Interpretation Response #PI-14-0004 ([Duane Morris LLP] [Ms. Sheila S. Hollis])
Below is the interpretation response detail and a list of regulations sections applicable to this response.
Interpretation Response Details
Response Publish Date:
Company Name: Duane Morris LLP
Individual Name: Ms. Sheila S. Hollis
Location State: DC Country: US
View the Interpretation Document
Response text:
Ms. Sheila S. Hollis
Duane Morris LLP
Counsel for Aguirre Offshore GasPort, LLC
505 9th Street, N.W., Suite 1000
Washington, DC 20004-2166
Dear Ms. Hollis:
In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA) dated January 7, 2014, you requested a determination about the applicability of 49 CFR Part 192 to a proposed Aguirre Offshore GasPort project ("Project"). You stated that the Project is being developed by Aguirre LLC, a wholly owned subsidiary of Excelerate Energy, in cooperation with the Puerto Rico Electric Power Authority. The Project will be located in Salinas, along the southern shore of the Commonwealth of Puerto Rico, in Commonwealth waters, and will include certain facilities to import, store and vaporize liquefied natural gas and to deliver the vaporized natural gas by pipeline to an on-shore Aguirre Power Complex as fuel for power generation in the Commonwealth. The Project will consist of: (1) an Energy Bridge Regasification Vessel that functions as a floating storage and regasification unit, (2) an offshore berthing platform, and (3) an approximately 4.1 mile-long subsea natural gas pipeline that connects the offshore berthing platform to the Aguirre Power Complex.
You stated that on April 17, 2013, Aguirre LLC submitted an application, pursuant to Section 3 of the Natural Gas Act, to the Federal Energy Regulatory Commission ("FERC") to site, construct and operate an LNG terminal. You asserted that FERC regulates the berthing platform and the Interconnecting Pipeline. As a result, the Interconnecting Pipeline is subject to PHMSA's authority under 49 CFR Part 192 because it is an interstate gas pipeline facility as defined in the Natural Gas Pipeline Safety Act ("NGPSA") and other Federal pipeline safety laws, as amended in 49 USC § 60101, et seq. You asked whether the new pipeline would be regulated by PHMSA.
The interconnecting pipeline falls within the definition of "pipeline facility." However, states (including Puerto Rico, as defined in the 49 USC statute) can only regulate "an intrastate pipeline facility or intrastate pipeline transportation to the extent that the safety standards and practices are regulated by a State authority" participating in the state pipeline safety certification program established under the NGPSA. In the NGPSA, an intrastate pipeline facility is "a gas pipeline facility and transportation of gas within a State not subject to the jurisdiction of the FERC under the Natural Gas Act (15 U.S.C. 717 et seq.)." Therefore, the issue as to whether PHMSA or the Commonwealth of Puerto Rico regulates the pipeline under Part 192 is based upon by the pipeline's interstate or intrastate designation.
49 USC § 60101(a)(6) defines interstate pipeline as:
§ 60101. Definitions
(a) General.--In this chapter--
...
(6) "interstate gas pipeline facility" means a gas pipeline facility—
(A) used to transport gas; and
(B) subject to the jurisdiction of the Commission under the Natural Gas Act (15 U.S.C. 717 et seq.);
Then 15 USC § 717(b) states:
§ 717. Regulation of natural gas companies
...
(b) Transactions to which provisions of chapter applicable
The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, and to the importation or exportation of natural gas in foreign commerce and to persons engaged in such importation or exportation, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.
It is PHMSA's understanding that the natural gas is imported in foreign commerce. Under both 49 USC § 60101(a)(6) and 15 USC § 717(b), the 4.1 mile natural gas pipeline likely meets the requirements for an interstate pipeline. Assuming that the pipeline is subject to FERC's jurisdiction, the Interconnecting Pipeline would be an interstate pipeline facility regulated by PHMSA under Part 192.
If we can be of further assistance, please contact Tewabe Asebe of my staff at 202-366-5523.
Sincerely,
John A. Gale
Director, Office of Standards and Rulemaking
The Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR Parts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations.