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Florida Company Seeks FERC Exemption for Portable LNG Export Plans

A Florida company is asking FERC to declare its plans to export liquefied natural gas (LNG) exempt from its regulatory oversight on the grounds that it plans to use portable technology to produce LNG rather than construct a terminal.

Strom Inc., based in Clearwater, FL, said it plans to use a mobile LNG conversion unit produced by General Electric Co. (GE) and formerly sold in Europe under the name "LNG in a Box," to convert natural gas produced in the United States into 10,000-50,000 gallons per day (gpd) of LNG.

The company filed a motion for a petition for declaratory order with the Federal Energy Regulatory Commission [Docket No. CP14-121-000] on Feb. 28. Strom argues that under the Natural Gas Act, portable LNG technology is exempt from FERC jurisdiction because it does not fit the definition of an LNG terminal.

According to documents filed with FERC, Strom filed three applications in February with the U.S. Department of Energy's (DOE) Fossil Fuel Section to export LNG using ISO cryogenic containers.

"While Strom has filed [applications] to export, it intends to provide LNG to smaller U.S. markets that are not currently served by the larger producers," the company said in its initial FERC filing. "With LNG infrastructure expanding and authorized under FERC jurisdiction, smaller companies like Strom would be in a position to secure [a] natural gas line directly to a device such as 'LNG in a Box.'"

Strom said it was "pursuing discussions" with several localities in Florida to base its LNG export operations and would file for the appropriate state and local permits. The company said it was looking at sites in the Indiantown, Tampa and Pensacola areas.

The documents also reveal that in 2011 Strom subsidiary Atlantic Renewable Resources Inc. "entered into a contract to provide alternative energy to a large hotel in a U.S. jurisdiction governed by the U.S. Constitution.

"Strom decided to utilize LNG for its client but was unable to secure small amounts of LNG due to the enormously large volume of LNG capacity necessary to make economic sense for the producer." That, in turn, led to the decision to file the three applications with DOE.

Strom's two sole stockholders, CEO Michael Lokey and President Dean Wallace, did not respond to a message seeking comment on Tuesday.

Two companies -- Pivotal LNG Inc., a subsidiary of AGL Resources Inc., and Floridian Natural Gas Storage Co. LLC (FGS) -- filed motions to intervene in the case on April 15 and 18, respectively. On April 30, Strom asked FERC to grant Pivotal's motion to intervene but to deny FGS's motion.

FGS has proposed building a liquefaction facility in Indiantown (see Daily GPI, Aug. 19, 2013). Meanwhile, Pivotal owns a liquefaction facility near Trussville, AL. Last September, Argent Marine Management Inc. filed a request with DOE to export LNG from Trussville to free trade agreement countries (see Daily GPI, Sept. 11, 2013).

GE's Oil & Gas (O&G) division unveiled its "LNG in a Box" system last year, with initial units to be deployed in Europe under an agreement with Luxembourg's Gasfin SA (see Daily GPI, April 19, 2013). But Caitlin Shaw, spokeswoman for GE O&G, told NGI that those systems have yet to be installed.

"Due to market dynamics over in Europe, the project is on hold, so ultimately we haven't installed any of those exact LNG systems for Gasfin," Shaw said Tuesday. She added GE O&G's business model changed and it dropped the "LNG in a Box" name two months after the deal with Gasfin, when it acquired the Salof Companies (see Daily GPI, June 4, 2013).

"We've increased our range of modular small-scale LNG systems that can meet a diverse customer base," Shaw said. "In order to avoid steering customers only to the smallest system of 'LNG in a Box' versus our small-scale LNG system -- and in order to also avoid confusion with our 'CNG in a Box' system -- we're referring to all of our non-utility scale LNG offerings simply as small-scale LNG plants."

According to GE O&G, its small-scale LNG plant can process 50,000-450,000 gpd of NGL.

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