|
 This marks the first time the Federal Energy Regulatory Commission
(FERC) has used its emergency authority under the Interstate
Commerce Act.
The commission said on Friday it is its powers to order Enterprise
Energy Partners to allocate "available capacity" on its TE Products
pipeline for propane shipments.
The pipeline runs from Mont Belvieu, in the Gulf Coast and the
country's largest propane storage hub, to the Northeast and parts of
Midwest.
"Compliance with this directive shall begin immediately and remain
in place for seven days from the date of this order pending further
review and order of the commission," it said in its filing.
It referred to reports given by the Department of Homeland Security,
governors, senators and lawmakers on the impact of a shortage of the
heating fuel, including rationing, closed schools and farmers in
danger of loosing their animal stock.
The FERC's notice came after the National Propane Gas Association
requested on Thursday that the regulator order Enterprise to suspend
shipments of diluent and instead supply 75,000 barrels per day (bpd)
of propane along the pipeline.
And it was issued shortly after U.S. senators urged the White House
to direct government agencies to help consumers facing shortages and
price spikes.
Enterprise did not reply to requests for comments. It said
previously that batches of propane along the TE Products line had
been prioritized, allowing them to get to the Northeast sooner.
Benchmark propane prices have fallen this week from historic highs
last month and inventories inched up last week in some regions, but
suppliers fear they remain too low to handle another onslaught of
brutally cold weather.
Midwestern and Northeastern states have been pummeled by snowstorms
and record-breaking cold weather stemming from a shifting arctic
cold front, in stark contrast to last year's relatively mild winter.
Jeff Petrash, General Counsel at the NPGA, said its request to the
FERC was aimed at taking the pressure off supplies at the second-largest propane hub, in Conway, Kansas, from where much of the
Midwestern and Northeastern supplies come.
"Everyone here and among our members remain concerned about the
inventories' levels. We are concerned should there be another polar
vortex and what that would mean," Petrash said by telephone.
[to top of second column] |
PIPELINES TWEAKED
Propane inventories in the Midwest, reflecting stocks at the Conway
hub, rose by 770,000 barrels to 9.6 million barrels last week, but
are 44 percent lower than their levels this time a year ago and have
almost halved since the start of winter in November.
Several pipeline companies are making adjustments to their routes to
help ease the distribution of the heating fuel.
As of Friday, Kinder Morgan Inc added two delivery points in Indiana
and Michigan along its 50,000 bpd Cochin line, which can take
additional supplies of propane from a connecting pipeline called the
North System, operated ONEOK Inc.
Both pipelines supply the upper Midwestern states.
The addition of two destination points to get propane from ONEOK's
system, "provides shippers access to an additional propane supply
source in the Midwest," it said in its filing with the FERC.
ONEOK is also tweaking its supply routes. It told shippers via the
FERC that it would reverse a small portion of the North System
called North Line No. 5 to help supplies reach the storage hub in
Conway.
The notice, filed last week, was effective as of Thursday, although
ONEOK did not reply to emails seeking confirmation of the reversal.
Propane prices at the Conway hub jumped to as high as $5 a gallon
during a two-week period last month from around $1.75. They rose
about 15 cents on Friday to $1.90.
While expectations for more cold weather and the need to replenish
the area's supply chain were supporting prices on Friday, brokers
and traders said a sharp price jump by U.S. crude futures also
helped push up propane.
At the Mont Belvieu hub, spot propane was traded at $1.66 a gallon
late, up about 10 cents.
(Additional reporting by Robert Gibbons in New York and Ayesha
Rascoe and Ros Krasny in Washington; editing by Amanda Kwan and
Andre Grenon)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
