TETCO Pipeline Gas Quality & Interchangeability Restrictions Effective April 1

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Texas Eastern Transmission, LP (Texas Eastern), a wholly owned subsidiary of Spectra Energy Transmission, LLC, owns and operates an interstate natural gas transmission pipeline that connects the Gulf of Mexico with several large metropolitan areas in the northeastern United States. The pipeline is commonly known as the "TETCO Pipeline," which consists of 8,700 miles of pipeline, and traverses twelve different states, including Kentucky, Ohio, and Pennsylvania.

On October 2, 2009, Texas Eastern filed tariff sheets with the United States Federal Energy Regulatory Commission (FERC), pursuant to Section 4 of the Natural Gas Act, to revise its tariff with respect to gas quality and interchangeability issues (Tariff Filing). Examples of the new limits in Texas Eastern's Tariff Filing include limits on: (i) ethanes and heavier hydrocarbons (C2+), (ii) combined carbon dioxide and nitrogen, (iii) carbon dioxide, and (iv) Wobbe number and higher heating value. Texas Eastern cited three primary reasons for its Tariff Filing: (i) increased volume of regasified, liquefied natural gas from the Rocky Mountains through the Eastern portion of the Rockies Express Pipeline, (ii) the exploration and development of coalbed methane, and (iii) production from the Marcellus shale.
 
Subsequent to Texas Eastern's Tariff Filing, numerous interested parties moved FERC for permission to intervene. In October 2009, FERC accepted and suspended Texas Eastern's proposed tariffs, and established a technical conference date. As a result of the technical conference, Texas Eastern submitted a list of contested issues agreed to by all parties in December 2009.
On March 1, 2010, Texas Eastern filed a motion with FERC to make its suspended tariff sheets effective on April 1, 2010. Texas Eastern noted in its motion that it intends to issue a limited waiver for receipt points for a period of six months, provided that the commingled gas stream will meet the gas quality specifications at delivery points.

On March 18, 2010, FERC issued an order requiring a public hearing on the lawfulness of Texas Eastern's Tariff Filing. FERC also ruled that it had no authority to further suspend or delay the tariff sheets; therefore, the new limits in the Tariff Filing will go into effect on April 1, 2010. The order specifically found the six-month waiver to be just and reasonable, as it provides shippers with time and flexibility to make the transition to the new standards that will become effective on April 1, 2010.


Click here for a summary of Texas Eastern's current and proposed gas quality and interchangeability limits.

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