REVAMPS DUE IN MIDCONTINENT GAS PIPELINES

Arkla Inc. is seeking permission to change certain ownership and shipping rights on its Midcontinent gas pipelines serving U.S. interstate markets.

Bare bones of the company's plan have emerged in related Federal Energy Regulatory Commission filings.

Among key applications to FERC:

Arkla Energy Resources (AER), Shreveport, La., asked for a permit to lay an 84 mile, 300 MMcfd extension to its 221 mile, 1 bcfd Line AC interstate gas pipeline. Pending FERC application approval, AER plans to start construction of the $96.1 million extension by Feb. 1, 1994, with transportation service to begin Sept. 1, 1994.
Texas Eastern Transmission Corp (Tetco), Houston, a unit of Panhandle Eastern Corp., applied for permission to lease 250 MMcfd of capacity on AER's existing pipeline system and on AER's proposed Line AC extension. Tetco's 10 year capacity lease agreement would anchor AER's Line AC extension.
Arkla and ANR Pipeline Co., Detroit, a unit of Coastal Corp., Houston, is awaiting approval of a revised agreement that would allow ANR to buy interests in Arkla pipeline systems to establish a 250 MMcfd interstate gas transportation corridor out of the Anadarko, Arkoma, and other Midcontinent supply basins.

The new Arkla-ANR agreement replaces a March 1989 agreement which would have allowed Arkla to sell ANR capacity in Line AC and related gathering and transmission facilities worth an estimated $125 million. The restructured agreement would transfer to ANR capacity interests in facilities valued at about $90 million.

LINE AC EXTENSION

Arkla Pres. Dan Dienstbier said ex tending Line AC will strengthen AER's role as an aggregator of Midcontinent gas supplies for expanding markets in the U.S. Midwest and Northeast.

The extension would run east from Line AC's current terminus at Glendale, Ark., to a connection with Trunkline Gas Co. at Trunkline's Shaw, Miss., compressor station. Trunkline is a Panhandle Eastern subsidiary.

The extension also would connect Line AC with Texas Gas Transmission near Cleveland, Miss., and intersect with ANR and with Tennessee Gas Pipeline's 100 Line.

"Upon completing this extension, Arkla will have taken another step toward creating a gas superhighway out of the Midcontinent that will be an economic alternative for markets wishing to diversify a portion of supplies away from the U.S. Gulf Coast," Dienstbier said.

In addition to 250 MMcfd of capacity on Line AC and its extension, Tetco would lease 83 MMcfd of capacity on certain AER gathering facilities. Tetco's application also covers options to extend the lease term to 15 years and leased capacity to 500 MMcfd.

Tetco Pres. George L. Mazanec said the capacity agreement with AER would. allow Tetco and its customers to diversify their supply portfolios with secure access to economically priced Midcontinent gas. He said the cost savings and low environmental effects would benefit everyone involved.

ANR TRANSPORTATION CORRIDOR

The reduced value of facilities in the restructured capacity agreement between Arkla and A&R results mostly from an Arkla decision to retain capacity on certain Line AC gathering facilities originally included.

Under the revised agreement, ANR would receive 100-250 MMcfd of transportation capacity on Arkla's Line AD from Custer county, Okla., to Chandler, Okla., on Line AC from Chandler to Glendale, Ark., and on Mississippi River Transmission from Glendale to Perryville, La.

FERC approved the March 1989 agreement, contingent on certain changes. Arkla and ANR did not concur with some of FERC's required changes and resumed negotiations.

Arkla said the restructured agreement preserves for both companies the overall business purposes of the originally proposed transaction. Also, the new pact more closely adheres to the terms of FERC's earlier approval by more clearly defining the interests ANR would acquire in facilities on specific Arkla pipeline segments.