A small-scale LNG project that Philadelphia city leaders approved recently is expected to provide up to 120,000 gallons of LNG per day for power generation and industrial use in the southeastern Pennsylvania area.
Philadelphia City Council on Thursday approved a plan to allow the creation of the Passyunk Energy Center (PEC) on the site of an existing natural gas receipt, storage, and distribution facility owned by Philadelphia Gas Works in southwestern Philadelphia.
The project, one of a growing number of small-scale LNG projects springing up across the country to serve niche markets for the fuel, will be built and operated under a public-private partnership agreement between the city and PEC, owned by privately owned Liberty Energy Trust.
Under the partnership agreement, PEC will build a liquefaction plant, as well as truck-loading and unloading infrastructure, within the footprint of PGW's existing Passyunk Plant. The plant will source its feedgas from the PGW system.
PGW will operate the LNG plant and sell related services to PEC. The contract allows PEC to sell LNG produced from the plant to its customers in the region, with PGW earning up to $4 million per year through fees and revenue sharing.
In a statement, PGW said its customers would benefit "from up to $100 million in new revenue" over the 25-year lifetime of the project.
"PGW's public-private partnership with Liberty Energy Trust ensures the continuation of our core mission, increases system reliability, produces ongoing new revenue, delivers meaningful environmental benefits, secures jobs, and protects ratepayers from financial risk," the statement says.
The project's is slated to go into operation in November.
PGW HOLDS 4.3 BCF OF LNG STORAGE
Under the contract PEC will have first priority to have PGW process, store and cycle up to 2.7 Bcf of LNG per year through the Passyunk Plant.
Between the Passyunk Plant site and another PGW-owned site in the city, PGW owns about 4.3 Bcf of LNG storage capacity, the largest dedicated LNG storage capacity on the East Coast owned by a single entity.
The proposed Passyunk Energy Center is one a new generation of Small-scale LNG projects, whose liquefaction rates typically range from 10 MMcf/d to 20 MMcf/d, springing up across the US.
With the growth of gas production from shale plays, these plants, which have typically been used to provide LNG as a peak-shaving fuel for power plants, are being built to serve new markets for LNG, for use as a maritime fuel, for manufacturing facilities, to power railroad locomotives or for other uses.
