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National Grid LNG storage facility cleared to add gas liquefaction capability

A National Grid PLC subsidiary received authorization to upgrade its LNG storage facility in Rhode Island with gas liquefaction capabilities, which will allow the company to bring natural gas to the facility by pipeline instead of trucking in LNG.

The Federal Energy Regulatory Commission in an Oct. 17 certificate order authorized National Grid LNG LLC to add liquefaction equipment to its Fields Point storage facility. The order included 78 construction procedures and environmental mitigation measures.

The Fields Point storage facility is on the Providence River in Providence, R.I. The facility holds 600,000 barrels of LNG, or about 2 Bcf of gas. It provides storage, vaporization and redelivery services. Customers currently truck LNG to the facility for storage, and National Grid delivers the gas back to those customers when they call for it, usually as vapor on a pipeline and sometimes as LNG on a truck. Pipeline facilities owned by National Grid affiliate Narragansett Electric Co. are used to deliver the gas from the storage facility to the Narragansett Electric's distribution system and by displacement to Enbridge Inc.'s Algonquin Gas Transmission LLC interstate pipeline system for delivery.

According to the FERC document, "[T]he proposed project would effectively reverse this flow by enabling Algonquin to transport gas that Narragansett Electric would deliver to Fields Point to be liquefied and stored." National Grid LNG customers Narragansett Electric and another affiliate, Boston Gas Co., requested the liquefaction project.

To support the liquefaction project, Narragansett Electric would upgrade its system to provide power to the equipment.

Commissioners Richard Glick and Cheryl LaFleur, the Democrats on the panel, agreed with the decision but wrote separately to highlight the importance of evaluating greenhouse gas emissions and other environmental impacts according to the National Environmental Policy Act. They supported using the social cost of carbon to put a dollar amount on emissions impacts.

"We agree with today's finding that the liquefaction facility will not have a significant effect on the environment, particularly given the limited [greenhouse gas] emissions associated with the project," Glick and LaFleur wrote. "However, we disagree with the language in the environmental assessment that dismisses the social cost of carbon as a useful tool to inform the environmental review, stating the social cost of carbon method 'cannot meaningfully inform the commission's decision whether and how to authorize a proposed project under the [Natural Gas Act]."

In June, FERC staff issued an environmental assessment that found the liquefaction facilities, if built and operated in line with mitigation measures, would not have a significant effect on the environment. National Grid LNG applied for the project in April 2016. (FERC docket CP16-121)