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Interchangeability of Regasified & Conventional Gas Focus of FERC Conference

Interchangeability of Regasified & Conventional Gas Focus of FERC Conference

The Federal Energy Regulatory Commission announced Thursday that it will sponsor a technical conference next month to discuss policy issues related to the interchangeability of Btu-enriched regasified natural gas (LNG) and conventional dry gas.

Specifically, the February conference will focus on the "extent to which a substitute gas [such as liquefied natural gas] can replace gas normally used by a customer without unduly interfering with the operation of the customer's natural gas equipment," according to the FERC notice [PL04-3]. This is a major issue for pipelines, local distribution companies (LDCs) and process gas customers.

The National Petroleum Council (NPC), in a major report on gas supply and demand last fall, recommended that gas interchangeability standards be updated, the Commission said. "FERC and DOE [Department of Energy] should champion the new standards effort to allow a broader range of LNG imports. This should be conducted with participation from LDCs, LNG purchasers, process gas users and original equipment manufacturers," the NPC report noted.

At a FERC conference last October on the NPC report, FERC Chairman Pat Wood said updated interchangeability standards would become more of an issue as an increasing number of LNG import terminals were sited near market centers, which would lessen the opportunities for the regasified gas to blend with conventional supply (see NGI's GPI, Oct. 15, 2003).

While the Commission has dealt with gas quality and interchangeability issues in several recent cases, the agency said these will not be discussed during the conference.

"It is clear that the Commission needs more information in order to evaluate what role, if any, it should prepare to take to address the impacts of natural gas interchangeability on the nation's energy consumers and the companies regulated by the Commission," the notice said.

The technical conference will be held on Feb. 18 at FERC's headquarters in Washington, DC. The public is invited to attend. For further information, contact Andrea Hilliard at (202) 502-8288 or at andrea.hilliard@ferc.gov, or Ed Murrell at (202) 502-8703 or at ed.murrell@ferc.gov.

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