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FAQ's
What is Floridian Natural Gas Storage Company, LLC?
Floridian Natural Gas Storage Company LLC (FGS) is a new energy company in Florida providing Florida's power and gas companies with a tool to enhance gas supply security, improve system reliability and develop price stability. FGS is not a power or gas distribution company, a gas importer, a natural gas producer, a gas exploration company or a gas trading company. FGS will simply rent space in its storage facility to companies that want storage service.
Where is Floridian Natural Gas Storage Company located?
Floridian Natural Gas Storage will build an above-ground gas storage tank in an industrial area north of Indiantown, Florida in Martin County on the 145-acre Florida Steel Superfund site.
Why is natural gas stored?
Natural gas storage is a tool used by gas and power companies to provide added supply to their systems on peak days, provide back up reliability, and to manage price risks. Storage can be considered a form of insurance to help manage supply and price risks and to provide flexibility.
The delivery of natural gas on a peak day is limited by the size of the gas pipelines serving an area. By storing natural gas at the end of the pipelines, most desirably near where it's consumed, additional quantities can be delivered on peak days. Storing natural gas is cheaper than building a new long-haul pipeline which may only be used for a few peak days each year. Natural gas storage also provides back up supply if there is an unexpected problem with the main pipeline. Most pipeline problems can usually be corrected in a few days. Demand for natural gas is rapidly increasing, in Florida and throughout the country. Because of growth in demand, gas supply reliability is a very important consideration for Florida. Florida's geology is unsuitable for in-ground gas storage, so the state has previously had to look to neighboring states like Mississippi and Alabama for their storage needs but these sites are still limited by the size of the pipelines to deliver quantities on peak days. The FGS site in south Florida allows it to deliver added peak day gas to most customers in Florida.
Why do we need a natural gas storage facility in Florida?
Florida is the nation's fastest growing state, by 2013 natural gas demand is anticipated to grow significantly, especially in the peak summer season for power generation. The two existing long-haul pipelines are full subscribed to meet the needs of new power plants being constructed. The customers of the pipelines have the right to use their capacity in the pipelines every day but in reality only use that full capacity a small percentage of the time. They can use these off days to deliver gas to a storage facility to use on the peak days when there may not be sufficient peak day pipeline capacity. After 2011 the need for gas on the few peak days of the summer or winter will grow substantially. Without gas storage capacity, use of other fuel sources, such as oil, will needed to meet the growing peak day loads. Gas storage in south Florida will also provide an important back-up fuel source for Florida should gas supply be interrupted by a hurricane or other unexpected curtailment.
Can natural gas storage help reduce electricity prices?
Yes. Power companies buy gas supplies on long-term and a daily basis to fuel their plants. By having gas storage in Florida the power generators will be able to buy gas when prices are low (nice weather) and store it for when its needed such as a very hot summer or very cold winter day. On those peak days they will avoid buying higher priced gas when everyone is trying to buy which will help keep power prices more stable.
When is it expected to open?
After the 4-year permitting and construction phase that began in February 2007, the FGS facility is expected to open in 2011.
Why Indiantown?
Both of Florida's natural gas supply pipelines from the Gulf Coast are nearby, allowing the gas to be delivered directly from the pipelines into storage during low-demand periods and redelivered to capacity holders when it is needed. The Indiantown Superfund site has been remediated for reuse under the direction of the federal EPA and is zoned in the County Land Use Plan for industrial facilities. The EPA has put certain future land use restrictions on this Superfund site but has approved the FGS facility as a suitable reuse for the site. Construction of the FGS facility will take a non-contributing liability and put it back into the County's useful tax base paying over an estimated $1.5 million per year.
What is liquified natural gas?
Natural gas is primarily made up of methane which is the "gas" primarily used in homes that is delivered through pipelines operated by gas local distribution companies. Liquified Natural Gas, or LNG, is natural gas (methane) in its liquid form. Many homes in Florida also use propane or butane for heating and cooking when there are no natural gas pipelines in the area. Propane and butane are stored in small tanks under high pressure next to homes and are refilled by truck deliveries. Natural gas is the same gas used for generating electricity, cooking and space heating. For increased efficiency and to use less space natural gas is refrigerated and condensed to a liquid form to be stored. Liquifying natural gas reduces its volume by more than 600 times, making it more practical and economical to store.
How is it stored?
Liquified natural gas is stored at more than 100 facilities in the United States and more than 200 worldwide. Liquid natural gas is stored at atmospheric pressure in specially constructed, double-walled, insulated tanks. The inner tank contains the liquified gas, while the outer tank contains the insulation and prevents any natural gas vapor from escaping. There are also hundreds of other below-ground natural gas storage facilities across the U.S. but Florida does not have suitable geology for storage in old gas fields or in salt structures.
What happens if there is a spill or leak?
The FGS project design will have a dike or retaining wall capable of containing 110% of the maximum tank's storage capacity. In the unlikely event of a release, this feature will prevent the liquified gas from leaving the control area around the tank. Methane is not toxic and it is lighter than air, so any escaping liquid gas would evaporate, rise and dissipate harmlessly into the atmosphere leaving no residue in or on the ground. Storage facilities use advanced monitoring systems to immediately detect any liquid or natural gas leaks and have emergency shut down (ESD) systems to isolate any such events. There are also water and foam containment systems to control any such unexpected releases.
Is liquified natural gas explosive?
In its liquid state, natural gas will not explode or burn. In a gaseous state, natural gas is not explosive if it is unconfined. Natural gas is only flammable within a very narrow range of concentrations with air. Outside of these concentrations (5-15% air), there is either not enough oxygen to sustain a flame or too much oxygen for the gas to ignite. For gas to burn there must be an ignition source and storage plants are designed to limit ignition sources near the natural gas equipment.
What is the safety record of liquified natural gas facilities?
Liquified natural gas is not a new technology; it's been in use since World War II. The industry has an excellent safety record. No serious accidents involving a liquified natural gas terminal or storage facility in the United States have occurred in over 60 years. In the U.S., there have been only a few serious workplace accidents in the history of liquified natural gas. This type of accident could happen in any industrial setting and posed no threat to the general public.
Who approves the storage facilities?
The Federal Energy Regulatory Commission (FERC) has the authority to approve or deny an application for siting, construction, and operation of liquified natural gas facilities. Other federal, local and state agencies also participate and oversee aspects of the siting, construction and operation of the facility.
What type of security measures are taken at LNG facilities?
FERC, the Department of Transportation's Pipeline and Hazardous Materials Safety Administration and the Department of Homeland Security all oversee security for liquified natural gas facilities. Since FGS does not plan to import gas or have deliveries from ships from overseas and will rely on existing pipeline transmission, security issues for this facility are not the same as for LNG terminals which import and handle large quantities of LNG via tankers. Regardless of the type of facility, security is taken seriously by everyone in the gas industry and includes fences, controlled access, guards, lighting and video monitoring. Facilities are required to have a written security plan and an emergency response plan and to conduct extensive security training of the staff.
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