FERC Thursday approved Northern Natural Gas pipeline’s proposal to construct and operate facilities to offload liquefied natural gas (LNG) at its peak-shaving facility in Hancock County, IA, to respond more quickly in the event of outage emergencies, heightened demand and required maintenance, as well as to provide LNG liquefaction and delivery service to third parties on an interruptible basis.
The Omaha, NE-based pipeline, which is a subsidiary of MidAmerican Energy Holdings Co., wants to offload LNG at its Garner plant in Hancock County to two LNG tractor-trailers that it purchased in 2010. Each trailer holds up to about 850 Mcf of natural gas, or an equivalent of about 10,000 gallons of LNG, according to the company.
Northern Natural said it is seeking to place the $3.7 million offloading facilities in service by November. The Federal Regulatory Commission (FERC) approved the pipeline’s request for a presumption of rolled-in rate treatment for the cost of the project in its next general Section 4 rate case.
At the time it purchased the two trailers, Northern Natural said it did not install LNG offloading equipment at the Garner plant, but rather opted to buy LNG from third parties. With the construction of the offloading facilities, the pipeline will be able to optimize the use of these LNG tractor-trailers, giving it “more reliable and immediate access” to LNG supply. A tractor-trailer could be loaded and dispatched within about two hours, Northern Natural said.
Northern Natural currently has the capability to only directly inject revaporized LNG into its pipeline system to respond to peaking requirements during cold periods, unplanned outages and higher-than-expected demand, and maintenance situations, including hydrostatic testing to comply with federal safety regulations.
The Garner plant has been in operation since April 1978. The facility includes a refrigeration system, which condenses natural gas into a liquid state; a 2 Bcf cryogenic storage tank; and systems for vapor handling and vaporization of the LNG to a gaseous state, the pipeline said.
“With the ability to offload LNG from its own facility, supply availability will be ensured when needed for Northern Natural’s LNG tractor-trailers during maintenance or emergencies. Further, LNG utilization nationwide is expected to climb due to an increasing use of natural gas as a vehicle transportation fuel. Should Northern continue to be dependent upon a third party to supply LNG to its tractor-trailers, Northern may have to wait in line until LNG is available or pay a reservation fee in order to receive priority service. Additionally, using LNG from the Garner plant in lieu of purchasing LNG from a third party will enable Northern to control costs, for example, in the event a leak is found during a hydrostatic test,” said the interstate pipeline, which serves the Midwest.
With the exception of the proposed offloading facilities, no other modifications to the existing facilities are required at the Garner plant, Northern Natural said. Its existing liquefaction process equipment can condense, dependent upon ambient conditions, an average of 12,500 Mcf/d from gas to liquid state.
The Northern Natural Gas pipeline system extends from southern Texas to Michigan’s Upper Peninsula. It has 5.5 Bcf/d of market area design capacity, plus 2.0 Bcf/d of field area delivery capacity; and five natural gas storage facilities, with a total firm service and operational storage capacity of 73 Bcf, including 4 Bcf of LNG.
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