Features. Fuels: Will turbines require expensive retrofits to handle imported LNG?

Power, Mar 2007 by Jost, Barbara S, Davis, Esq, LLP, Tremaine

face= Italic; With domestic reserves of natural gas declining and demand for gas rising, imported liquefied natural gas will increasingly fill the shortfall in U.S. pipeline supply. More than 40 LNG receiving/regasification terminals on three coasts are in various stages of development. Yet many questions about the operational and emissions impacts of the "hotter" LNG imports on today's cleaner-burning gas turbines remain unanswered.face=-Italic;

By Barbara S. Jost, Esq. Davis, Wright, Tremaine LLP

As the regulator of U.S. natural gas pipeline networks, the Federal Energy Regulatory Commission (FERC) has decided that increasing imports of liquefied natural gas (LNG) is the best way to increase gas supplies and moderate prices. Five years ago, LNG capacity in the U.S. totaled 4 billion cubic feet per day (bcfd). Between 2002 and 2006, FERC authorized an additional 12 bcfd of LNG capacity, and last June--in a single day--the agency authorized new LNG projects totaling an additional 9.7 bcfd. LNG imports are projected to increase at a whopping 16% annual rate through 2025.

Although FERC has encouraged the development of new LNG receiving terminals, it has been slow to address the significant operational and environmental problems created for gas-fired generators by the introduction of imported gas into existing U.S. gas transmission and distribution networks. In a nutshell, the problem for generators is this: Imported LNG has much different quality specifications than the domestically sourced natural gas they are accustomed to burning.

face= Bold; Is hotter better?face=-Bold;

In general, imported LNG has substantially higher Btu content than domestic gas. As a result, for each new proposed LNG terminal, FERC must consider the extent to which the new project's output will be interchangeable with supplies already in its delivery pipeline, as well as the impact that the mixing will have on end users, especially combustion turbines.

One commonly used measure of this interchangeability is the "Wobbe Index," which is based on the heating value and specific gravity of the gas. A 1992 survey revealed that most domestic gas was between 1,331 and 1,357 on the Wobbe scale; however, it also showed that not all gas within this range was interchangeable. What's more, the study found that in specific regions of the country, the Wobbe range was much tighter. Imported LNG has higher Wobbe indices, with a maximum typically exceeding 1,400.

Manufacturers of gas turbines designed a unit's components (especially its fuel nozzles) based on the historical Wobbe Index range of its intended site. Introducing LNG with a higher Wobbe Index into a site's supply pipeline will often necessitate replacing old nozzles with new ones--at considerable cost--to optimize combustion and emissions performance.

face= Bold; FERC addresses the issueface=-Bold;

All gas supplies, regardless of origin, are required to conform to a pipeline's quality specifications set forth in a FERC-approved tariff. Each pipeline operator establishes its own terminology, standards, controls, and conditions for establishing that its supplies are "pipeline quality."

This system worked well until gas prices began to rise in the 1990s. Domestic gas suppliers had stopped removing natural gas liquids (butane, propane, and ethane) from the gas stream with the intent of selling them separately. Instead, with the price rise, it became more profitable to leave those liquids in the gas stream. This increased both the Btu content of the gas stream and the potential for liquid hydrocarbon dropout while the gas was in transit. Hydrocarbon liquid dropout can cause O&M problems for pipelines and also damage gas turbine-generators.

Awareness of these new gas quality problems grew with proposals to build dozens of LNG terminals that would produce gas of higher heating value. To address the problems, and to "lower a potential barrier to expected increases in LNG imports," FERC concluded that it needed to update its gas quality and interchangeability standards. On June 15, 2006, the commission did just that with its Policy Statement on Gas Quality and Interchangeability.

The policy statement did not establish fixed nationwide gas quality standards to replace the existing standards--the pipeline tariffs. Instead, FERC delineated five principles, or guidelines, for case-by-case revisions to each pipeline's quality specifications.

As one of these five principles, FERC "strongly encouraged" parties to use the numerical guidelines of the Natural Gas Council Plus (NGC ) as a common scientific reference point for resolving gas quality and interchangeability issues. The two NGC reports (one on interchangeability and one on hydrocarbon liquid dropout) were prepared by an industrywide working group under the auspices of the Natural Gas Council and filed with FERC in early 2005. These two reports offered findings and recommendations, detailed a process for further research on these issues, and set forth interim guidelines for use pending the completion of additional studies and research.