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Columbia Cites Flaws in WGL Plan to Isolate System from LNG

September 1, 2008
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Columbia Gas Transmission has questioned Washington Gas Light's (WGL) proposal that casts the pipeline in a leading role in the utility's efforts to prevent further coupling leaks on its system, which WGL blames on regasified liquefied natural gas (LNG).

At a FERC technical conference in late August, the Washington, DC-based utility proposed that more regasified LNG volumes from Dominion Cove Point's terminal in Maryland be shifted from Columbia's 26-inch diameter line to its 30-inch diameter line, allowing the regasified LNG to bypass the utility's Dranesville, VA, and Rockville, MD, stations (see NGI, Aug. 18). WGL's plan is to isolate its distribution system as much as possible from the regasifed LNG volumes, which WGL contends caused more than 1,600 coupling leaks at the height of the problem on its system in 2004. Columbia is the largest natural gas supplier to WGL, which serves parts of Virginia, Maryland and the District of Columbia.

"Assuming many factors that have not been thoroughly analyzed or studied but which have been assumed...Columbia submits that a readily identifiable and significant consequence resulting from Columbia changing any operations to ensure that regasified LNG from Cove Point remained exclusively on [its 30-inch line] is that during various high hourly morning flows Columbia would be unable to maintain contract delivery pressures to WGL at Rockville. Consequently, Columbia cannot take steps required to ensure regasified LNG flowed exclusively on [the 30-inch line]," Columbia said in response to data requests of the Federal Energy Regulatory Commission [CP05-130].

And "to assure that the flow of regasified LNG from Cove Point goes exclusively into the [30-inch line] Columbia would have to restrict receipts of regasified LNG from Cove Point into Loudoun [VA] to match the hourly requirements of the customers downstream of Loudoun during summer/low-flow conditions," the NiSource pipeline subsidiary said.

"To prevent regasified LNG from reaching the Dranesville and Rockville markets, Columbia would close a regulator at Linden Church [in Howard County, VA]. This regulator currently controls the flow of gas from Linden Church to Rockville on [the 26-inch line]. There is also a regulator located at Linden Church that permits gas to flow from west to east. It would be necessary for Columbia to closely monitor this west-to-east regulator to prevent gas [from Cove Point] from flowing backwards" to Rockville, the pipeline told FERC.

Columbia further said changes in operational conditions -- such as adjustments in contractual commitments and nominations, and maintenance and expansion projects -- would pose problems. For instance, if the 30-inch diameter Columbia line from Loudoun to Linden Church "is out of service, the receipt of regasified LNG from Cove Point will have to be shut in to prevent LNG from getting to the WGL Rockville and Dranesville markets. Likewise, if the [26-inch line] from Dranesville to Rockville is out of service, the receipt of regasified LNG from Cove Point will have to be shut in to prevent LNG gas from getting to the WGL Rockville markets," Columbia said.

"Last, like any pipeline system, Columbia's system is subject to numerous factors that change hourly and daily that impact its system and require Columbia's gas controllers to maintain the flexibility to redirect flows or otherwise manage its system in a prudent manner to serve all customers' firm obligations. Columbia must manage its system to service all of its contractual commitments as those services are nominated daily by customers (existing or potential new or expansion customers), which are in a constant state of change over time; manage (by restriction of receipts or other operational change) the gas quality on its pipeline system; and could not guarantee any steady state of circumstances that would allow even the hypothetical operations [as described] to become an unchangeable operating scenario on its system."

While Columbia has had "general discussions" with WGL about gas quality issues, "there have been no discussions focused on minimizing the exposure of WGL's system to LNG," Columbia said. "However, WGL has used the flexibility afforded by Columbia's existing tariff to arrange for secondary deliveries of flowing gas into Loudoun to mix with the regasified gas from Cove Point. Under recent operating conditions, which are subject to change...the addition of the flowing gas supplies reduces the flow at Rockville, and the corresponding likelihood of regasified LNG flowing from Linden Church to Rockville."

At the August technical conference, WGL officials reported that the injection of hexane into regasified LNG volumes from the Cove Point terminal has reduced the number of incremental coupling leaks on its distribution system, but they noted that hexane alone will not solve the leakage problem that has plagued the utility for several years.

