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Northern Natural Seeks Offloading Capability at Iowa LNG Plant
Northern Natural Gas pipeline has asked FERC for authorization 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 services to third parties on an interruptible basis.
The Omaha, NE-based pipeline, which is a subsidiary of MidAmerican Energy Holdings Co., is seeking the go-ahead to offload LNG at Northern Natural’s Garner plant in Hancock County to two LNG tractor-trailers that it purchased in 2010. Each trailer holds up to approximately 850 Mcf of natural gas or an equivalent of approximately 10,000 gallons of LNG, the company told the Federal Energy Regulatory Commission (FERC) in its application. The LNG trailers “would be able to serve a small town in emergency situations.” Northern Natural called on FERC to issue a certificate by July so that its $3.7 million offloading facilities can be placed into service by October 2013.
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 the 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 approximately two hours, Northern Natural said.
Northern Natural currently has the capability to only directly inject revaporized natural gas 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.
“With the ability to offload LNG from its own facility, supply availability will be ensured when needed for Northern’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.
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 exception of the proposed offloading facilities, no other modifications to the existing facilities are required at the Garner plant, Northern Natural said. It noted that its existing liquefaction process equipment can condense, dependent upon ambient conditions, an average of 12,500 Mcf/d from gas to liquid state.
Since the primary purpose of the proposed facilities is to provide offloading capability to Northern Natural, the pipeline asked that the project costs be given a presumption of rolled-in rate treatment in its next Section 4 rate case.
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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