Gas Quality Interchangeability Maureen Williams Senior Manager, Gas Control & Transmission
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Interchangeability • The overall ability to substitute one gas for another without materially impacting the safety, efficiency and operability of existing end-use applications • Blending gas
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Why is this an issue now? • Domestic and Canadian production (supply) in a holding pattern • Demand is expected to continue to rise • Two main sources of expanded supplies – near to mid-term • Domestic production Outer Continental Shelf (OCS) • Liquefied Natural Gas (LNG) • Additional Sources • Coal Gasification • Landfill Gas • Alaskan Gas still more than 10 years out 3
Working To Understand the Impact • 2004 National Petroleum Council publishes a report commissioned by the Department of Energy regarding the future of US energy supply where LNG is identified as a viable alternative • National Gas Council forms a working group NGC+ to study interchangeability issues, and develop industry consensus on standards and specifications for pipeline gas quality – Publish the NGC+ White Paper 4
Looking Toward LNG • Currently 6 operating LNG import terminals in North America • 17 proposed LNG import terminals have been approved • 25 are on file in Canada, US and Mexico • 21 projects are in the planning stages • Many are in the Gulf Region • Some Illinois supplies are aggregated and sourced from the Gulf of Mexico 5
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FERC Action • June 2006, the US Federal Energy Regulatory Commission (FERC) issues a policy statement on LNG interchangeability • Supports the NGC+ White Paper and accepted its guidelines as an interim step • Pipelines need to work with LDC’s and customers to develop tariff language for Gas Quality 7
Interchangeability • The overall ability to substitute one gas for another without materially impacting the safety, efficiency and operability of existing end-use applications • Blending gas • End product will not look the same, but should work the same 8
Blending (Btu) 1050
Mixing Blending
1100
1035 1061
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Pipeline Quality • Traditional • Btu • Specific volumes of gas components • CO2, Nitrogen, Total Sulfur, H2S, Oxygen
• Water and liquids • Dust • Temperature
• New • WOBBE 10
Components of Natural Gas Component
%mole
Methane CH4
94.47
Ethane C2H6
2.21
Propane C3H8
0.40
Butanes C4H10
0.14
Pentanes C5H12
0.05
Hexanes+ C6+
0.02
Nitrogen N2
1.60
Carbon Dioxide CO2
1.10
Helium He
0.00
Hydrogen H2
0.00
Oxygen O2
0.00
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Interchangeability Index • WOBBE = Btu/ √(specific gravity) • NGC+ Guidelines • ±4% of local historical WOBBE • Subject to 1400 max WOBBE • Subject to 1110 Btu/scf max HHV
Nicor Supply Capabilities • Much of the Nicor Gas system is integrated to facilitate further blending • Storage • Market transmission pipeline system
• Some customers may have only a single source of gas
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Why are these issues important? • Anticipation of LNG into supply chain by 2008 • Higher Btu gas • Burner tip issues (industrial, power plants) • Process issues
• Current processing plants at times can generate more value of heavier hydrocarbons in gas stream • Creates more variability in Gas Composition
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Nicor’s Participation • Industry technical conferences • Writing and editing the technical papers white paper • Supporting pipeline gas quality tariff changes with testimony, technical conference presentation and brief filings before FERC • Webinar series to educate customers • Customer survey to help better understand the customers’ energy needs 17
Does Variability = Reliability? • Nicor Gas knows what we have historically delivered to meet our customers’ energy needs • What is the appropriate energy level for our customers ?
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Next Steps • Collect and analyze the survey information
