{"operation":"document","citation":"PI-20-0003","title":"Counsel for Markwest — Pipeline Safety Interpretation","source_type":"guidance","agency":"Pipeline and Hazardous Materials Safety Administration","status":"guidance","official":true,"published_on":"2020-04-07","effective_on":null,"summary":"PI-20-0003 response to Counsel for Markwest concerning 192.3.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-20-0003.json","markdown":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-20-0003.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-20-0003","source_url":"https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/standards-rulemaking/pipeline/interpretations/73611/markwest2-pi-20-0003-04-07-2020-part-192-3.pdf","body":"<<<PAGE 1>>>\n\nU.S. Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety Administration\n1200 New Jersey Avenue, SE\nWashington, DC 20590\nApril 7, 2020\nMr. Keith J. Coyle\nBabst, Calland, Clements and Zomnir, P.C.\nCounsel for MarkWest\n505 9th Street, NW, Suite 700\nWashington, DC 20004\nDear Mr. Coyle:\nIn a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), dated\nDecember 13, 2019, you provided supplemental information related to eight pipelines that\ntransport off-gas from refineries to a natural gas processing plant (Javelin processing plant)\nlocated in Corpus Christi, Texas (MarkWest Javelin RG pipeline system). You provided the\nsupplemental information in support of MarkWest’s request that PHMSA reconsider a letter of\ninterpretation dated October 15, 2019 (Interpretation), which stated that the eight pipelines at\nissue are transmission pipelines under Part 192. PHMSA’s Interpretation was issued in response\nto MarkWest’s request for interpretation dated October 10, 2016.\nYou stated MarkWest is requesting that PHMSA reconsider its Interpretation for the following\nreasons: (1) PHMSA has previously found that pipelines transporting gas from non-traditional\nsources of production can qualify as gathering lines under Part 192; and (2) PHMSA should\nclarify whether a gas processing plant that extracts natural gas liquids and removes other\nimpurities to create pipeline quality gas should be treated as a large volume customer for\npurposes of the transmission line definition.\nWith regard to the first item, you stated that while the definition of onshore gas gathering line in\nPart 192 is typically applied to traditional oil and gas operations, PHMSA has acknowledged in\nprior interpretations that the definition applies to landfill gas systems. Therefore, you suggested\nthat PHMSA should apply those same principles in determining whether a pipeline that\ntransports off-gas from a refinery to a processing plant is an onshore gathering line. You\nrequested PHMSA agree that the MarkWest Javelin RG pipeline system are onshore gas\ngathering lines.\nConventional natural gas is produced by a well drilled into a geologic formation in which the\nreservoir characteristics permit the natural gas to readily flow to the wellbore. Although landfill\ngas is produced by means that do not meet the criteria for conventional production, the gas is still\nproduced from the landfill ground and the production of gas from a landfill is clearly a gathering\nprocess. MarkWest’s system processes gas downstream from a Part 195 regulated pipeline in\nThe Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR\nParts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts\npresented by the person requesting the clarification. Interpretations are not generally applicable, do not create legally-enforceable rights or\nobligations, and are provided to help the specific requestor understand how to comply with the regulations.\n\n<<<PAGE 2>>>\n\n2\nrefineries and then transports the off-gas downstream from the refineries through the MarkWest\nJavelin RG pipeline system to the Javelin processing plant in Corpus Christi, Texas. The gas\ndoes not originate from a gas or oil production facility and no gathering of gas is performed with\nthe pipelines between the refineries and the processing plant. Therefore, PHMSA does not find\nthe pipelines meet the § 192.3 definition of gathering line.