| Friday, January 18, 2013 | | FERC Comes to the Rescue as Gas Supply Threatened by Tesoro Shutdown
By News Release @ 12:57 AM :: 619 Views :: Energy |  | FERC dismisses request for liquefied natural gas import authorization
C-2, The Gas Company, LLC, Docket No. CP12-498-000. The order dismisses The Gas Company, LLC’s request for authorization to operate facilities to receive and vaporize domestic liquefied natural gas (LNG) transported from the U.S. mainland, for distribution to end use customers in Hawaii. The order finds that the proposed project does not constitute an LNG terminal as envisioned under section 3 of the Natural Gas Act and does not require any other authorization from the Commission.
FULL TEXT: FERC Order of Dismissal (Excerpt below)
4. The Gas Company relies on a single source for its SNG: the Tesoro oil refinery in Kapolei, located just west of Honolulu. A 22-mile-long Gas Company pipeline extends from the SNG plant to Pier 38 in Honolulu Harbor, a point of interconnection with eight of The Gas Company’s SNG distribution systems. The Gas Company explains that in response to concerns about the future reliability of its single SNG source – and in view of the typically high cost of the naphtha-based feedstock used to make SNG and the decline in the cost of natural gas – it has decided to supplement its SNG supplies by introducing LNG supplies to Hawaii. The Gas Company declares it “already has in place the necessary infrastructure and experienced workforce” and “already operates within the legal and regulatory framework necessary for delivering gas to business and residential customers throughout the state.
SA: Limited Hawaii LNG shipments not subject to federal rules
PBN: Hawaii Gas doesn't need FERC approval to start shipping LNG
Macquarie Infrastructure Company's Hawaii Gas Business Clears Federal Hurdle to Transporting Containerized LNG
FERC declines to assert jurisdiction
News Release from MIC
Macquarie Infrastructure Company's (NYS: MIC) Hawai'iGas business received a decision from the Federal Energy Regulatory Commission (FERC) that is expected to accelerate Hawai'iGas' proposal to transport containerized liquefied natural gas (LNG) from the U.S. mainland to Hawaii.
In a decision published yesterday, the FERC declined to assert jurisdiction over Hawai'iGas' proposal, thereby removing a potential federal hurdle to the project. Hawai'iGas sought FERC approval in an August 2012 filing.
The project remains subject to satisfaction of state and local regulatory requirements.
"The FERC's decision not to assert jurisdiction over the proposed transportation of LNG to Hawaii is a positive step for both the company and the Hawaiian economy," said James Hooke, Chief Executive Officer of MIC. "The decision should hasten the implementation of the LNG program at Hawai'iGas and opens the door to reducing the cost of energy in Hawaii."
At current prices LNG is about 25% less expensive than the feedstock used to produce the synthetic natural gas distributed to Hawai'iGas' utility customers.
In anticipation of the required approvals, Hawai'iGas has secured the equipment necessary for the vaporization of LNG and two LNG shipping containers. The company plans to employ up to 20 containers in a continuous cycle of transport of liquefied natural gas from the U.S. mainland to Hawaii.
Hawai'iGas expects to be prepared to receive a first container of LNG in as little as 60 days, subject to its having obtained required approvals from state and local authorities.
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