CLA-2-84:OT:RR:NC:N1:105
Natasha Albertini
Deloitte Tax Services Pty Ltd
Brookfield Place, Tower 2
123 St Georges Terrace
Perth, WA, 6000
Australia
RE: The tariff classification of the HP/LP Flare Knockout/CHD Module from Canada
Dear Ms. Albertini:
In your letter dated October 17, 2023, on behalf of your client, Santos Limited - Oil Search (Alaska), you requested a tariff classification ruling. Descriptive literature and pictures were provided for our review.
The item under consideration is described as the HP (High Pressure)/LP (Low Pressure) Flare Knockout/CHD (Closed Hydrocarbon Drain) Module (Module No. 142), which is a module that will be incorporated into the Nanushuk Processing Facility (NPF). The NPF, when completed, will process oil deposits from the Nanushuk reservoir into sales quality oil. The Flare Knockout/CHD Module is comprised of building heater motors, building heaters, a closed hydrocarbon drain drum, a closed hydrocarbon drain drum pump, a closed hydrocarbon drain drum pump motor, a closed hydrocarbon drain drum pump seal pot, exhaust fan motors, exhaust fans, HP Flare Knockout drum, HP Flare Knockout drum pump, HP Flare Knockout drum pump motor, HP Flare Knockout drum pump seal pot, HP/LP Flare Knockout and pump building, LP Flare Knockout drum, LP Flare Knockout drum pump, LP Flare Knockout drum pump motor, and the LP Flare Knockout drum pump seal pot. This module is intended to be shipped by barge as a completed module. The assembled module measures 66 feet 10 inches long by 23 feet 7 inches wide by 23 feet 6 inches high, and weighs 249,000 lbs. All of the elements listed above will be shipped as part of the complete module. These elements are piped together with this module comprising integral parts of the greater HP Flare, LP Flare, and Hydrocarbon Drain systems.
The HP/LP Flare Knockout/CHD Module will be used to separate entrained liquids from gas streams. The module is a two-flare system used in the production of oil and gas for separation purposes. This module includes a closed hydrocarbon drain to collect condensed vapor to be separated and sent through the HP Flare Knockout system. Gases from this module are sent to the Flare Stack (imported separately) to be burned as waste streams. The HP flare header pipe brings waste gas and emergency relief streams from the facility into the HP Flare Knockout Drum. This pressure vessel separates entrained liquids from the gas stream. Liquids from the HP Flare Knockout Drum are transferred back to the facility via the HP Flare Knockout drum pump. The LP Flare Knockout drum and LP Flare Knockout pump operate in the same way as their high-pressure equivalents. These elements, however, are used for a low-pressure flare system. Liquids from the LP Flare Knockout drum are transferred back to the facility via the LP Flare Knockout drum pump. The closed hydrocarbon drain drum collects and separates waste liquid and gas streams from the facility. Gas streams flow to the HP Flare Knockout drum while the liquid stream is recycled back to the facility using the closed hydrocarbon drain drum pump.
Section XVI Note 3 states: “Composite machines consisting of two or more machines fitted together to form a whole and other machine designed for the purposes of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.”
The HP/LP Flare Knockout/CHD Module is comprised of several elements which combine to perform a common function. Each element varies in purpose, combining to perform the primary function which characterizes the overall article. As the module is designed and manufactured as a single unit, each element is produced to the precise specifications to ensure functionality. As the inputs are specifically designed for use within the module, the classification shall be dictated by the principal function of the composite good, which is to separate entrained liquids from gas streams.
Accordingly, as suggested in your letter, the applicable subheading for the HP/LP Flare Knockout/CHD Module (Module No. 142) will be 8421.39.0140, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof: Filtering or purifying machinery and apparatus for gases: Other: Other: Gas separation equipment.” The general rate of duty will be free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, please contact National Import Specialist Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division