\nYour second question is whether a gas processing plant that extracts natural gas liquids and\nremoves other impurities to create pipeline quality gas should be treated as a large volume\ncustomer for purposes of the transmission line definition. The refineries receive crude oil from\nupstream Part 195 regulated pipelines. Refined products exiting (downstream) the refineries are\nalso transported by Part 195 regulated pipelines. In this case, the refineries send the off-gas\nthrough pipelines to a downstream facility. The gas processing plant produces approximately\n28,000 bbl/day of liquid hydrocarbons and 32 mmscfd of hydrogen. Also, the gas processing\nplant uses the off-gas as chemical and plastic feedstocks and sends residue gas back to the\nrefineries. Per definitions under § 192.3, the pipelines from the refineries to the processing plant\nare neither gathering lines nor distribution lines. Therefore, PHMSA disagrees with Markwest’s\nassertion that the Corpus Christi processing plant cannot be considered a large volume customer\nfor purposes of the transmission line definition in § 192.3. Similarly, PHMSA does not agree\nthat such a finding will implicate other midstream processing plants that do not receive gas from\na refinery as opposed to a production facility (conventional or otherwise). Since the pipelines do\nnot meet the definition of a gathering line, are not downstream from a gas distribution system\nand serve a single processing plant (large volume customer1), the pipelines meet the § 192.3\ndefinition of a transmission line.\nIn conclusion, after examining your latest request, PHMSA has determined that its October 15,\n2019, response to MarkWest’s original request is correct. That is, the pipelines from the\nrefineries to the processing plant (the MarkWest Javelin RG pipeline system) are transmission\nlines as well as any pipelines from the processing plant to the refineries.\nIf we can be of further assistance, please contact Tewabe Asebe at 202-366-5523.\nSincerely,\nJohn A. Gale\nDirector, Office of Standards\nand Rulemaking\n1 NOTE: A large volume customer may receive similar volumes of gas as a distribution center, and includes\nfactories, power plants, and institutional users of gas.\nThe Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR\nParts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts\npresented by the person requesting the clarification. Interpretations are not generally applicable, do not create legally-enforceable rights or\nobligations, and are provided to help the specific requestor understand how to comply with the regulations.\n\n<<<PAGE 3>>>\n\nBabst Calland\nAttorneys at Law\nDecember 13, 2019\nJohn A. Gale\nDirector, Office of Standards and Rulemaking\nOffice of Pipeline Safety (PHP-30)\nPipeline and Hazardous Materials Safety Administration\nU.S. Department of Transportation\n1200 New Jersey Avenue, S.E.\nWashington, DC 20590-0001\nRe: Supplemental Request for Written Regulatory Interpretation\nDear Mr. Gale:\nBy letter dated October 15, 2019, the Office of Pipeline Safety (OPS) responded to a\nrequest for written regulatory interpretation from the MarkWest Javelina Pipeline Company,\nL.L.C. (MarkWest). 1 In that response, OPS addressed whether several pipelines that transport off-\ngas from refineries to a natural gas processing plant in Corpus Christi, Texas, should be classified\nas gathering or transmission lines under 49 C.F.R. Part 192. OPS ultimately concluded that the\npipelines did not meet the general definition of a gathering line and should be classified as\ntransmission lines transporting gas to a large volume customer that is not downstream from a\ndistribution center.\nMarkWest is respectfully requesting that OPS reconsider its response for the following\nreasons. OPS has previously found that pipelines transpo1iing gas from non-traditional sources of\nproduction can qualify as gathering lines under Part 192. OPS should apply that principle in this\ncase and conclude that the pipelines that transport off-gas from the refineries to the processing\nplant are gathering lines. MarkWest is also asking OPS to clarify whether a gas processing plant\nthat extracts natural gas liquids (NGLs) and removes other impurities to create pipeline quality gas\nshould be treated as a large volume customer for purposes of the transmission line definition. That\nposition appears to conflict with the definition of onshore gas gathering in Part 192 and could\nrequire the re-classification of midstream pipeline systems throughout the United States without\nfiniher clarification.