FERC Won't Budge on Claim for Unocal's Jupiter Offshore Facilities

FERC on rehearing has affirmed its earlier determination that the offshore natural gas pipeline facilities owned and operated by Unocal's Jupiter Energy Corp. are transmission in nature, not gathering, and thus are subject to agency jurisdiction.

Jupiter Energy challenged a June 28 order in which FERC, acting on remand from the U.S. Court of Appeals for the Fifth Circuit, upheld a 2003 decision that declared Jupiter's pipeline facilities to be jurisdictional transmission (see Daily GPI, June 30). This marks the third time that Jupiter has sought rehearing at FERC on whether its pipe facilities are gathering or transmission.

Jupiter's gas pipeline facilities extend from offshore Texas to a sub-sea interconnect with Transcontinental Gas Pipe Line and a shoreline interconnect with Tennessee Gas Pipeline.

The court saw problems with FERC's 2003 Jupiter ruling and sent the case back to the Commission. The court agreed with the Unocal pipeline's argument that the agency's finding of jurisdictional transmission for Jupiter was flawed in light of the fact that FERC had previously ruled that a pipeline upstream of Jupiter's facilities (Transco) was gathering and not subject to FERC's jurisdiction.

Last April, the Commission corrected that "inconsistency" by finding that Transco's offshore and onshore facilities in Louisiana were jurisdictional transmission instead of gathering (see Daily GPI, April 21) -- a decision that was upheld in June.

Because the "inconsistency identified by the court [with respect to Transco] no longer exists, the Commission affirms its jurisdictional determination" for the Jupiter facilities, FERC said at the time.

In rejecting Jupiter's latest bid for rehearing, the FERC order said "all issues raised in Jupiter's latest request for rehearing have already been addressed by the Commission in its previous orders" in the case [CP03-11]. Given that the review process has now been completed at the Commission, Jupiter could seek court review of the agency's ruling.

FERC Commissioner Nora Brownell dissented from the majority on this decision. "I believe nearly all of the physical and non-physical characteristics of Jupiter's facilities are indicative of a gathering function," she wrote.

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