[Federal Register Volume 61, Number 103 (Tuesday, May 28, 1996)]
[Notices]
[Pages 26509-26510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13217]



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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. CP96-517-000]


Algonquin LNG, Inc.; Notice of Application

May 21, 1996.
    Take Notice that on May 13, 1996, Algonquin LNG, Inc. (Algonquin 
LNG), 1284 Soldiers Field Road, Boston, Massachusetts, 02135, filed in 
Docket No. CP96-517-000 an application for a certificate of public 
convenience and necessity under Section 7(c) of the Natural Gas Act 
(NGA) and a request for abandonment of services and facilities under 
Section 7(b) of the NGA. Algonquin LNG seeks authorization for new 
services and facilities so that it will have the enhanced flexibility 
to receive from its customers natural gas to be liquefied and stored as 
liquefied natural gas (LNG), and to withdraw and deliver, as requested 
by its customer(s), such natural gas in liquid or gaseous form. 
Algonquin LNG's proposal is more fully set forth in its application 
which is on file with the Commission and open for public inspection.
    Specifically, Algonquin LNG seeks authorization to:
    (1) acquire, own, and operate existing pipeline facilities for the 
purpose of connecting its storage facility to the interstate pipeline 
grid;
    (2) construct, own, and operate new pipeline, liquefaction, high-
pressure vaporization, metering, and ancillary facilities; and,
    (3) provide an enhanced LNG firm and interruptible handling 
service, which will include natural gas liquefaction, LNG storage and 
LNG vaporization on an open access, self-implementing blanket basis.
    Algonquin LNG also wants the Commission to:
    (4) approve the terms and conditions of a restated and revised FERC 
Gas Tariff;
    (5) approve a Blanket Certificate under Part 157, Subpart F, of the 
Commission's Regulations for the construction from time to time of 
eligible facilities other than those at the LNG plant site; and,
    (6) authorize the abandonment, pursuant to Section 7(b) of the NGA, 
of the services it presently provides, and the low-pressure vaporizers 
and certain other facilities currently in service at Algonquin LNG's 
site.
    Algonquin LNG currently owns and operates a 600,000 barrel LNG 
storage facility located at a site on the west bank of the Providence 
River in Providence, Rhode Island. Algonquin LNG utilizes such LNG 
storage facility to provide firm and interruptible open access LNG 
storage and vaporization service approved under Part 284 of the 
Commission's regulations pursuant to Algonquin LNG's Rate Schedules 
FST-LG and IST-LG. Algonquin LNG says that its current LNG plant does 
not have direct access to the interstate pipeline grid, but that 
vaporized LNG is delivered into the interstate system via displacement 
through the local distribution facilities of Providence Gas Company 
(Providence Gas).
    Algonquin LNG proposes by this application to enhance its LNG 
storage services by installing liquefaction capability at its LNG plant 
and to establish a direct connection to the interstate pipeline grid. 
Algonquin LNG will acquire two 10-inch lines under the Providence River 
near its LNG plant from Providence gas and will construct one mile of 
new 20-inch line to connect the river crossing with Algonquin Gas 
Transmission Company's (Algonquin Gas) mainline.\1\ Algonquin LNG will 
also construct liquefaction facilities capable of liquefying natural 
gas at a rate of 40,000 MMBtu/d, and

[[Page 26510]]