\nBackground\nIn an October 10, 2016 request for a written regulatory interpretation, MarkWest asked\nOPS whether eight pipelines in Corpus Christi, Texas, could be classified as onshore gas gathering\nlines under Part 192. Mark West explained that the pipelines transport off-gas produced by process\nunits at six local refineries to a nearby processing plant for extraction ofNGLs and other impurities\nto create pipeline quality gas. The processed gas is then returned to the refineries in other pipelines\n1 49 C.F.R. § 190. l l(b) (2018) (authorizing OPS to respond to requests for written regulatory interpretations).\n\n<<<PAGE 4>>>\n\nfor local use. MarkWest finiher explained that the maximum allowable operating pressure\n(MAOP) of the off-gas pipelines produces a hoop stress of less than 20 percent of specified\nminimum yield strength (SMYS) of the pipe. Citing these facts, Mark West asked OPS to agree\nthat the off-gas pipelines did not meet the definition of a transmission line and should be classified\nas Type B regulated onshore gas gathering lines under Paii 192.2\nOPS responded to MmkWest's request for interpretation in an October 15, 2019 letter.\nAfter describing the basic characteristics of the pipelines, OPS observed that \"[g]as gathering\npipelines ... are defined [in 49 C.F.R. § 192.3] as pipelines that transport gas from a production\nfacility to a transmission line or main[,]\" and that \"[g]enerally, gathering pipelines collect gas from\nnatural gas wells and transport them to a processing facility, refinery or a transmission pipeline.\"3\nOPS then stated without further explanation that \"[t]ranspo1iing off-gas from refineries does not\nqualify the pipelines in question as gathering pipelines. \"4\nHaving made that threshold determination, OPS turned to the definition of a transmission\nline in 49 C.F.R. § 192.3 and stated that the processing plant was \"a lai·ge volume customer because\nit is a manufacturing facility that processes refinery off-gas, and with all six refineries on line, ...\ncan process up to 142 mmscfd of off-gas[.]\"5 OPS also stated that the processing plant \"uses this\noff-gas as chemical and plastic feedstocks and sends residue gas back to the refineries.\"6\nTherefore, OPS concluded that the eight pipelines were transmission lines that \"[t]ransp01i[] gas\nfrom a gathering line ... to a ... large volume customer that is not down-stream from a distribution\ncenter[.]\"7\nOn November 19, 2019, MITTkWest met with OPS at the Pipeline and Hazai·dous Materials\nSafety Administration's (PHMSA) headquaiiers in Washington, D.C., to discuss the response to\nthe interpretation request. Mai·kWest provided additional information about the pipelines and gas\nprocessing plant and expressed concern with certain aspects of OPS's letter. OPS agreed that\nMai·kWest could describe those concerns in greater detail in a supplemental request for\ninterpretation.\nMarkWest appreciates OPS's willingness to reconsider its response and is providing\nadditional information and supporting analysis below.\nAnalysis\nPart 192 uses a multi-step framework for dete1mining whether a pipeline is an onshore gas\ngathering line.8 A gathering line is generally defined in 49 C.F.R. § 192.3 as a \"pipeline that\n2 The off-gas pipelines range in length from 0.2 to 1.54 miles. The lines traverse a Class 3 location and have an\nMAOP of99 psig, which produces a hoop stress ranging from 9% to 14% of the SMYS of the pipe.\n3 PHMSA Letter of Interpretation to Ms. Leanne M. Meyer, MarkWest Javelina Pipeline Co. at 1, PI-16-0013 (Oct.\n15, 2019).\n4 Id.\n5 Id. at 2.\n6 Id.\n7 Id. at 1 (quoting 49 C.F.R. § 192.3 (definition of transmission line)).\n8 49 C.F.R. §§ 192.3, 192.7(b)(4), and 192.8(a).