Interpretation Response #PI-82-003 ([Panhandle Eastern Pipe Line Co.] [Kenneth W. Haile,])

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

Interpretation Response Details

Response Publish Date: 02/05/1982

Company Name: Panhandle Eastern Pipe Line Co.

Individual Name: Kenneth W. Haile,

Location State: MO Country: US

View the Interpretation Document

Response text:

Mr. Kenneth W. Haile, Esq.

Attorney at Law

Panhandle Eastern Pipe Line Co.

3444 Broadway

Kansas City, Missouri 64141

Dear Mr. Haile:

Your letter of January 15 seeks an interpretation of the classification of Panhandle Eastern's Sneed Compressor Station, Moore County, Texas. You seek a determination that the Sneed Station falls within the pipeline safety jurisdiction of the Department of Transportation (DOT) under the Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. 1671 et seq.), and more specifically that it does not fail within the gathering exclusion contained in 49 U.S.C. 1671(3).

From your letter and attachments, it appears that the Sneed Station is at the upstream end of Panhandle Eastern's main transmission line originating in Texas and terminating at the Canadian border. That station is connected to several gathering lines furnishing gas from numerous wells in the area. Processing plants operated by Phillips Petroleum Company and Panhandle Eastern are located just downstream of the compressor, and the Phillips plant processes some 27% of the gas compressed. The Panhandle Eastern plant only operates a few days each year during the winter and separates liquid from only and extremely small amount of gas going through Sneed annually.

The full stream going through the Sneed Station is later processed by Panhandle Eastern at Liberal, Kansas. Between the Sneed and Liberal, Panhandle Eastern makes sales to some 35 farm tap, distributor, and small industrial customers, and numerous irrigation customers. Your attached exhibits reveal that the Sneed Station is the first of some 15 compressor stations along Panhandle Eastern's main line. You state that both the Phillips plant near the Sneed Station and the Panhandle Eastern plant at Liberal are operated in order to extract liquid hydrocarbons for sale, and not for the purpose of purifying gas in order to make it marketable.

In general, the gathering process terminates when the gas is in a condition suitable for delivery to customers. Also, the determination may turn on the use of the facilities involved. The fact that sales are made prior to final processing at Liberal, Kansas, suggests that the gas passing through the Sneed Station is suitable for such delivery. Further, from your letter, it appears that the only thing distinguishing the Sneed Station from other stations along the main line is that the Sneed Station is the first. This suggests that its primary function is to facilitate the transportation of gas, rather than its gathering. This is corroborated by the fact that twenty booster compressors are situated upstream from Sneed to regulate gathering pressure. Sneed, on the other hand, regulates the higher main line pressure downstream. From the facts as you have presented them, I conclude on this basis that the Sneed Compressor Station is subject to our jurisdiction under the Natural Gas Pipeline Safety Act of 1968 and the applicable regulations in 49 CFR Part 192.

You also urge in your letter that since the Sneed Station is considered "transportation" for purposes of Federal Energy Regulatory Commission jurisdiction under the Natural Gas Act, DOT should treat it as "transportation" for purposes of the Pipeline Safety Act. In view of the conclusion that it is jurisdictional for other reasons, it is not necessary to reach this determination. I would note, however, that that fact would at the very least be persuasive in reaching the same conclusion.

I trust that this has answered your inquiry. If we can be of further assistance in this matter, please let us know.

Sincerely,

Melvin A. Judah

Acting Associate Director for

Pipeline Safety Regulation

Materials Transportation Bureau

Regulation Sections