Interpretation Response #PI-22-0007

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

Interpretation Response Details

Response Publish Date: 06/14/2022

Company Name: New Fortress Energy

Individual Name: Mr. Brannen McElmurray

Location State: NY Country: US

View the Interpretation Document

Response text:

Mr. Brannen McElmurray
New Fortress Energy
111 W 19th Street, 8th Floor
New York, NY 10011

Dear Mr. McElmurray:

In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), dated March 28, 2022, you requested an interpretation of the Federal pipeline safety regulations in 49 Code of Federal Regulations (CFR) Part 192 with respect to the applicability of § 192.1 for a pipeline connecting a micro-fuel handling facility (facility) to the Puerto Rico Electric Power Authority power plant in San Juan, Puerto Rico.

You stated that the facility receives liquefied natural gas (LNG) from a vessel and then vaporizes the LNG into gas which flows through a 75-foot length pipeline that connects the facility to the power plant. The 75-foot length pipeline operates at a hoop stress of greater than 20 percent of specified minimum yield strength (SMYS), and there is no LNG storage within the facility. You referred to an August 2010 PHMSA interpretation letter to the Illinois Commerce Commission to support your opinion that the 75-foot length pipeline from the source of natural gas to the power plant is not regulated by the Federal pipeline safety regulations. You ask PHMSA's interpretation whether your 75-foot length pipeline is subject to the 49 CFR Part 192 requirements.

In response to your request the following definitions from § 192.3 are reprinted:

Operator means a person who engages in the transportation of gas.

Transmission line means a pipeline, other than a gathering line, that:
(1) Transports gas from a gathering line or storage facility to a distribution center,
storage facility, or large volume customer that is not down-stream from a distribution center;
(2) operates at a hoop stress of 20 percent or more of SMYS; or
(3) transports gas within a storage field.

NOTE: A large volume customer may receive similar volumes of gas as a distribution center, and includes factories, power plants, and institutional users of gas.

Your interpretation request heavily relies on PHMSA's 2010 interpretation to the Illinois Commerce Commission. As we noted in that interpretation, the letter reflected the agency's current application of the regulations to the specific facts presented by the person requesting the clarification without legally enforceable rights or obligations. The 2010 interpretation addressed questions regarding the ultimate consumer and pipelines within the consumer's properties, including in-plant piping. PHMSA is consistent in applying regulatory requirements to pipelines up to the point where pressure control changes from the pipeline operator to the consumer facility which can be on the grounds of the facility.

Unlike the facts presented in the 2010 interpretation, New Fortress Energy is not the end user of the gas, and its pipeline is not used to move gas between its own facilities. New Fortress Energy is transporting gas from its source to the ultimate consumer (i.e., the power plant) who purchases the gas. Therefore, New Fortress Energy is engaged in the transportation of gas by pipeline.

The regulatory requirement for the pipeline operator ends at the point where the gas transmission pipeline delivers gas or transfers gas to an end user (customer or power plant) at the power plant's facility which could be on the grounds of the power plant facility. The New Fortress Energy pipeline from the source of gas (vaporizers outlet piping) to the point where it delivers gas to the power plant facility is regulated by the Federal pipeline safety regulations as a transmission line based on the § 192.3 ((2) operates at a hoop stress of 20 percent or more of SMYS) definition of a transmission line.

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