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Interpretation Response #PI-09-0002 ([CDX Gas] [Mr. Greg Schrab])

Below is the interpretation response detail and a list of regulations sections applicable to this response.

Interpretation Response Details

Response Publish Date:

Company Name: CDX Gas

Individual Name: Mr. Greg Schrab

Location State: TX Country: US

View the Interpretation Document

Response text:

July 14, 2009

Mr. Greg Schrab
HSE Coordinator
CDXGas
14800 Landmark Blvd, Suite 400
Dallas, TX 75254

Interpretation #PI-09-0002

Dear Mr. Schrab:

In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA) dated September 19,2008, you requested an interpretation of the applicability of the Federal pipeline safety regulations in 49 CFR Part 192 to your Slaytonville natural gas pipeline. You stated that the Slaytonville line is an eight-mile line connecting Central Station, a gas processing and compression facility, to the CenterPoint gas transmission pipeline. You explained that, contrary to a recent determination by the Arkansas Oil and Gas Commission that the Slayton ville line is a transmission line, you believe that the Slaytonville line is an "incidental gathering" line under section 2.2(a)(l)(E) of API RP 80 as incorporated in Part 192 and, therefore, unregulated since it is located entirely within a Class 1 area. You requested a final determination from PHMSA as to whether the Slaytonville line is a regulated gas transmission line or a non-regulated incidental gathering line.

Pursuant to 49 U.S.C. 60101 et seq., PHMSA prescribes and enforces standards and regulations that apply to the gathering, transmission, and distribution of gas by pipeline. A gathering line is defined in 49 CFR § 192.3 as "a pipeline that transports gas from a current production facility to a transmission line or main." That same section defines a transmission line as "a pipeline, other than a gathering line, that: (1) Transports gas from a gathering line or storage facility to a distribution center, storage facility, or large volume customer that is not downstream from a distribution center; (2) operates at a hoop stress of 20 percent or more of SMYS; or (3) transports gas within a storage field."

On March 15, 2006, PHMSA issued a Final Rule that defined a "regulated gathering line" and set forth the requirements that apply to regulated gathering lines (71 FR 13289). The rule adopted API RP 80 with certain limitations. Section 192.8 now provides as follows:

§ 192.8 How are onshore gathering lines and regulated onshore gathering lines determined?

(a) An operator must use API RP 80 (incorporated by reference, see § 192.7), to determine if an onshore pipeline (or part of a connected series of pipelines) is an onshore gathering line. The determination is subject to the limitations listed below. After making this determination, an operator must determine if the onshore gathering line is a regulated onshore gathering line under paragraph (b) of this section.

(1) The beginning of gathering, under section 2.2(a)(l) of API RP 80, may not extend beyond the furthermost downstream point in a production operation as defined in section 2.3 of API RP 80. This furthermost downstream point does not include equipment that can be used in either production or transportation, such as separators or dehydrators, unless that equipment is involved in the processes of "production and preparation for transportation or delivery of hydrocarbon gas" within the meaning of "production operation."

(2) The endpoint of gathering, under section 2.2(a)(I)(A) of API RP 80, may not extend beyond the first downstream natural gas processing plant, unless the operator can demonstrate, using sound engineering principles, that gathering extends to a further downstream plant.

(3) If the endpoint of gathering, under section 2.2(a)(l)(C) of API RP 80, is determined by the commingling of gas from separate production fields, the fields may not be more than 50 miles from each other, unless the Administrator finds a longer separation distance is justified in a particular case (see 49 CFR § 190.9).

(4) The endpoint of gathering, under section 2.2(a)(l)(D) of API RP 80, may not extend beyond the furthermost downstream compressor used to increase gathering line pressure for delivery to another pipeline.

While you correctly point out that the rule did not expressly adopt a limitation on the fifth possible endpoint of gathering in section 2.2(a)(1 )(E) of API RP 80, PHMSA considers this to be a drafting error that does not reflect PHMSA's intent. In the Supplemental Notice of Proposed Rulemaking issued on October 3,2005, PHMSA expressed its intent to "assure gathering line determinations do not stray significantly from PHMSA' s historic interpretations of gathering or do not abuse the "furthermost downstream" concept." (70 FR 57540)

Historically PHMSA has not accepted the incidental gathering designation. Based on the pressures at which these lines typically operate and the fact that they share maintenance and inspection needs with high pressure transmission lines, PHMSA has historically treated these lines as regulated transmission lines and did not intend to make any change in the rule. Indeed, the intent of Congress in mandating the rulemaking was to bring additional pipeline mileage into the regulations, not to deregulate lines.

In our experience, the majority of operators treat these lines as regulated transmission lines and PHMSA believes they will continue to do so. Although incidental gathering designations are currently permissible due to the drafting error and would apply to the Slaytonville line based on the description you provided, PHMSA is currently considering whether a rule amendment should be undertaken to correct the rule and propose adding a fifth limitation on API RP 80 which would mean incidental gathering determinations are no longer permissible. Because PHMSA may undertake such a rule amendment in the near future, operators should strongly consider keeping incidental gathering designations to an absolute minimum and treating these lines as regulated transmission lines.

In addition, be advised that because an incidental gathering line is a single connecting line and not a system oflines, by definition it is limited to the first tie-in downstream of the processing or compression facility even if that connection does not extend all the way to the large diameter interstate line.

Finally, with respect to the beginning of gathering, the system maps you submitted as supporting documentation incorrectly depict CDX's production operations as extending to the Central Station. The relevant API RP 80 diagram (Fig. 2-6) clearly shows that gathering begins at the terminus of production and transports gas to the processing, compression location depicted by the schematic. Proper application of the definition for production in API RP 80, section 2.3 and the supplemental definitions in section 2.4 indicate that the production operations in the CDX system cease much further upstream, at least as far upstream as the facilities identified on the map as "PODS". Further review of the equipment and processes would be necessary to make a determination of the exact endpoint of production and beginning of gathering.

I hope that this information is helpful to you. If I can further assist you with this or any other pipeline safety regulatory matter, please contact me at (202) 366-4046.

Sincerely,

John A. Gale
Director, Office of Regulations

Regulation Sections

Section Subject
192.8 How are onshore gathering lines and regulated onshore gathering lines determined?