ONEOK Partners contests third regulator for Kansas plant
BY ROD WALTON World Staff Writer
Tuesday, December 04, 2012
12/04/12 at 4:11 AM
ONEOK Partners LP asked a court Monday to stop pipeline regulators from inspecting its natural gas liquids fractionation plant in Bushton, Kan., until a federal agency's jurisdictional limits are determined.
The Tulsa-based natural gas and NGL company is seeking a temporary restraining order in U.S. District Court in Tulsa. ONEOK Partners is at odds with the Pipeline and Hazardous Materials Safety Administration over its role in overseeing the Bushton plan, associated storage and in-plant piping systems.
"Although PHMSA has jurisdiction over our pipeline systems into and out of the plant, the Bushton NGL fractionation plant is regulated by the Occupational Safety and Health Administration and the Environmental Protection Agency," Pierce H. Norton, chief operating officer of ONEOK Partners, said in a statement announcing the federal court filing.
"We believe PHMSA is outside its jurisdictional authority by inspecting and attempting to impose different regulations on the assets and operating procedures currently regulated by OSHA and the EPA," he said. "We believe that having different rules within the same plant could result in misinterpretation and confusion."
The disagreement between ONEOK Partners and the pipeline oversight agency has been building for more than a year. On Aug. 4, 2011, ONEOK Partners officials met with federal regulators in Kansas City, Mo., to try to clarify rules for moving NGLs through refining facilities, storage and in-plant piping systems.
Wes Christensen, senior vice president for subsidiary ONEOK NGL Pipeline LP, wrote to John Gale, director of the U.S. Department of Transportation's Standards and Rulemaking Division, about the issue two weeks later. The pipeline agency is part of the DOT.
Christensen contended that ONEOK Partners had followed a consistent plan of federal oversight with its other facilities. His letter also cited a discussion with West Virginia regulators about jurisdictional boundaries related to another company's facility in that state.
"It is our understanding from that discussion that ONEOK's position on the boundary between in-plant pipeline and pipelines is consistent with West Virginia's inspection practices," Christensen wrote. "It was only recently that ONEOK has experienced a different inspection perspective, which we believe is inconsistent with the regulations, guidance and interpretation documents and the inspection practices in other regions."
Gale responded six months later, in February 2012, noting that shippers could divert NGLs via the pipeline and bypass the Bushton plant altogether without processing the liquids.
"Consequently, only the piping and equipment used to facilitate the fractionation process meets the "in-plant piping" definition," Gale wrote. "Some of the products received at the Bushton plant are stored underground and placed back into the pipeline system without processing."
Original Print Headline: ONEOK Partners asks court for oversight relief
Rod Walton 918-581-8457