Document 4QKxeoZzQg0gwDB1eO0R5Vy2a

Federal Register / Vol. 51, No. 119 / Friday, |une 20, 1986 / Notices 22545 lo connect MIDCO's well to Northern ' Natural's system. Construction commenced July IB, 1985 and was completed and the line tied in on July 29, 1985. CLARCO's agreement to purchase gas from'MIDCO, the separate written agreement to sell the gas to Northern Cas Marketing, and its substantial expenditures in reliance thereon prior to October 9,1985 demonstrate sufficient 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 Public Service Company 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.* North Central slates that on August 10,1984, it entered into a transportation agreement with ANR Pipeline Company (ANR) providing for the transportation of natural gas incident.to a storage arrangement between North Central and Michigan Consolidated Cas Company's Interstate Storage Division (MichCon). North Central's written transportation agreement with ANR provided for . transportation service pursuant to section 311 of the Natural Cas Policy Act for a two-year term, the maximum allowable under $ 284'.102(bj(i) of the Commission's Regulations. Prior to the commencement of transportation service, however, the parties verbally . agreed that the term of service would be extended at the appropriate time 10 for #. On February 28,1888; North Central filud a similor request for waiver lopcrmil the transportation of gos out of storage to meet immediate wiiiter'heating season requirements for the.February-27 to March 31.1986 period. We dismiss North Central's first requesi as'mooL 0 ot \V.n Cmxnv.s.iOiV. regulations in cfrect at the initiation of the transportation agreement provided that extension reports be filed not less than ninety days prior lo the expiration of a contract for the trunspurtuiion of gas authorised under t 2S4.102(a). To extend ANR's transportation agreement wilh-North Central under the former regulations, the tiling or un extension report would have been required in May. 1986. Prior to that date, however, the Commission issued Order No. 436. F.xtcnsinn reports ure not needed or required for the transactions under Order No. 436.. an additional six months to coincide with the.term of the storage arrangement. Service under the transportation agreement commenced on August 29.1984. North Central's August 13,1984 storage arrangement with MichCon provided that gas would be injected into storage over an eighteen-month period and then withdrawn from storage over a twelvemonth period. North Central further states 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 physical 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 lo October 9.1985, when the transportation from storage was part of 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 transaction 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 the transportation itself was commenced prior to October 9,1985. Prior to October 9,1985, and in reliance on both the written transportation agreement and the written storage agreement, North Central expended significant funds to purchase gas and transport it into storage. Thia satisfies Ihe revised standard. North Central relied to its detriment upon the verbal agreement to transport the gas back out of storage. North Central would be precluded from retrieving its own gas from storage if the verbal agreement is not given effect. The six-month extension agreed to is within the parameters of extensions permitted under former 284.105 ofthe Commission's regulations. Accordingly, we grant North Central's request for waiver of the transitional provisions of 8 284.105 of the regulations to the extent necessary to permit the transportation agreement between North Central and ANR to continue for an extended six-month period. 11 Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol (Valley Cas Company). 33 EERC % 61.302 (issued Novemhcr 27.1085). 50 FR SIM 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 ,a and Leaf River entered into negotiations in early 1985 whereby Endevco proposed to sell gas to Leaf River and to construct a pipeline in order (o connect Leaf River's plant to 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 July 24,1985, Endevco executed a written agreement to purchase gas in Texas from Anatole Exploration, Inc. Endevco has also secured gas supplies from other producers for sale to Leaf River. In order lo connect Anatole's wells lo United's system, Endevco constructed two miles of gathering lines at an estimated cost of $200,000. Construction was completed in August 1985. i.e., after the 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 lo 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 transaction. Trinity spent '* Endevco owns and operates several intrastate pipeline systems in various states, including Mississippi- Endevco states that its facilities and operotions within Mississippi are exempt from regulation under either section 1(b) or 1(c) of the Natural Cos Act. GLEASON-000810