STEPHENS ENERGY CORP. - The Railroad Commission of Texas

February 28,2005
via Certifed Mail
Re: Letter Dated February 2,2005;
Dear Mr-:
At the outset, let me say that we are always concerned abwt the fuel and lost 8
unaccounted gas (FLUG) on every system Enbridge operates. We have, in fact added
resources in recent years and collaborated to some extent with industry as this issue is a
shared challenge among the industry. As you noted, the December 2004 FLUG
percentage was 24%. approximately 5% and 2.5% of which was system fuel and
condensate. respectively.
The balance of the lost and unacoounted for gas is a function of many components. most
of which are not measurable. Gathering systems consist of various Interconnects,
pressure relief valves, fittings, block valves. meter installations, risen, compressor
stations, dehydrators, processing plants, treating plants, just to name a few. Each of
these locations is a potential source of gas loss. For example, a pressure change can
trigger additional losses as relief valves protect the pipeline system. Free water delivered
into our system by producer's faulty wellhead separation equipment introduces
measurement error. Water entrained as vapor in the gas stream also contributes to
inaccurate measurement on gathering systems. The thawing of line freezes and
Mowdowns, gas sampllng and a host of other numerous items all can contribute to
losses. Likewise. measurement variances due to the nature of measurement equipment
operating in Beld conditions-, even within industry standards of a +I- 2% tderance.
contribute to LUG.
To further explore, and correct, the multitude of problems along the system that could be
a contributing factor, we have long conducted on-the-ground leakage surveys'
periodically, following industry common practices and standards. We recently initiated
field trials of new technology using aerial surveillance coupled with the infrared
technology which, if found reliable. would significantly enhance the detection of
previously undiscovered losses. Along with other pipeline preventive maintenance and
inspection progtams, we have a program of planned equipment upgrades and