage." In essence, what North Central and ANR have is a single transaclion of transporting gas into storage and back out from storage. That transaction was commenced pursuant to a written transportation agreement executed prior to October 9,1985, and of natural gas incident.to a storage (he transportation itself was commenced arrangement between North Central and prior to October 9,1985. Michigan Consolidated Cas Company's Prior to October 9,1985, and in Interstate Storage Division (MichCon). reliance on both the written North Central's written transportation transportation agreement and the agreement with ANR provided for . written storage agreement. North transportation service pursuant to Central expended significant funds to section 311 of the Natural Cas Policy purchase gas and transport it into Act for a two-year term, the maximum storage. This satisfies thb revised allowable under 284102(b)(i) of the standard. North Central relied to its Commission's Regulations. Prior to the detriment upon the verbal agreement to commencement of transportation transport the gas back out of storage. service, however, the parties verbally North Central would be precluded from agreed that the term of service would be retrieving its own gas from storage if the extended at.the appropriate time 10 for verbal agreement is not given effect. The six-month extension agreed to is within * On February 20,198fli North Central filed a (he parameters of extensions permitted similor request for woiver topermit the transportation of gos out of storage to meet Immediate winter heating season requirements for the,February-27 to March 31,1886 period. We dismiss North Central's first requestaamoot. under former 284.105 ofthe Commission's regulations. Accordingly, we grant North' Central's request for waiver of the transitional Section JftMOtyc) of the Commission's regulations in effect at the initiation of the transportation agreement provided that extension reports be filed not less than ninety days prior to the expiration of a contract for the transportation of provisions of 284.105 of the regulations to the extent necessary to permit the transportation agreement between North Central and ANR to continue for gas authorized under S 284.102(a). To extend ANR's transportation, agreement wilh-North Centra) under an extended six-month period. the former regulations, the fifing of un extension rcport.would have been required in May. 1986. Prior 11 Regutalion of Natural Cas Pipelines After to that date, however, the Commission issued Order Partial Wellhead Decontrol (Valley Cas Company). No. 436- Extension reports are not needed or 33 VERC161.302 (issued November 27. IMS). SO FR required for the transactions under Order No. 436.. S1.B44. Endevco, Inc. Leaf River Forest Products. Inc. owns a paper mill in Mississippi that uses propane and fuel oil as its fuel source. Because of the "turnaround in the natural gas market in the last few years." Leaf River has decided to convert to natural gas. To that end; Endevco 10 and Leaf River entered into negotiations in early 1985 whereby Endevco proposed lo sell gas to Leaf River and (o construct a pipeline in order to connect Leaf River's plant lo United Gas Pipe Line Company. In reliance on these negotiations. Endevco entered into an oral agreement with United on or about May 30,1985, whereby United agreed to transport gas for Endevco's system supply under section 311 of the NGPA. Further, on [uly 24,1985, Endevco executed a written agreement lo purchase gas in Texas from Anatole Exploration. Inc. Endevco has also secured gas supplies from other producers for sale lo LeaT River. In order lo connect Anatole's wells lo United's system. Endevco constructed two miles of gathering tines at an estimated cost of $200,000. Construction was completed in August 1985, i.e., after Ihe sales agreement was executed and in reliance thereon. The gas supplies obtained from the other producers would be delivered into United's system ' through three existing connections; The gas purchase contract between Endevco and Anatole Exploration, and Endevco's subsequent expenditures to connect Anatole's wells to United's system prior to October 9,1985, satisfies the revised standard. The waiver request is granted. Trinity Pipeline Company In'September 1985, Trinity, an intrastate pipeline, orally agreed to sell up to 5,000 Mcf of gas per day to a local distribution company in Texas. In late September 1985, ANR Pipeline Company orally agreed to transport gas tinder section 311 of the NGPA from a producer In Texas to Trinity; A written transportation agreement was executed on October 8,1985. By October 3,1985, arid prior to the execution of a written transportation contract, Trinity had ordered equipment, had surveyed a right-of-way, and had constructed some facilities in order to carry out this transaclion. Trinity spent " Endevco owns and operates several intrastate pipeline systems in various states, including Mississippi- Endevco states that ttB facilities and operations within Mississippi are exempt from regulation under either section 1(b) or 1(c) of the Natural Gas Act. GLEASON-000810