Interpretation Response #PI-16-0011

Below is the interpretation response detail and a list of regulations sections applicable to this response.

Interpretation Response Details

Response Publish Date: 12/08/2017

Company Name: Counsel to North Dakota LNG, LLC

Individual Name: Mr. Greg H. Williams

Location State: MD Country: US

View the Interpretation Document

Response text:

October 23, 2017

Mr. Greg H. Williams
Counsel to North Dakota LNG, LLC
TemcoLegal, LLC
10440 Little Patuxent Parkway
Suite 300
Columbia, MD 21044

Dear Mr. Williams:

In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), dated August 12, 2016, you requested an interpretation of 49 CFR Part 193. Specifically, you requested an interpretation regarding the applicability of § 193.2001 to the North Dakota LNG LLC's (ND LNG) liquefied natural gas (LNG) facility located in Tioga, North Dakota.

In the letter, you stated:

The LNG facility in question is an LNG liquefaction plant, consisting of 3 production trains - two smaller N2 expander plant trains, and one larger mixed-refrigerant liquefaction train. The liquefaction trains share common LNG storage and truck loadout. Across the street from the ND LNG Facility is a Hess gas processing plant, which is the source of the natural gas feedstock for the ND LNG Facility. An underground pipeline runs from the Hess gas processing plant to the ND LNG Facility. The pipeline is owned by the Hess processing plant up to the meter located on the ND LNG property. LNG is unloaded from two 60,000 gallon storage tanks on the ND LNG property into transport trailers for truck transportation. The majority of the LNG is consumed on relatively nearby drill sites (within 200 miles of the LNG Facility).

ND LNG, owner of the ND LNG Facility, purchased the two smaller N2 expander trains from a prior owner/operator and moved them to the current location. ND LNG hired a third party to: prepare the current site, assemble the two expander trains that were relocated to the current site in addition to assembling the new mixed-refrigerant train.

Additionally, on September 30, 2016, you provided the following additional information via email:

(1) Hess receives the gas from wells in the Williston Basin and refines the gas at its processing plant.

(2) The underground pipeline is about 2000 feet long in total length and Hess owns nearly all of it.

(3) The portion of the underground pipeline Hess owns runs under a public roadway.

(4) Fifteen percent of the LNG produced is picked up at the plant and shipped out of state (via truck), most of the time fuel for plant outages in other states or temporary projects. During the summer the plant ships a few loads a week to asphalt plants in Minnesota. Also, the facility has shipped LNG to coal mines in Colorado, pipeline outage projects in Canada, and has shipped about 20 loads over the past year to a BNSF rail yard for a pilot project to power trains with LNG.

(5) A layout of the LNG facility and the processing plant map is provided.

To such an extent that ND LNG has been able to determine, the prior operator had not explored whether DOT regulation apply to the LNG facility. Moreover, ND LNG has not been able to determine whether PHMSA regulations apply to the Hess processing plant. Therefore, based on the aforementioned information, ND LNG requests an interpretation of § 193.2001.

The LNG facility is regulated under 49 CFR Part 193 if the LNG facility either receives from or delivers to a 49 CFR Part 192 pipeline except when it meets the requirements in 193.2001(b). Typically, the processing and liquefaction plants are collocated and operated by one operator. In the case of the ND LNG facility, the processing plant is located on property owned by Hess and the liquefaction plant is owned by ND LNG.

The Hess processing plant is not regulated under Part 192 or Part 193, but the pipeline that transports the treated gas from the processing plant to the LNG plant is regulated under Part 192. The ND LNG facility is regulated under 49 CFR Part 193 because it receives natural gas from a Part 192 regulated pipeline and converts that gas into LNG for sale and delivery to customers outside of the LNG facility. Therefore, the LNG facility is used in the transportation of gas by pipeline for purposes of § 193.2001(a).

If we can be of further assistance, please contact Tewabe Asebe at 202-366-5523.

Sincerely,

John A. Gale
Director, Office of Standards
and Rulemaking

Regulation Sections