CIGGS: RCA won’t grant private-carriage

Nicolai Creek to remain shut-in: commission says problem will be solved by resolution of Cook Inlet Gas Gathering System status

Kristen Nelson

Petroleum News Editor-in-Chief

The Regulatory Commission of Alaska has denied a motion for a declaratory order for limited, private-carriage access to the Cook Inlet Gas Gathering System. The commission is in the midst of determining if it should regulate CIGGS as a common carrier pipeline or as a utility, in response to a complaint filed by Agrium U.S. against CIGGS owners Marathon Oil and Unocal.

CIGGS moves natural gas from the west side of Cook Inlet to the east side.

Enstar Natural Gas, Aurora Gas, Aurora Power Resources and the state of Alaska are also parties to the proceeding.

In mid-February, Aurora, Marathon and Unocal asked the commission for “a declaratory order regarding limited private-carriage access to CIGGS.”

Aurora purchased the Nicolai Creek field on the west side of Cook Inlet in 2000 from Marathon and Unocal. The Nicolai Creek field is connected to the CIGGS system. Aurora has asked the CIGGS owners to provide “privately negotiated contract carriage” so that it can move its gas from the field, which is currently shut-in.

“We shut the field in because CIGGS is not yet a common carrier or even a contract carrier,” Aurora President Scott Pfoff told Petroleum News in March.

The commission said April 4 the CIGGS owners are willing to provide limited, private-carriage access to CIGGS, but only if they are assured, in advance, that such contract carriage would not be considered common carriage subject to the Alaska Pipeline Act and would not subject the companies or their facilities to the jurisdiction of the commission under the Alaska Pipeline Act or the Utilities Act.

Marathon and Unocal sought this assurance in the form of a declaratory ruling from the RCA.

Enstar did not oppose the motion; Agrium did.

The commission said April 4 that it is now attempting to determine whether CIGGS can be regulated, and has established an adjudication schedule that will resolve the issue by November.

“We are not persuaded that it would be a useful expenditure of resources to consider this issue while we are in the middle of an aggressive schedule on the central issue of whether CIGGS is a pipeline carrier or a utility.”

The commission said the motion for a declaratory order “does not address or advance resolution of the central issue” in its current investigation in this docket, therefore: “we decline to address the merits of the motion at this time.”

The commission said that while it is “sensitive to the economic benefits of moving gas from the west side of Cook Inlet to markets on the east side” and understands “Aurora’s predicament,” it believes “that predicament is best addressed by ruling on the central issue in the docket.”