The purpose of this project is to enhance the reliability and effectiveness of existing distribution assets and increase off-pipeline market availability of natural gas using satellite liquefied natural gas (LNG) production, distribution, and storage. The target size of this small-scale LNG plant is 40,000 gal/day.

New York State Electric and Gas Corporation, Binghamton, New York 13902

A distributed LNG production, distribution, and storage system can provide underutilized, relatively low-cost, in-state, natural gas with the technical, environmental, and economic benefits of an LNG network. This will allow wider (and cost-effective) distribution of New York natural gas to existing pipeline customers, new off-pipeline customers, and existing and expanded Alternate Fuel Vehicle (AFV) fleets. The ability to integrate existing and new natural gas wells in central New York, whose production can be limited by existing pipeline infrastructure with LNG production, storage, and distribution network, is a technology solution that will enhance the availability of natural gas and improve utilization of sometimes stranded in-state resources.

This project will design and construct an integrated natural gas liquefaction plant and distribution system to demonstrate the technical, operational, economic, and environmental advantages of a combined liquefied and compressed natural gas (L/CNG) capability. The project tasks necessary to commission and operate a satellite LNG facility include permitting, licensing, siting, construction, and assessment of the costs and benefits of distributed LNG capability.

Benefits 
Demonstration of the technical, operational, economic, and environmental advantages of a combined liquefied and compressed natural gas (L/CNG) capability will help to broaden the commercial use of such facilities, enhancing the availability of natural gas to a wider group of consumers.

Idaho National Laboratory’s (INL) small-scale technology was selected for demonstration at two New York sites: liquefaction facility (Watkins Glen, NY) and peaking shaving facility (Oneota, NY). Leases were acquired for the primary liquefier site, technology was transferred to Hanover Corporation and potential LNG markets were evaluated. An emergency preparedness training manual for LNG facilities was prepared and draft regulations for LNG storage were authored, to be implemented by the NY Department of Environmental Conservation. 

In January 2007, NYSEG and Hanover representatives met with DOE to request a no-cost extension of the project. The contract was extended for another two years to allow for construction and start up of the project.. The start of construction was delayed due to the absence of regulations in New York allowing storage of LNG.

In October 2007, NYSEG updated its LNG cost estimate, and prepared a revised economic analysis for executive approval. A meeting with the NY Governor's office was conducted in March 2008 to pursue a solution to the delay in rulemaking by the New York State Department of Environmental Conservation (DEC) pertaining that would legalize storage of LNG in the state.

On December 3, 2008, the DOE Project Officer and the NYSEG project coordinator discussed the status of this project. Due to continued delays in DEC rulemaking; no longer expected before Spring 2009 and because the original demonstration site has now been sold and is no longer available, it was determined to discontinue this project and to obligate the federal funds. No federal funds were spent on this project.

The final report listed below under "Additional Information" provides a summary of activities that occurred over the five year period of the project.

$600,000

$1,530,300

NETL – Robert Vagnetti (Robert.vagnetti@netl.doe.gov or 304-285-1334)
NYSEG – Lisa Hoffman (lisa.hoffman@energyeast.com or 607-762-5913)

Project Final Report [PDF-100KB]