Interchangeability issues threaten to delay vitally needed LNG projects.
Jacob Dweck is a founder and principal of the LNG Solutions Group, providing comprehensive services to LNG stakeholders in North America, and chair of the LNG Group at Sutherland Asbill & Brennan LLP. David Wochner practices in the Energy Group at Sutherland. Contact Dweck at jacob.dweck@sablaw.com and Wochner at david.wochner@sablaw.com.
Federal Energy Regulatory Commission (FERC) Commissioner Suedeen Kelly predicted two years ago that gas composition standards would become a significant regulatory issue for the U.S. natural-gas industry. Her words were prescient, as gas from numerous new sources—including coal-bed methane, waste gas, and imports via pipelines and LNG tankers—have faced legal challenges and regulatory uncertainties over gas composition specifications. And as Kelly foresaw, these pressures notably are evident in the liquefied natural gas (LNG) industry.
“Each pending and proposed request to authorize additional LNG import facilities will require the commission to focus on the interchangeability issue,” she said in a February 2004 speech.
Gas composition questions are technical but also straightforward in nature. Nonetheless, not until the last few years was there a concerted effort to address these issues within the existing regulatory framework.