vaporization facilities with a vaporization capability of 375,000 
MMBtu/d. Further, Algonquin LNG will construct various metering 
facilities, control and monitoring systems and other miscellaneous 
facilities. No changes to tank storage although Algonquin LNG intends 
to conduct a thorough inspection of the internal components of the tank 
and perform any necessary maintenance. The total cost of all of this 
work is estimated to be $75.7 million, including the acquisition cost 
of the river crossing pipelines.
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    \1\ Algonquin Gas proposes to rebuild the East Providence meter 
station under its Subpart F blanket certificate and associated 
environmental requirements. Algonquin LNG will pay for the rebuild.
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    Algonquin LNG proposes to provide its new open access LNG handling 
service under the terms of its proposed Second Revised Volume No. 1--
FERC Tariff, which is contained in Exhibit P of the application. 
Algonquin LNG says that the open access provisions of its former Volume 
No. 1--FERC Tariff have been replicated in the new tariff. Algonquin 
LNG says that the new tariff will control the nomination and scheduling 
of liquefaction and vaporization and may, under certain conditions, 
subject customers to operational flow orders. The tariff consists of a 
firm service rate schedule and an interruptible rate schedule, plus 
general terms and conditions and pro forma service agreements.
    The proposed initial rates for Algonquin LNG's firm and 
interruptible services are based on a straight fixed-variable cost 
classification. The reservation fee has been designed on the basis of 
storage tank capacity. The vaporization and liquefaction services will 
subject the customers to fuel use retainage factors and adjustments. 
The rate base underlying the proposed initial rates is based on the 
estimated capital cost of $75.7 million, plus the net book value as of 
November 1, 1997, of the existing facilities that will be used as part 
of this proposal. The cost of service underlying the proposed initial 
rates was developed utilizing the capital structure of Algonquin LNG's 
parent Algonquin Gas and the cost of capital, as approved in Algonquin 
Gas's most recent rate settlement, along with a proposed depreciation 
rate of 3.33 percent.
    Algonquin LNG says that interruptible customers will pay a unit 
rate equal to the cost that a firm customer would incur for storage of 
one barrel of LNG for one year, but that no costs have been allocated 
to interruptible service. Instead, the tariff provides for crediting to 
firm customers of 90 percent of revenues received for interruptible 
storage and services.
    Algonquin LNG says that the available capacity of the project, 
592,000 barrels of LNG storage, has been fully subscribed. Providence 
Gas has signed a binding precedent agreement obligating it to sign a 
service agreement for 349,452 barrels. EnergyPlus Marketing Company 
(EnergyPlus), an affiliate of Algonquin LNG via parent company 
PanEnergy Corp., has signed a binding precedent agreement obligating it 
to sign a service agreement for 242,548 barrels, the remainder of the 
available capacity. Therefore, Algonquin LNG says that it has satisfied 
all of the conditions required to avoid an ``at risk'' condition. Both 
Providence Gas and EnergyPlus will be responsible for obtaining gas 
supplies.
    Algonquin LNG says that the existing Algonquin Gas system would 
function as both the upstream and the downstream connection to the 
proposed new facilities, depending upon whether Algonquin LNG is 
functioning in the vaporization or liquefaction mode. There is capacity 
on the Algonquin Gas system to take gas away from the Algonquin LNG 
Interconnect. Thus, no downstream capacity needs to be installed on the 
Algonquin Gas pipeline to support peak day vaporization operations of 
the Algonquin LNG facility.
    Algonquin LNG says that the environmental impact of the proposed 
project will be minimal. Most of the construction will take place 
within a site that has been dedicated to industrial use for over a 
century. It says that the use of the existing Providence Gas-owned 
river crossings will further minimize the environmental impacts of the 
project. It further says that the environmental impacts associated with 
the 1 mile of 20-inch pipeline on the east side of the river will be 
minimal as a result of the location of a substantial portion of the 
pipeline within or adjacent to existing right-of-way corridors. 
Algonquin LNG also says that any impacts of the operation of the plant 
would be little affected by the proposed plant modifications and that 
the use of electric compressors and pumps will limit air and noise 
emissions from the site.
    Any person desiring to be heard or to make any protest with 
reference to this application should on or before June 12, 1996, file 
with the Federal Energy Regulatory Commission, Washington, D.C. 20426, 
a motion to intervene or a protest in accordance with the requirements 
of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 
385.211) and the Regulations under the NGA (18 CFR 157.20). All 
protests filed with the Commission will be considered by it in 
determining the appropriate action to be taken but will not serve to 
make the protestants parties to the proceeding. Any person wishing to 
become a party to the proceeding or to participate as a party in any 
hearing therein must file a motion to intervene in accordance with the 
Commission's Rules.
    Take further notice that, pursuant to the authority contained in 
and subject to the jurisdiction conferred upon the Commission by 
Sections 7 and 15 of the NGA and the Commission's Rules of Practice and 
Procedure, a hearing will be held without further notice before the 
Commission or its designee on this application if no motion to 
intervene is filed within the time required herein, if the Commission 
on its own review of the matter finds that a grant of the certificate 
is required by the public convenience and necessity. If a motion for 
leave to intervene is timely filed, or if the Commission on its own 
motion believes that a formal hearing is required, further notice of 
such hearing will be duly given. Under the procedure herein provided 
for, unless otherwise advised, it will be unnecessary for Algonquin LNG 
to appear or be represented at the hearing.
Lois D. Cashell,
Secretary.
[FR Doc. 96-13217 Filed 5-24-96; 8:45 am]
BILLING CODE 6717-01-M