FERC okays sale of Shoshone Pipeline in Montana and Wyoming

The Federal Energy Regulatory Commission on May 14 approved a December 2014 application from Black Hills Shoshone Pipeline LLC and Energy West Development Inc. related to the sale of an existing pipeline in Montana and Wyoming.

The companies had requested: Natural Gas Act (NGA) section 7(b) authorization for Energy West to abandon by sale the Shoshone Pipeline, an approximately 30-mile-long, six-inch-diameter pipeline system located in Montana and Wyoming; a certificate of public convenience and necessity under NGA section 7(c) and the commission’s regulations authorizing Black Hills to acquire and operate the Shoshone Pipeline and to provide service at the same rates, terms, and conditions currently applicable to service under Energy West’s tariff; a blanket certificate under the commission’s regulations for Black Hills to perform certain routine construction, operation and abandonment activities; and a blanket certificate under the commission’s regulations authorizing Black Hills to provide open access firm and interruptible transportation services.

Energy West, a subsidiary of Energy West Inc., which is a subsidiary of Gas Natural Inc., owns and operates the Shoshone Pipeline, an interstate natural gas pipeline subject to the commission’s NGA jurisdiction, and Glacier Pipeline, a non-jurisdictional gathering pipeline system.

Black Hills is a subsidiary of Cheyenne Light, Fuel and Power, which is a subsidiary of Black Hills Corp.

The Shoshone Pipeline runs bi-directionally between an interconnection with Energy West Wyoming at Cody, Wyoming, and an interconnection with Northwestern Energy Inc.’s intrastate pipeline near Warren, Montana. It serves one shipper, Energy West Resources Inc., an affiliate of Energy West, and has the capacity to provide approximately 13,500 MMBtu per day of transportation service.

The Shoshone Pipeline was constructed in 1960 to transport non-jurisdictional liquids. In 2000, an affiliate of Energy West purchased it from Montana Power and transferred it to Energy West. In 2003, the Commission authorized Energy West to convert and operate the Shoshone Pipeline to transport natural gas in interstate commerce and provide open access firm and interruptible transportation services.

In October 2014, Energy West executed an asset purchase agreement to sell the Shoshone Pipeline and certain other assets, including the Glacier Pipeline gathering system, to Black Hills Exploration and Production Inc. (Black Hills E&P). Energy West will convey the facilities to Black Hills E&P, which will immediately convey them to Black Hills. Black Hills will own 100% of the Shoshone Pipeline and operate it as a natural gas pipeline, providing the same NGA-jurisdictional transportation services currently offered by Energy West, under the same rates, terms and conditions of service.

Said the May 14 FERC approval: “Energy West is granted permission and approval under NGA section 7(b) to abandon by sale to Black Hills the facilities described in this order and in the application.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.