168 FERC ¶ 61,180 UNITED STATES of AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Neil Chatterjee, Chairma
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168 FERC ¶ 61,180 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Neil Chatterjee, Chairman; Richard Glick and Bernard L. McNamee. Cheyenne Connector, LLC Docket Nos. CP18-102-000 Rockies Express Pipeline LLC CP18-103-000 ORDER ISSUING CERTIFICATES (Issued September 20, 2019) On March 5, 2018, Cheyenne Connector, LLC (Cheyenne Connector) filed an application in Docket No. CP18-102-000, pursuant to section 7(c) of the Natural Gas Act (NGA)1 and Part 157 of the Commission’s regulations,2 for authorization to construct and operate approximately 70 miles of new interstate pipeline and related facilities in Weld County, Colorado (Cheyenne Connector Pipeline Project). The proposed pipeline is designed to provide up to 600,000 dekatherms per day (Dth/d) of firm transportation service from natural gas processing plants to a delivery interconnect with Rockies Express Pipeline LLC (Rockies Express) at the Cheyenne Hub, all within Weld County, Colorado. Cheyenne Connector also requests a blanket certificate under Part 284, Subpart G of the Commission’s regulations to provide open-access transportation services, and a blanket certificate under Part 157, Subpart F of the Commission’s regulations to perform certain routine construction activities and operations. On the same day, Rockies Express filed an application in Docket No. CP18-103- 000, pursuant to section 7(c) of the NGA and Part 157 of the Commission’s regulations, for authorization to construct and operate certain compression and ancillary facilities at its existing Cheyenne Compressor Station at the Cheyenne Hub in Weld County, Colorado (Cheyenne Hub Enhancement Project). The Cheyenne Hub Enhancement Project would enable Rockies Express to accommodate, on a firm basis, receipts and 1 15 U.S.C. § 717f(c) (2018). 2 18 C.F.R. pt. 157 (2019). (continued ...) Docket Nos. CP18-102-000 and CP18-103-000 - 2 - deliveries of natural gas between pipelines3 at points where currently service is only available on a non-firm basis. As discussed below, the Commission grants the requested authorizations, subject to conditions. I. Background and Proposals Cheyenne Connector, a Delaware limited liability company with its principal place of business in Kansas, is an indirect wholly-owned subsidiary of Tallgrass Energy Partners, LP4 and does not currently own any pipeline facilities, nor is it engaged in any natural gas transportation operations. Upon commencement of operations proposed in its application, Cheyenne Connector will become a natural gas company within the meaning of section 2(6) of the NGA,5 and will be subject to the jurisdiction of the Commission. Rockies Express,6 an affiliate of Cheyenne Connector, is a Delaware limited liability company with its principal place of business in Kansas and is a natural gas company, as defined by section 2(6) of the NGA, engaged in natural gas transportation services subject to the jurisdiction of the Commission. Rockies Express’s existing transmission system, comprising of over 1,700 miles of 36-inch- and 42-inch-diameter pipeline, associated compression, and laterals of various diameters, provides natural gas 3 The pipelines which interconnect at the Cheyenne Hub are: Rockies Express, Cheyenne Plains Gas Pipeline Company, L.L.C. (Cheyenne Plains); Colorado Interstate Gas Company, L.L.C. (CIG); Tallgrass Interstate Gas Transmission, LLC (Tallgrass); Public Service Company of Colorado (PSCo); Trailblazer Pipeline Company LLC (Trailblazer); and Wyoming Interstate Company, L.L.C. (WIC). The newly constructed Cheyenne Connector Pipeline will also interconnect at the Cheyenne Hub. 4 Cheyenne Connector states that Western Gas Partners, LP, a subsidiary of Anadarko Petroleum Corporation, and DCP Midstream, LP, both have an option to invest in Cheyenne Connector at a later date. If an equity investment in Cheyenne Connector is made, Cheyenne Connector states that it will inform the Commission. Cheyenne Connector’s March 5, 2018 Application at 6, n.4. 5 15 U.S.C. § 717a(6). 