\n2\n\n<<<PAGE 5>>>\n\ntransp01is gas from a cunent production facility to a transmission line or main.\n\"9 Onshore\ngathering line is further defined in 49 C.F.R. § 192.8(b) based on the provisions in API\nRecommended Practice 80, \"Guidelines for the Definition of Onshore Gas Gathering Lines,\" 1st\nedition, April 2000, (RP 80), an industry standard incorporated by reference into Paii 192, subject\nto ce1iain additional limitations. 10\nRP 80 defines an onshore gas gathering line as \"any pipeline or pali of a connected series\nof pipelines\" that \"transp01i[ s] gas from the furthermost downstream point in a production\noperation\" to ce11ain locations. 11 One of those locations is \"the inlet of the furthe1most downstream\nnatural gas processing plant, other than a natural gas processing plant located on a transmission\nline.\n\"12 Pali 192 prescribes additional limitations on RP 80's definition of an onshore gas gathering\nline.\n13 One of those limitations states that \"[t]he endpoint of gathering .. . may not extend beyond\nthe first downstream natural gas processing plant, unless the operator can demonstrate, using sound\nengineering principles, that gathering extends to a fuiiher downstream plant.\"14\nWhile the definition of onshore gas gathering line in Pali 192 is typically applied to\ntraditional oil and gas operations, OPS has acknowledged in prior interpretations that the definition\napplies to non-traditional sources of gas production as well. In a March 2011 interpretation letter\nto the City of Glendale Water & Power (GWP), for example, OPS found that paii of a pipeline\ntranspoliing gas produced at a landfill was an onshore gathering line under Paii 192.\n15\nSpecifically, OPS found that several suction lines transpo1iing gas from extraction wells to a\ncompressor station located inside the boundaries of the landfill were onshore gas gathering lines. 16\nOPS took the same approach in applying the onshore gathering line definition to a landfill\ngas system in an August 2011 interpretation letter to the City of LaGrange, Georgia (LaGrange ). 17\nAfter receiving an interpretation a yeai· earlier concluding that a pipeline delivering landfill gas\nfrom a compressor to a nearby power plant was a transmission line, 18 LaGrange asked OPS in a\nfollow-up request to clai·ify whether the suction lines upstream of the compressor were pali of an\nunregulated production facility. Citing the interpretation to GWP, OPS found that the suction lines\nwere onshore gas gathering lines under Part 192 and RP 80. 19\n9 Id.§ 192.3.\n10 Id. § l 92.8(a).\n11 RP 80 § 2.2(a);\n1 2 Id. § 2.2(a)(l)(A).\n1 3 49 C.F.R. § 192.8(a)(2)-(4).\n14 Id. § 192.8(a)(2); PHMSA Letter of Interpretation to Mr. Dan Green, Pacific Energy and Mining Co., PI-18-0015\n(Aug. 15, 2019); PHMSA Letter oflnterpretation to Mr. Greg Schrab, CDX Gas, PI-09-0002 (July 14, 2009).\n1 5 PHMSA Letter of Interpretation to Mr. Steven G. Lins, City of Glendale Water & Power, PI-10-0016 (Mar. 8,\n2011).\n16 OPS found in the interpretation that the landfill gas gathering lines were not regulated due to an exemption in 49\nC.F.R. § 192.l(b)(4)(i) that applies to onshore gas gathering in pipelines that operate at less than O psig, and that the\npipeline delivering gas from the outlet of the landfill gas compressor station to a nearby power plant was a regulated\ntransmission line transporting gas to a large volume customer that was not downstream from the distribution center\nunder 49 C.F.R. § 192.3.\n1 7 PHMSA Letter of Interpretation to Mr. Patrick Bowie, City of LaGrange, PI-10-0014 (Aug. 11, 2011).\n18 PHMSA Letter of Interpretation to Mr. Patrick Bowie, City of LaGrange, PI-10-0007 (Aug. 10, 2010).\n19 As in the interpretation to GWP, OPS found that the landfill gas gathering lines were not regulated because of the\nexemption in 49 C.F.R. § 192.1 (b )( 4 )(i) for onshore gas gathering in pipelines that operate at less than O psig.\n3\n\n<<<PAGE 6>>>\n\nAs these two recent interpretations involving landfill gas systems show, OPS has\nacknowledged that PHMSA's definition of onshore gas gathering line applies in cases that do not\ninvolve traditional oil and gas production. The general definition of a gathering line in 49 C.F.R.