Even with the injection of hexane, which helps to eliminate the role of heavy hydrocarbons in causing the leaks, WGL told FERC that it experienced an increase in leaks in what it called its Virginia Reintroduction Area, which represents 5% of the coupled pipe on its system (91 miles of coupled main). Cove Point regasified LNG blended with hexane was introduced into this area of WGL's system in March 2007, and a leak survey was conducted from February through June of this year. The survey found that the leak rates in the Virginia area rose 247% during the period.

Although high, the 247% rise was far below the 1,692% increase to more than 1,600 coupling leaks in 2004 that occurred when unblended regasified LNG was introduced into its system in Prince George's County in Maryland, according to WGL. After ongoing remediation efforts, the utility estimates that it has significantly reduced leaks in Prince George's County. But WGL fears that the number of leaks could balloon when additional volumes of LNG, even those that are hexane-treated, flow on its distribution system as a result of Cove Point's terminal expansion.

"Extrapolating this 247% increase to other parts of the balance of the coupled pipe [on WGL's] system amounts to the company experiencing an incremental 3,500 coupling leaks per year, primarily in the winter" as a result of Cove Point's expansion, said Doug Staebler, WGL's vice president of construction and engineering. The leaks are projected to occur even though WGL has constructed two hexane treatment plants in Charles County, MD, and Rockville, and is in the processing of constructing a third in Fairfax, VA, which is due to be completed in November. WGL estimated it would take 14 years to completely fix the incremental 3,500/year coupled pipe leaks, and would cost $525.5 million.

Total projected leaks post-Cove Point expansion on WGL's system could go as high as 6,099, according to WGL.

"Nothing...ties Cove Point to unsafe leaks" on WGL, countered Paul Ruppert, Dominion's vice president of engineering and plant operations, at the FERC technical conference.

The Commission called the technical conference after the U.S. Court of Appeals for the District of Columbia Circuit in late July vacated a FERC order approving Dominion Cove Point's LNG terminal expansion in Lusby, MD, ruling that the evidence did not support the agency's conclusion that WGL can fix widespread leaks on its system before the expansion goes into operation this fall (see NGI, July 21).

Dominion Cove Point and Dominion Transmission Inc. immediately called on FERC to affirm and reissue all of the agency's authorizations for the $700 million expansion of their import terminal and associated pipeline facilities. The affiliates asked the Commission to issue a decision by Aug. 29 because petitions to challenge the appellate court ruling vacating FERC's authorizations for the expansion are due on Tuesday, and the court's mandate in the case is expected to be issued on Sept. 9 (see NGI, Aug. 4).

FERC asked Dominion to discuss "any contingency plans" it has considered in the event construction and operation of the expansion facilities cannot move forward and be in service on Nov. 1. It also asked WGL to identify any "remedial measures or action plan" that it has in place in the event Cove Point is permitted to complete its terminal expansion.

In 2006 WGL petitioned the court for review of the FERC order approving the construction of the Cove Point LNG project, which would increase the sendout capacity of the terminal on the eastern shore of Maryland to 1.8 Bcf/d from 1 Bcf/d, and would boost storage capacity to 14.6 Bcf from 7.8 Bcf (see NGI, June 19, 2006). The utility challenged the order on the grounds that an influx of LNG would aggravate leaks on its distribution system.

In 2005 Washington Gas said it discovered nearly 1,600 leaks concentrated in Prince George's County, an area primarily supplied by unblended regasified LNG from Cove Point. The utility blamed the leaks on the chemical composition of the LNG from Cove Point and sought to block the terminal expansion (see NGI, July 11, 2005).

FERC in its original order found that the influx of blended LNG would not have adversely affected WGL's system in Prince George's County if a subset of the compression couplings had not been compromised during the installation process decades ago. The agency concluded that the leaks occurred because WGL applied hot tar to system couplings when they were installed.

The appellate court in July agreed with FERC's finding -- that "WGL's couplings were so damaged by the hot tar that its distribution system became susceptible to the confluence of multiple leak-inducing factors, such as LNG and cold weather." However, the court said FERC had failed to carry out its obligation of ensuring that WGL's leaks would be fixed before the Cove Point expansion went into operation. As a result, the court vacated the agency order and remanded the case to FERC to address whether the expansion could go forward without causing unsafe leakage.

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