6 Rockies Express is owned by three members: TEP REX Holdings, LLC, an indirect wholly-owned subsidiary of Tallgrass Energy Partners, LP, owns 49.99 percent; Rockies Express Holdings, LLC, an indirect wholly-owned subsidiary of Tallgrass Energy GP, LP, owns 25.01 percent; and P66REX LLC, a wholly-owned subsidiary of Phillips 66, owns 25 percent. Docket Nos. CP18-102-000 and CP18-103-000 - 3 - transportation services in Colorado, Wyoming, Nebraska, Kansas, Missouri, Illinois, Indiana, and Ohio. A. Cheyenne Connector Pipeline Project 1. Facilities and Service Cheyenne Connector proposes to construct and operate approximately 70 miles of 36-inch-diameter natural gas pipeline extending north from gas processing plants owned by Anadarko and DCP Midstream in Weld County, Colorado, to an interconnection with Rockies Express located at the Cheyenne Hub, also in Weld County. Cheyenne Connector also proposes to construct and operate the following: • an interconnect and measurement facility located in Section 14, Township 2 North, Range 66 West (Anadarko Lancaster Interconnect Meter Station); • an interconnect and measurement facility located in Section 2, Township 3 North, Range 66 West (Anadarko Latham Interconnect Meter Station); • an interconnect and measurement facility located in Section 2, Township 3 North, Range 66 West (DCP Mewbourn Interconnect Meter Station); • an interconnect and measurement facility and approximately 0.70 miles of 24-inch-diameter pipeline to connect with DCP Midstream’s O’Connor Plant in Section 31, Township 5 North, Range 64 West (DCP O’Connor Interconnect Meter Station and Connecting Pipeline); • a measurement facility and interconnect with Rockies Express at the Cheyenne Hub (Rockies Express Interconnect Meter Station); and • ancillary facilities pursuant to section 2.55 of the Commission’s regulations,7 including three mainline block valve sets and in-line inspection facilities (i.e., pig launching and receiving equipment). The Cheyenne Connector Pipeline Project would provide up to 600,000 Dth/d of firm transportation service from natural gas processing plants in Weld County, Colorado, to a delivery point at Rockies Express’s Cheyenne Hub facilities. From the Cheyenne 7 18 C.F.R. § 2.55(a) (2019). Docket Nos. CP18-102-000 and CP18-103-000 - 4 - Hub, shippers have access to a variety of regional markets via several interconnected pipelines.8 Cheyenne Connector held an open season for the project from September 12, 2017 to September 26, 2017 to solicit interest in the firm transportation service to be created by the Cheyenne Connector Pipeline Project. Cheyenne Connector executed precedent agreements with Anadarko Energy Services Company (Anadarko) and DCP Midstream Marketing, LLC (DCP Midstream). The precedent agreements are each for 300,000 Dth/d of firm transportation service for a primary term of 10 years at a fixed negotiated rate. Cheyenne Connector estimates the total cost of the Cheyenne Connector Pipeline Project to be $213,265,400. Cheyenne Connector requests approval of its proposed pro forma tariff, and proposes to establish initial recourse reservation rates under Rate Schedules FTS (Firm Transportation Service), ITS (Interruptible Transportation Service), PALS (Park and Loan Service), and PAWS (Pooling and Wheeling Service). 2. Blanket Certificates Cheyenne Connector requests a blanket certificate of public convenience and necessity pursuant to section 284.221 of the Commission’s regulations authorizing it to provide transportation service to customers requesting and qualifying for transportation service under its proposed tariff, with pre-granted abandonment authority.9 Cheyenne Connector also requests a blanket certificate of public convenience and necessity pursuant to section 157.204 of the Commission’s regulations authorizing future facility construction, operation, and abandonment as set forth in Part 157, Subpart F of the Commission’s regulations.10 8 From the Cheyenne Hub, Cheyenne Connector states that shippers would have direct or indirect access to the following regional markets: Rocky Mountain (via Trailblazer, Tallgrass, Rockies Express, Cheyenne Plains, PSCo, and CIG), West Coast (via Rockies Express); Midwest (via Trailblazer and Rockies Express); Mid-Continent (via Rockies Express, Cheyenne Plains, Tallgrass, CIG, and Trailblazer); and Gulf Coast (via Rockies Express downstream interconnects). Cheyenne Connector’s March 5, 2018 Application at 10. 9 18 C.F.R. § 284.221 (2019). 10 Id. § 157.204. (continued ...) Docket Nos. CP18-102-000 and CP18-103-000 - 5 - B. Cheyenne Hub Enhancement Project At its existing Cheyenne Compressor Station in Weld County, Colorado, Rockies Express proposes to construct and operate six new 5,350 horsepower (hp) natural gas reciprocating compressor units (32,100 hp total) and ancillary equipment, and to modify the existing CIG and Trailblazer Interconnect Meter Stations to enable bi-directional gas flow through the meters. In addition, pursuant to section 2.55(a) of the Commission’s regulations,11 Rockies Express will also construct and operate certain ancillary facilities, including station piping, compressor and electrical buildings, valves, and gas cooling equipment at the station. The Cheyenne Hub Enhancement Project would enable Rockies Express to accommodate, on a firm basis, receipts and deliveries at points where service is currently only available on a non-firm basis.12 The proposed project will enable Rockies Express to provide up to a total of 1,000,000 Dth/d