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WGL Loses Attempt to Derail Transco Project
Over the strong protests of a Washington, DC-based utility, FERC Thursday approved Transcontinental Gas Pipe Line’s (Transco) proposal to construct two bidirectional interconnections to receive regasified liquefied natural gas (LNG) from the proposed Elba Express pipeline system.
The proposed facilities would allow Transco to receive up to 1,175 MMcf/d from the two interconnections with Elba Express, which still is being developed, and deliver gas into the Elba Express system. The 189-mile Elba Express, when completed, will transport regasified LNG from Southern LNG Inc.’s Elba Island terminal at Elba Island, GA.
Washington Gas Light (WGL), which serves natural gas customers in parts of Washington, Virginia and Maryland, protested the Transco project, saying regasified LNG entering its distribution system from Transco’s system could damage pipeline couplings in Fairfax County and Centreville in northern Virginia. WGL’s argument mirrored the one it raised against Dominion Cove Point LP’s expansion four years ago. The utility claimed that LNG from Cove Point terminal was responsible for leaks on its distribution system (see Daily GPI, May 18, 2005).
“We find no merit in Washington Gas’ protest. In the Cove Point Expansion Project, we addressed at length the same contention that Washington Gas makes here, i.e. that receipt of regasified LNG has caused damage to its system, resulting in an increased number of leaks on its system. In that proceeding we found that Washington Gas’ leaks were caused primarily by other factors, namely the application of hot tar to the coupling seals as a means of corrosion control, the increase in operating pressures on Washington Gas’ system, and colder temperatures…and we explained that these leaks would not occur on a properly maintained system,” the FERC order said [CP09-88].
“The Transco interconnects with Elba Express are over 500 miles from the Washington Gas system and no one [other than WGL] raised an issue regarding the quality of the Elba Island gas supply…Nevertheless, Washington Gas suggests that the Commission require Transco (presumably at the expense of all its customers) “to make revisions to its compressors or other physical plant to permit the flow of LNG to less than all four of its lines’ to protect Washington Gas from having to ‘make substantial investments in its system in order to prepare to take receipt of gas’ flowing in interstate commerce which meets the gas quality requirements of Transco and of all the pipelines with which Transco interconnects.
“Washington Gas gives no consideration to the potential impacts such a restriction on Transco’s operations might have on other shippers and end-users; implementing Washington Gas’ proposal might well reduce customers’ supply choices and impede a competitive market,” the order noted.
After significant wrangling at FERC and in the U.S. Court of Appeals for the District of Columbia Circuit, the Commission in October 2008 gave Dominion Cove Point the green light to proceed with an expansion of its import terminal, but it conditioned the authorization to ensure that no additional volumes of regasified LNG would flow through WGL’s system as a result of the terminal expansion (see Daily GPI, Oct.8, 2008).
In 2006 WGL petitioned the court for review of the FERC order approving the construction of the Cove Point LNG project, which increased the sendout capacity of the terminal to 1.8 Bcf/d from 1 Bcf/d, and raised storage capacity to 14.6 Bcf from 7.8 Bcf (see Daily GPI, Aug. 22, 2006). The utility challenged the order on the grounds that an influx of LNG had aggravated leaks on its distribution system.
WGL reported more than 1,600 coupling leaks in 2004 when unblended regasified LNG was introduced into its system in Prince George’s County in Maryland, an area primarily supplied with regasified LNG from Dominion Cove Point. The utility blamed the leaks on the chemical composition of the LNG from Cove Point and sought to block the terminal expansion (see Daily GPI, July 8, 2005).
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