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FERC Urged to Not 'Brush Aside' Concerns Associated with Cove Point LNG Project

While supporting efforts of FERC to process proposals to build liquefied natural gas (LNG) import terminals in a timely fashion, gas distributor KeySpan Energy said it was "equally important" for the federal agency to take the proper steps to ensure that LNG supplies "do not compromise the safety and reliability of existing distribution systems."

In comments filed at FERC last Wednesday, KeySpan said it backed a request by Washington Gas Light (WGL), which serves metropolitan Washington, DC, to consider the gas quality and interchangeability concerns associated with Dominion Cove Point LNG's proposed terminal expansion in the same proceeding in which the agency is deciding whether or not to approve the proposed terminal expansion and associated pipeline project [CP05-130, CP05-132, CP05-131].

"It is clear that the Commission must comprehensively address the substantive safety and reliability concerns raised by WGL and other parties in this proceeding...Contrary to the claims of Dominion and [its shippers], the Commission cannot simply brush these concerns aside," said KeySpan Energy, the largest gas distributor in the Northeast and owner of an LNG storage facility in Providence, RI.

Dominion has requested that WGL be required to pursue resolution of Cove Point-related interchangeability issues in a separate Section 5 complaint proceeding, KeySpan said. "Given the fact that all of the parties have an interest in both the proposed expansion of Cove Point and the pre-existing system, it is not clear how any party would benefit from a bifurcated resolution of gas quality issues on the Cove Point system."

The Federal Energy Regulatory Commission "cannot summarily dismiss the gas interchangeability issues that have been properly raised in this proceeding" by WGL with respect to the proposed Cove Point LNG expansion, the New York City-based distributor said. The Commission must make sure that the Cove Point expansion "will not compromise the safety and reliability of WGL's distribution system or other distribution systems that may receive deliveries of revaporized LNG."

On Nov. 30, WGL called on FERC to condition any certificate granted to the Dominion Cove Point expansion on the adoption of appropriate measures that would ensure gas delivered by the Cove Point terminal is interchangeable with traditional gas and will not negatively impact the utility's system. WGL earlier in November urged the Commission to reject the proposed Cove Point LNG terminal expansion until it can be demonstrated at a evidentiary hearing that imported LNG is fully interchangeable with traditional gas supplies.

Statoil Natural Gas LLC, BP Energy Co. and Shell NA LNG LLC, major purchasers of LNG from Cove Point, implored the agency to reject WGL's plea, calling it an "untimely and ill-conceived effort to derail or delay the Cove Point expansion project...and to force Dominion Cove Point and/or [its shippers] to bear the cost for unproven 'fixes' to WGL's troubled infrastructure."

The Washington, DC-based utility's request followed claims earlier this year that vaporized LNG from the Cove Point terminal was to blame for widespread leaks on its distribution system in Prince Georges County, MD. WGL commissioned a study that determined that LNG was the key factor contributing to the deterioration of rubber seals in mechanical couplings that join sections of distribution mains to service lines on the WGL gas distribution system (see NGI, July 11).

Prince Georges County is the most populous county served directly off the Cove Point Pipeline, which carries regasified LNG from the Cove Point terminal in eastern Maryland.

WGL contends that the proposed Cove Point terminal expansion, which would increase sendout capacity to 1.8 Bcf/d and storage capacity to 14.5 Bcf, would potentially cause even more problems on its system. The expansion project also entails the construction of 161 miles of pipeline in Maryland and Pennsylvania. FERC issued a favorable environmental review of the project in late October (see NGI, Oct. 31)

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