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Underground, LNG Storage Explored as Northwest Options

The prospect for increased development of natural gas-fired peaking generation plants to back up added wind generation in the Pacific Northwest has prompted the need for added gas storage. An analysis is under way to determine whether existing underground storage or newly developed above-ground liquefied natural gas (LNG) is the best option for assuring power system reliability in the region.

Both alternatives are included in different scenarios and sensitivity test results being looked at by Bellevue, WA-based Puget Sound Energy (PSE) as part of the combination utility's latest revision to its draft 20-year Integrated Resource Plan (IRP).

While the forecasts for annual natural gas customer growth in the region vary between lows of 1.75% and 2.54%, the PSE draft plan that was released last Friday envisions no new gas infrastructure needs before 2015-2016. It said adequate supplies and pipeline capacity exist in the upcoming years.

"No firm gas pipeline capacity is needed in any of the electric scenarios [in the IRP]," PSE's draft plan said. "Some additional pipeline capacity may be necessary in later years depending on gas and electric market conditions. All new gas-fired generating plants in the electric portfolio developed in this IRP analysis are peakers with oil backup."

In this context, the IRP calls for an investigation of the "relative merits" of a regional LNG storage facility compared to PSE leasing added storage from an expanded Mist underground facility in northwest Oregon. The assumption is that there will be continued need to expand the PSE gas-fired generation resources, making added storage a necessity.

"The two types of storage have different advantages," PSE said. "LNG has more flexibility as to location and provides high withdrawal rates, but few days of storage and very low liquefaction (injection) rates. Underground storage offers much higher injection rates, more days of storage, etc., but requires longer-haul pipeline capacity."

In the IRP, all of the electric portfolios produced by the analysis include what PSE sees as "the addition of substantial amounts of gas-fired generation" to meet future electricity demand growth. The base case sees this as being met entirely through new peaking capacity.

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