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Distributors Seek Btu Standards for Tennessee Pipeline

Sixteen distributor customers of Tennessee Gas Pipeline and FPL Energy have petitioned FERC to set appropriate gas quality standards before approving the pipeline's request to add a 500 MMcf/d connection to regasified liquefied natural gas (LNG) supplies to its system. The group objected to the filing of the interconnection application under the Commission's fast-track prior notice procedures (CP08-400).

Tennessee's tariff does not have any gas quality standards or limits for LNG and as a consequence provides no protection for customers, the group said. Tennessee had requested fast-track processing for its request for an interconnection with the Kinder Morgan Louisiana Pipeline (KMLP) designed to deliver LNG from Cheniere Energy's 2.6 Bcf /d Sabine Pass import terminal on the Louisiana coast. The receiving terminal went into service in April.

The Federal Energy Regulatory Commission (FERC) has approved KMLP's proposed 135-mile, mostly 42-inch diameter, 3.4 Bcf/d pipeline connecting Sabine Pass supplies to multiple natural gas pipelines, including Kinder Morgan's Natural Gas Pipeline Company of America (NGPL), Columbia Gulf Transmission, Florida Gas Transmission, Texas Eastern Transmission, Texas Gas Transmission, Transcontinental Gas Pipe Line, Trunkline Gas and the Southwest Loop Delivery Point, as well as Tennessee (see NGI, June 25, 2007).

KMLP expects to have the first phase of the project in service by Oct. 1. The customer group said it was particularly concerned that the Commission has not approved LNG standards before the interconnection of KMLP or any other LNG deliverer. It asked the Commission to require the development of tariff standards for Tennessee and make them applicable to the LNG to be delivered via the interconnection even if the connection precedes the standards. FERC should make clear that KMLP will be subject to the standards to be developed, it said.

The Commission, after a lengthy proceeding, recently approved gas interchangeability standards for NGPL (see NGI, July 21). The interchangeability of domestic gas with LNG molecules has become a critical issue as more Btu-rich regasified LNG is introduced into the U.S. gas stream from imports, prompting concern about the impact of the Btu-rich gas on the integrity of pipeline systems. Local distribution companies are concerned about the safety of regasified LNG for their end-use customers. In June 2006 FERC adopted a policy statement that takes a pipeline-by-pipeline approach to the complex issue of gas quality and interchangeability (see NGI, June 12, 2006).

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