Interpretation Response #PI-10-0024 ([XTO Energy, Inc.] [Ms. Alice Ratcliffe])

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

Interpretation Response Details

Response Publish Date: 07/12/2011

Company Name: XTO Energy, Inc.

Individual Name: Ms. Alice Ratcliffe

Location State: TX Country: US

View the Interpretation Document

Response text:

Ms. Alice Ratcliffe

DOT Compliance Specialist

XTO Energy, Inc.

810 Houston Street

Fort Worth, TX  76102-6298

Dear Ms. Ratcliffe:

In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), you asked for an interpretation of 49 CFR 192.1(b)(5)(ii) and 192.5(b)(1)(i).  Specifically, you asked whether or not your pipeline system located in and near Cook Inlet, Kenai, Alaska is subject to the Federal Pipeline Safety Regulations.  You believe that §§ 192.1(b)(5)(ii) and 192.5(b)(1)(i) provide your pipeline with exclusion from the Federal Pipeline Safety Regulations and, therefore, you eliminated the pipeline from your 2009 calendar year annual reporting requirements.

You stated that this pipeline was previously utilized for transportation of produced oil and water from your platforms to an onshore facility through two 8.625-inch pipelines.  In 2005, you stated, one of the two 8-inch pipelines was converted to transport natural gas from shore to the platforms for heating and other platform usage.  You purchase the natural gas from Marathon and transport the natural gas through a 2-inch pipeline owned and operated by XTO which connects to the existing 8-inch subsea pipeline.  Since XTO has decided to designate this 8-inch pipeline for natural gas transportation, it is the intention of XTO to permanently remove it from the liquid annual report, integrity management, and other liquid pipeline reporting and compliance requirements in 49 CFR Part 195.

You stated that the pipeline should also be exempted from the Part 192 requirements because:

1."The pipeline transports only petroleum gas, supplies gas to a single customer (XTO) and the onshore portion of the pipeline is located completely on the premises of the customer.  Thus, according to 49 CFR § 192.1(b)(5)(ii), this pipeline would not be subject to Part 192," and

2.The American Petroleum Institute Recommended Practice 80 (API RP 80), "incorporated by reference, indicates that fuel return pipelines used to support production operations are classified as "gathering" and further, gathering FAQ #8 confirms this interpretation."  Section 192.5(b)(1)(i) reflects that offshore pipelines are considered Class 1, and Class 1 gathering is exempt from Part 192 requirements.

Analysis

Your first question is whether § 192.1(b)(5)(ii) excludes your pipeline from the Part 192 requirements.  The exclusion in § 192.1(b)(5)(ii) applies only to the transportation of petroleum gas or petroleum gas/air mixture.  Your pipeline transports natural gas and therefore does not satisfy the requirements of that exemption.

Your second question is whether your pipeline is a Class 1 gathering line and therefore not regulated by Part 192.  Section 192.3 defines a gathering line as "a pipeline that transports gas from a current production facility to a transmission line or main."  You purchase natural gas from Marathon and transport it to your platforms.  The pipeline does not satisfy the definition and therefore is not a gathering line.  The definition of "gathering" in API RP 80 does not supersede the definition in §192.3.   

Under § 192.3, a pipeline that transports gas from a transmission line to a large volume customer that is not downstream from a distribution center is a transmission line.  In this instance, there is no distribution center or transfer of operating responsibility to a distribution system.  Therefore, this pipeline is a transmission line, as defined in §192.3.  Moreover, you stated that the volume of gas transported by this pipeline is 1 mmcf/d.  Large volume customers include those receiving this quantity of gas.

You stated that since this pipeline has begun transporting natural gas, your intention is to permanently remove this pipeline from the liquid annual report, integrity management, and other liquid pipeline reporting and compliance matters required by Part 195.  Please note that requirements for conversion to service subject to Part 192 appear in § 192.14.

I hope that this information is helpful to you.  If I can be of further assistance, please contact me at 202-366-4046.

Sincerely,

John A. Gale

Director

Division of Standards and Rulemaking

Regulation Sections