338 Unsuccessful exploration and develop

ment costs.

A. This account shall include unsuccessful exploration and development costs incurred on or related to hydrocarbon leases, on properties in the contiguous 48 States and the State of Alaska, acquired after October 7, 1969. It shall also include costs of a preliminary nature incurred in the search for natural gas in such areas after October 7, 1969.

B. The costs recorded in this account shall be amortized by debiting account 404.1, Amortization and Depletion of Producing Natural Gas Land and Land Rights, and crediting this account using the unit-of-production or other acceptable method of amortization as hydrocarbons are extracted from producing wells.

C. In general, the unamortized costs recorded in this account shall not exceed the net realizable value (estimated selling price less estimated costs of extraction, completion and disposal) of proven hydrocarbon reserves on leases acquired after October 7, 1969. (See "Special Instructions-Costs Related to Leases Acquired After October 7, 1969," above.)

B. 2. Products Extraction Plant

340 Land and land rights.

This account shall include the cost of land and land rights used in connection with the processing of natural gas for removal of gasoline, butane, propane, or other salable products. (See gas plant instruction 7.)

341 Structures and improvements.

This account shall include the cost of structures and improvements used in connection with the processing of natural gas for removal of gasoline, butane, propane, or other salable products. (See gas plant instruction 8.)

342 Extraction and refining equipment.

This account shall include the cost installed of equipment used for the extraction from natural gas of gasoline, butane, propane, or other salable

products and for the refining of such products.

ITEMS

including

1. Boiler plant equipment, boiler, boiler setting, heat exchangers, etc. 2. Compressed air system, including air compressor, air storage tank, etc.

3. Cooling equipment such as coolers, cooling tower and accessories for gas, extracted products, etc.

4. Cranes, trolleys, and hoists.

5. Electrical system, including generator and driving unit, power lines, transformers, switchboard, yard lighting system, etc.

6. Extraction and refining equipment, such as absorbers, reabsorbers, stills, dephlegmators, fractionating towers, stabilizing columns, contro; apparatus.

7. Foundations and structural supports for equipment items not intended to outlast the equipment for which provided.

8. Fuel regulating and measuring equipment.

9. Gasoline blending equipment including dye pot, educator pumps, lead storage tanks, weighing device, etc.

10. Gauges and instruments.

11. Loading racks and associated other equipment.

12. Lubricating oil system.

13. Pumps of various types, such as boiler feed water pumps, loading and transfer pumps, drip still pumps, oil pumps, skimmer basin pumps, etc.

14. Tanks of various types such as accumulator and dewatering tanks, separator tanks, gasoline feed tanks, compressed air tanks, oil surge tanks, etc., except tanks classifiable as storage equipment, account 344.

15. Water supply system including water well, water tank and supports, water softener or purification apparatus, traveling water screen and drive.

16. Yard piping, gas, water, steam, compressed air, fuel, vapor, extracted products, including headers, valves, etc., but not including off-site lines includible in account 343, Pipe Lines.

343 Pipe lines.

This account shall include the cost installed of gas and liquids pipe lines used in connection with the processing of natural gas for the removal of gasoline, butane, propane, or other salable products, exclusive of runs of pipe appropriately includible in other equipment accounts, embracing principally off-site gas, gasoline gathering, and loading lines not includible as yard

B. Exclude from this account rents or other charges paid periodically for use of subsurface reservoirs for underground gas storage purposes.

NOTE: Items such as buildings, wells, lines, equipment and recoverable gas used in storage operations acquired with land or storage leaseholds and rights are to be classified in the appropriate accounts.

352.2 Reservoirs.

This account shall include costs to prepare underground reservoirs for the storage of natural gas.

ITEMS

1. Geological, geophysical and seismic costs.

2. Plugging abandoned wells. 3. Fuel and power.

4. Drilling and equipping fresh water wells, disposal wells, and solution wells.

5. Leaching of salt dome caverns.

6. Rentals on storage rights and leases incurred during construction and development period.

7. Gas used during the development period.

8. Costs incident to maintaining covenants of production leaseholds during the period required to convert them to storage leaseholds.

9. Other rehabilitation work.

352.3 Nonrecoverable natural gas.

A. This account shall include the cost of gas in underground reservoirs, including depleted gas or oil fields and other underground caverns or reservoirs used for the storage of gas which will not be recoverable.

B. Such nonrecoverable gas shall be priced at the acquisition cost of native gas or, when acquired for storage by purchase or presumed to be supplied from the utility's own production, priced as outlined in Paragraph B of account 117, Gas Stored Underground-Noncurrent. After devotion to storage, the cost of the gas shall not be restated to effect subsequent price changes in purchased gas or changes in the cost of gas produced by the utility. When the utility has followed the practice of adjusting nonrecoverable gas to the weighted-average cost of gas purchased or supplied from its own production, cost shall be the weightedaverage cost of such gas at the effective date of this account.

353 Lines.

This account shall include the cost installed of gas pipe lines used wholly or predominantly for conveying gas from point of connection with transmission or field lines to underground storage wells and from underground storage wells to the point where the gas enters the transmission or distribution system.

ITEMS

1. Cathodic protection equipment.

2. Creek crossings, suspension bridges and other special construction.

3. Lines, including pipe, valves, fittings, and supports.

4. Line drips and separators.

354 Compressor station equipment.

This account shall include the cost installed of compressor station equipment used wholly or predominantly for the purpose of raising the pressure of gas for delivery to underground storage or to raise the pressure of gas withdrawn from underground storage for delivery to the transmission or distribution system.

ITEMS

1. Boiler plant, coal handling and ash handling equipment for steam powered compressor station.

2. Compressed air system equipment.

3. Compressor equipment and driving units, including auxiliaries, foundations, guard rails and enclosures, etc.

4. Electric system equipment, including generating equipment and driving units, power wiring, transformers, regulators, battery equipment, switchboard, etc.

5. Fire fighting equipment.

6. Gas lines and equipment, including fuel supply lines, cooling tower and pond and associated equipment, dehydrators, fuel gas mixers, special pipe bends and connections, and associated scrubbers, separators, tanks, gauges and instruments.

7. Laboratory and testing equipment. 8. Lubricating oil system, including centrifuge, filter, tanks, purifier, and lubricating oil piping, etc.

9. Office furniture and fixtures and general equipment such as steel lockers, first-aid equipment, gasoline dispensing equipment, lawn mowers, incinerators, etc.

10. Shop tools and equipment.

11. Water supply and circulation system, including water well, tank, water piping, cooling tower, spray fence, and water treatment equipment, etc., but not including

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