Natural Gas Interchangeability Integrating supply diversity and enduse

Natural Gas Interchangeability Integrating supply diversity and end-use predictability Jennifer Baber Deegan Federal Regulatory Affairs Washington Gas Light Company April 28, 2004

Washington Gas Light Company (WGL) g Natural gas local distribution company serving Washington D. C. and the surrounding metropolitan region in Maryland Virginia g 970, 000 customers; 90% residential g 1. 7 Bcf peak day requirement; 100 MDth per day base load g 20+ gate stations connect WGL with four upstream interstate natural gas pipelines

Washington Gas System Profile Gate Stations on CPLNG pipeline 1 Centreville 2 White Plains 3 Gardiner Road 4 Chalk Point 5 Prince Frederick 6 Patuxent 1 2 3 4 5 6 Cove Point WGL has 6 Direct-Connect Gate Stations on the Cove Point LNG pipeline the Transco, DTI & TCO Gate Stations are downstream of Cove Point

Dominion Cove Point LNG §January 2001 Reactivation Application n 7. 8 Bcf LNG Storage Capacity n 1 Bcf/day Sendout Capacity n. Reactivation Summer 2003 §Washington Gas protest n. Natural gas interchangeability concerns n. Lack of competitive alternatives to LNG imports §FERC reactivation authorization, but without quality ranges desired by Dominion Cove Point and LNG importers

Dominion Cove Point Initial Gas Quality Criteria § Maximum high heating value (HHV) of LNG received: 1138 Btu/scf(dry basis) n At Cove Point’s option, higher HHV permitted to be received n But only if can be modified to meet sendout criteria (below) § Maximum HHV of vaporized LNG sent out: 1100 Btu/scf n Prior to sendout, inject with nitrogen as necessary to lower HHV to 1100 Btu/scf n Maximum nitrogen in sendout gas: 4. 0% § Specific composition limits typical of domestic pipeline tariffs (e. g. maximum 1. 0% CO 2 ; 0. 02% O 2)

Btu Interchangeability Expected high Btu of LNG relative to WGL history of traditional supply WGL More heavy hydrocarbons can produce undesirable combustion characteristics WGL • Carbon monoxide production • Reduced appliance life • Environmental compliance implications Source: TIAX Interchangeability Assessment for WGL’s Service Territory July 7, 2003 Final Report (Cove Point LNG Docket No. CP 01 -76)

Potential Changes in Combustion with the introduction of LNG § Thermal effects Normal n. Greater or lesser heat input compared to rating n. Potential for thermal stress §Lifting n. Gases with higher inerts have lower average flame velocity n. May become less than velocity of gas through burner ports -- flame will lift §Flashback n. Gases with higher flame velocity (e. g. hydrogen) n. May burn back through ports into burner Lifting

Potential Changes in Combustion with the introduction of LNG §Yellow-tipping n. Higher heating value gases need more primary air n. Lower ratio of primary air to fuel leads to flame yellowing and elongation, impingement on surfaces, sooting §Incomplete combustion n. Can occur alone or in combination with the above n. Excessive production of carbon monoxide n. Particularly critical with unvented appliances (cooking, fireplaces, heaters) Yellow-tipping

Maintaining end-use predictability and supply diversity § WGL seven step approach focused on field and lab testing § Provided a method to manage diversity in LNG sources with a minimum investment in blending and dilution facilities

WGL Interchangeability Approach 1. Identify Historical Range n. Variation can serve as a benchmark for tolerances n. Evaluate length of time of sustained extreme conditions n. Evaluate impact of other resources onsystem and downstream 2. Determine the appliance characteristics of the affected area 3. Select representative appliances for testing

WGL Interchangeability Approach 4. Establish baseline appliance performance criteria 5. Lab test actual consumer appliances from impacted area and new appliances n. Rates of CO production n. Yellow-tipping characteristics n. Sooting potential n. Lifting tendencies 6. Identify supply and dilution combinations that produce results comparable to the baseline 7. Translate supply source’s molecular components and dilution combinations into quality criteria

Dominion Cove Point LNG Interchangeability Settlement § 5 -Party Agreement between WGL, Dominion Cove Point LNG and LNG importers §Interchangeability study conducted based on an agreed -upon methodology n. Provided information to all parties that a wider range of interchangeability results can be incorporated §Competitive alternative provided (Cove Point East CP 03 -74) §Interchangeability limits for delivery to WGL incorporated into the Dominion Cove Point LNG tariff n. Yellow-tipping n. Lifting n. Incomplete Combustion n. Heating Value (Btu) §Natural gas quality monitoring capability established n. Monitor hourly n. Remedy within 3 hrs

Natural Gas Quality & Interchangeability Quality - Merchantable; operator flexibility g. Btu range g. Objectionable Properties g Particles, liquid or solid matter g Hydrogen Sulfide g Sulfur g Nitrogen g Carbon Dioxide g Oxygen g Harmful Contaminants g Bacteria or bacterial agent g Molecular Structure g Hydrocarbon Dew Point (HDP) Interchangeability - Extent to which a substitute gas can replace the gas normally used and produce similar combustion characteristics

Lessons Learned Local, historical natural gas characteristics are the starting point for developing interchangeability indices because every market developed differently Heating value is not the sole factor for determining interchangeability; the ratio of heavier hydrocarbons to methane must be considered Current pipeline tariff gas quality ranges/limits do not necessarily reflect the actual historic gas quality at the appropriate level of detail Burner-tip solution is not viable and would limit future access to alternative supplies No broad assumptions can be made about the ability of design certified appliances to operate with a wide variety of gases absent field testing Interchangeability indices can provide flexibility for alternative supplies while facilitating greater predictability in appliance response to variations in gas supply