\n§ 192.3 does not clearly indicate that landfill gas extraction wells should qualify as production\nfacility. Nor does RP 80 include any explicit references to gas produced at landfills in describing\nthe kinds of activities that qualify as production operations. Nonetheless, OPS established the\nbasic principle that landfill gas wells can be paii of a production facility or production operation\nin the GWP and LaGrange interpretations, and that pipelines transporting landfill gas can be\nonshore gathering lines. That conclusion is consistent with the functional approach that Paii 192\nai1d RP 80 use in determining the classification of gas pipeline facilities.\nOPS should apply those same principles in determining whether a pipeline that transpmis\noff-gas from a refinery to a processing plant is an onshore gathering line. Like a landfill gas\nsystem, the refinery process units produce gas from a source other than a traditional oil and gas\nwell. OPS can rely on the principles laid out in the GWP and LaGrange interpretations to conclude\nthat the refinery process units are paii of a production facility or production operation under 49\nC.F.R. §§ 192.3 and 192.8(a) and RP 80. The pipelines that transpo1i the refinery off-gas to the\nprocessing plant also fall squai·ely within the definition of an onshore gathering line. The inlet of\nthe first downstream natural gas processing plant is a well-established endpoint of onshore gas\ngathering, and the Corpus Christi processing plant is no different than the hundreds of other gas\nprocessing plants that ai·e pait of gathering systems located throughout the United States.\nIndeed, Mai·kWest is particularly concerned by the OPS' s conclusion that the Corpus\nChristi gas processing plant should be treated a large volume customer for purposes of the\ntransmission line definition. That position appeai·s to create a significant conflict with the\ndefinition of onshore gas gathering in PHMSA' s regulations and, if given broad application, would\nrequire the midstream industry to reclassify many gathering lines as transmission lines. Unlike\npower plants, factories, and other institutional users of gas, processing plants do not receive gas\nfor purposes of end use or consumption. Processing plants extract NG Ls and other impurities to\ncreate pipeline quality gas, and that gas is then transpo1ied to an end user (including, in some cases,\nlarge volume customers like power plants, factories, or manufacturing facilities). The pipeline\nindustry has long understood that processing plants performing these kinds of functions are paii\nof gas gathering operations, and that understanding is reinforced by the language in RP 80 and 49\nC.F.R. § 192.8(a).\nFor these reasons, MarkWest is respectfully requesting that OPS agree that the off-gas\npipelines are onshore gas gathering lines. The pipelines transpmt gas from a non-traditional source\nof production (refinery process units) to a processing plant that clearly perfo1ms a gathering\nfunction (extracting NGLs and removing other impurities to create pipeline quality gas). As in the\nlandfill gas context, OPS can apply the definitions in 49 C.F.R. §§ 192.3 and 192.8(a) and RP 80\nto conclude that these pipelines ai·e onshore gathering lines. Mark West also notes that the pipelines\nthat transpmi gas from the processing plant back to the refineries can be properly classified as\nlarge volume customer transmission lines if OPS adopts this interpretation.\n4\n\n<<<PAGE 7>>>\n\nConclusion\nMarkWest appreciates the opportunity to submit this supplemental request to OPS for a\nwritten regulatory interpretation on the classification of the pipelines that transpo1i refinery off-\ngas to the processing plant in Corpus Christi, Texas. If you have any additional questions or\nconcerns, please feel free to contact me at 202-853-3460 or kcoyle@babstcalland.com.\nRespectfully Submitted,\nC-----_\ne\nBabst, alland, Clements & Zomnir, P.C.\n505 9th St. NW, Suite 700\nWashington DC, 20004\n(202) 853-3460\nkcoyle@babstcalland.com\nCounsel for MarkWest\n5","truncated":false,"body_characters":20227}