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NEWS BULLETIN

November 08, 2011 --- Vol. 17, No. 97November 2011

RCA approves new Beluga pipeline tariff

The Regulatory Commission of Alaska has accepted a settlement agreement for a new tariff for the Beluga pipeline.html'>gas pipeline on the west side of Alaska’s Cook Inlet. The pipeline is a key link in the pipeline network that carries gas from Cook Inlet gas fields, with the tariff on the line being of great importance in determining how gas producers and utilities transport gas to market.

In December 2010 Beluga Pipe Line Co., a subsidiary of Marathon Oil Co., proposed a radical new pipeline tariff involving fees to book capacity on the line rather than charging shippers for the volumes of gas actually transported. The company said that the line was not viable under traditional throughput based tariffs because shippers were only using the line during periods of peak utility gas demand.

Cook Inlet gas shippers expressed concern the that new tariff could lock them into pipeline capacity reservation fees in excess of their actual needs, and all stakeholders in the tariff issue entered into negotiations seeking an acceptable tariff arrangement. The resultant settlement agreement, which RCA has now approved, retains the principal of shippers paying to reserve pipeline capacity but includes terms that accommodate some use of unreserved capacity and that allow some flexibility in how the reserved capacity is used.

—Alan Bailey

See full story in Nov. 13 issue, available online at 11 a.m., Friday, Nov. 11 at www.PetroleumNews.com

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