Northern Border Pipeline Could Reject US Natural Gas If ND Producers Don't React -- September 5, 2020

 From Geoff Simon's top stories of the week:

A tariff pending before the Federal Energy Regulatory Commission may place limits on the heat content of natural gas in the Northern Border Pipeline.

Justin Kringstad, director of the ND Pipeline Authority, told members of the ND Industrial Commission this week that the tariff would allow Northern Border to reject any gas that exceeds 1,100 BTU per cubic foot.

That could be a problem for North Dakota producers because natural gas produced in North Dakota is rich in ethane and other natural gas liquids.

Kringstad said the gas must be processed to remove those NGLs to reduce its heat content to the 1,100 BTU level.

North Dakota gas now makes up about 80 percent of the total moving through the Northern Border Pipeline, and "signs are pointing toward North Dakota being almost the exclusive shipper in the next three to six years," Kringstad said. He said achieving the 1,100 BTU threshold would require the removal of additional 80,000 bbl/day of ethane by the year 2027.

Industry sources say the ideal heat content for natural gas is between 950 and 1,100 BTU/cubic foot. Gas that burns hotter can damage appliances and other equipment that burn it. Kringstad said Northern Border interconnects with several downstream pipelines that limit heat content to 1,100 BTU or less.

"The downstream folks are concerned that North Dakota's gas is getting too hot," Kringstad said. "The marketability and safety issues downstream are what's driving pressure on Northern Border to implement the tariff change."

North Dakota may have a little time to adapt if FERC approves the new tariff. Kringstad said the change would not be immediate because the tariff would be phased in, starting at 1,155, stepping down to 1,140 and eventually down to 1,100. He said the near-term solution is balancing the hotter gas going into the pipeline with dryer gas that has had most of its liquids removed. Kringstad said one other possibility he's exploring that could provide opportunity to electric generators is injecting hydrogen gas in the pipeline.

Fascinating story on so many levels.