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FERC Order Allows Tying of Capacity at Open Access Terminals to Release of Related Pipeline Capacity

FERC yesterday issued an order on rehearing regarding its final rule governing the release of firm capacity by shippers using interstate natural gas pipelines and open access LNG terminals. The Commission generally reaffirmed its decision to remove the maximum rate cap on short-term capacity releases and exempt certain releases from bidding. The order also clarified that capacity released at open access LNG terminals can be tied to the release of capacity on downstream pipelines. FERC declined to extend this opportunity to LNG terminals that are not open access, expressing concern that the agency lacks knowledge on how such arrangements would be structured and therefore would not be able to ensure transparency. Platts LNG Daily [subscription required] provides additional coverage. The order, as well as Chairman Joseph T. Kelliher's statement on the decision, is available in FERC's eLibrary under Docket No. RM08-2.

Full post as published by LNG Law Blog on November 21, 2008 (boomark / email).