Liquified Natural Gas (LNG)
Liquefied natural gas (“LNG”) is natural gas that has been cooled to its liquid state at -260 degrees F (162 degrees C). LNG takes up 1/600th of the volume of natural gas, reducing natural gas storage and transportation costs. LNG may be transported via specially designed ships, Articulated Tug and Barge systems (ATBs), or ships carrying cryogenic intermodal containers (also known as “ISO containers”).
For more information on LNG, see FERC Frequently Asked Questions – LNG
Hawaii Gas Synthetic Natural Gas (“SNG”) Backup Enhancement Project
Because Hawaii has no naturally occurring petroleum products or natural gas like those found on the mainland, The Gas Company produces Synthetic Natural Gas (SNG) from petroleum by-products. For more on SNG, see our About Gas Energy page.
On August 12, 2013, the Gas Company, LLC (also known as “Hawaii Gas”) filed an application before the Public Utilities Commission (“PUC”) for approval to commit funds in excess of $500,000 for a proposed SNG Backup Enhancement Project (“Backup Project”), for the associated Fuel Supply Agreement and Fuel Delivery Contract, and for its proposal to include the costs of the Supply Agreement and the Delivery Contract in its Fuel Adjustment Charge (“FAC”) to the extent the costs are not recovered in base rates. The Backup Project involves the import of LNG via ISO containers to back-up its SNG plant operations. In its Final Statement of Position, the Consumer Advocate did not object to the application, noting that the project should result in cost savings and increase the ability of Hawaii gas to provide reliable utility gas service. On March 6, 2014, the PUC approved the Fuel Supply Agreement, the Fuel Delivery Contract, and the request to include the associated costs in the FAC. However, the PUC denied the request to commit funds in excess of $500,000 for the Backup Project because the rule under which Hawaii Gas is applying for approval relates to “proposed” capital expenditures. A significant portion of the funds referenced in the application have already been spent.
For more on this, including the PUC’s decision and order, look up Docket No. “2013-0184″ on the PUC’s DMS page.
In March 2013, the Hawaii Natural Energy Institute (“HNEI”) released a study by FACTS Inc. to examine the potential costs and benefits of importing LNG to Hawaii. Read the report here: HNEI – Liquefied Natural Gas for Hawaii: Policy, Economic, and Technical Questions
In August 2012, The Gas Company, LLC (also known as “Hawaii Gas”) applied to the Federal Energy Regulatory Commission (“FERC”) under section 3 of The Natural Gas Act for authorization to operate facilities to receive and regasify LNG shipments from the continental U.S. In January 2013, FERC found the proposed LNG project would not fall under its jurisdiction and dismissed the request. Read the order here: FERC Order Dismissing Request for Section 3 Authorization
Read more information about this docket, including the application and comments filed, by entering Docket Number “CP12-498″ at the FERC docket search page.