U.S. standards governing the interchangeability of conventional gas supplies with regasified natural gas (LNG) “should not be set in a vacuum,” but rather should be agreeable with standards established by other nations, two international gas groups advised FERC.

“If the U.S. is to be competitive in attracting global gas supplies, then any standards set by FERC should not be inconsistent or unduly burdensome compared with those established elsewhere,” said the International LNG Alliance (ILNGA) and International Gas Union (IGU) in comments filed at the Commission Friday [PL04-3].

The ILNGA is sponsored by the United States Energy Association (USEA), and represents companies that aggregate and supply a majority of the liquefied natural gas used in North America. The IGU is an international non-profit organization registered in Vevey, Switzerland that promotes technical and economic progress in the natural gas industry. Its members include associations representing gas industries in 67 countries.

The ILNGA is involved in the industry-wide coalition established by the Natural Gas Council (NGC) that is seeking to reach a consensus on both natural gas quality standards and interchangeability standards, the latter of which is the ability to replace conventional gas supplies with LNG (almost pure methane) in pipelines without affecting the performance of the facilities and the fuel (see Daily GPI, Feb. 19). The Federal Energy Regulatory Commission has signaled that it will impose its own standards if the coalition fails at its task (see Daily GPI, Feb. 25).

“The need for workable standards becomes more vital if the U.S. is to compete successfully for access to global gas supplies. Any new standards created by the Commission will have a substantial impact on the development of LNG trade and investment both within the U.S. and on commercial decisions made around the world,” the two groups said.

“Given the substantial investment required in the LNG value chain, the Commission must do its part to provide as much certainty as possible in the world market,” they noted, suggesting that FERC not waste time on pursuing a flawless interchangeability standard. “A clear and workable standard today is better than a quest for the perfect standard years from now.”

The ILNGA and IGU also stressed that gas quality standards and interchangeability standards for LNG-sourced gas are two separate issues. “LNG, which currently accounts for approximately 2% of U.S. gas supply, should not be associated with quality problems that arise when gas is not stripped due to the economics that surround processing decisions.”

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