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Limited Hawaii LNG shipments not subject to federal rules

Hawaii Gas does not need authorization from federal regulators to begin shipping limited amounts of liquified natural gas to Hawaii in specialized containers, the Federal Energy Regulatory Commission ruled today.

Hawaii Gas, formerly known as The Gas Company, submitted an application to FERC in August seeking approval to ship 20 containers of LNG to Honolulu Harbor.  After unloading the LNG tanks Hawaii Gas would convert the liquid fuel back into gas form and inject it into an existing Hawaii Gas pipeline. Hawaii Gas filed its FERC application under Section 3 of the Natural Gas Act.

However, FERC in it ruling said it was dismissing the request in part because Hawaii Gas’ is not proposing to build an LNG terminal as envisioned under the Natural Gas Act. In addition, FERC’s jurisdiction under the act is limited to facilities used to import or export natural gas between the U.S. and a foreign country, according to the ruling.

“We have concluded that the proposed project would not constitute an LNG terminal as contemplated by Congress. Therefore, in this case we find no basis for asserting Section 3 authority over the described facilities or operations, “ according to the ruling.

Hawaii Gas’ FERC application was for the first segment of what it has described as a three-phase project. The company envisions later phases including larger quantities of LNG that could be used for electricity generation. Those plans include development of a commercial LNG import terminal that may require FERC approval.

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