49 CFR Part 193 LNG Facility Jurisdiction 6/17/2015

Question: The abundant supply of domestic natural gas is driving development of new ways to use, process,
and transport LNG. Can PHMSA provide guidance as to which LNG facilities are regulated under 49 CFR Part
193?

Answer: The Pipeline Safety Statute codified in 49 U.S. Code § 60101, et seq, directs US DOT to establish and
enforce standards for liquefied natural gas pipeline facilities. An LNG facility is a gas pipeline facility used for
converting, transporting or storing liquefied natural gas.
Many LNG facilities are subject to the regulatory and enforcement authority of the Department of
Transportation through PHMSA. A simple but not complete test to determine if an LNG facility is regulated
under 49 CFR Part 193 is to identify both the source and the consumer of the LNG. The facility is regulated
under 49 CFR Part 193 if the LNG facility either receives from or delivers to a 49 CFR Part 192 pipeline.
49 CFR Part 193 does not apply to:
(1) LNG facilities used by ultimate consumers of LNG or natural gas.
(2) LNG facilities used in the course of natural gas treatment or hydrocarbon extraction that do not store
LNG.
(3) In marine cargo transfer systems and associated facilities, any matter other than siting pertaining to
the system or facilities between the marine vessel and the last manifold (or, in the absence of a
manifold, the last valve) located immediately before a storage tank.
(4) Any LNG facility located in navigable waters (as defined in Section 3(8) of the Federal Power Act (16
U.S.C. 796(8)).
Operators should assume an LNG facility used in the transportation of gas by a 49 CFR Part 192 pipeline is
regulated under 49 CFR Part 193 unless specifically exempted in Section 193.2001(b).

LNG facilities may be regulated by PHMSA even though they are not regulated by the FERC.

The ‘ultimate consumer’ provision provides a very limited exemption from 49 CFR Part 193. PHMSA
interpretation # PI-10-0025 provides guidance. Here is an excerpt:

During the rulemaking that led to the adoption of § 193.2001(b)(1), OPS explained that the intent of
that provision was to create an exception for "an LNG facility used by the ultimate consumer of the
product”. Likewise, in responding to a series of questions from a congressional committee, OPS stated
that the exception in § 193.2001(b)(1), was designed for "small" facilities which are "generally located
in industrial plants ... [to] serve as a supply of energy or feedstock for the plant.” Unlike these
examples, the Maine LMF facilities would be used to produce LNG for sale and distribution by truck, not
solely for onsite consumption. Therefore, OPS concludes that your client's facilities would not qualify for
the end-user exception in § 193.2001(b)(1).

Follow this link for a map of LNG Plants regulated under 49 CFR Part 193 (except mobile and temporary).

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 49 CFR Part 193 LNG Facility Jurisdiction 6/17/2015

Examples of LNG facilities to illustrate if they are or are not regulated under 49 CFR Part193:

1. Peakshaving LNG Facilities

LNG peakshaving facilities receive natural gas from
gas transmission pipelines during warm months,
liquefy the gas, and store the liquefied natural gas
until cold weather. During severe cold periods, liquid
is withdrawn from storage, vaporized, and re-
injected into the gas transmission or distribution
pipeline to meet peak winter demands for natural
gas. LNG peak-shaving plants are typically located at
strategic sites in the pipeline system. Many of these
plants were built in the 1970’s and are located in the
northeast. Peakshaving facilities are regulated
under 49 CFR Part 193.
Peakshaving LNG Facility, Minnesota
(Source: Used with permission from Quest Consultants Inc.)
2. Satellite LNG Facilities
Satellite LNG facilities have storage and vaporization capabilities
but do not include process equipment to liquefy the natural gas
into LNG. Satellite facility storage tanks are vertical or
horizontal. LNG is trucked to satellite facilities. Storage of LNG is
needed for reliable supply of natural gas in areas with pipeline
capacity limitations and during peak demand periods when
demand exceeds supply. There are many satellite facilities in
the northeast. A few facilities supply the year-round demand
for natural gas in small towns. Satellite LNG facilities that inject
natural gas into 49 CFR Part 192 pipeline are regulated under
49 CFR Part 193. Satellite LNG Facility
(Source: Used with permission from Quest Consultants
Inc.)
3. LNG Marine Terminals
• LNG Export Terminals - At LNG marine export
terminals, large quantities of natural gas are
liquefied and stored for a short period before
being loaded aboard specialized tanker ships
which export the LNG. There are more than a
dozen export terminals under construction. LNG
export terminals used in the transportation of
gas by 49 CFR Part 192 pipelines are regulated
under 49 CFR Part 193.

2 LNG Export Terminal - Darwin, Australia

 49 CFR Part 193 LNG Facility Jurisdiction 6/17/2015

• LNG Import Terminals - LNG tanker ships are used to supply marine import terminals with LNG. The LNG
is transferred into large storage
tanks, where it is then withdrawn,
vaporized, and supplied to interstate
pipeline system. Import only
terminals do not have facilities for
liquefying natural gas. Several import
terminals are being converted to
export terminals. Import terminals
used in the transportation of gas by
49 CFR Part 192 pipelines are
LNG Import Terminal, Trunkline LNG, Louisiana Source: US DOT PHMSA
regulated under 49 CFR Part 193.

• LNG Import/Export Terminals - There are marine terminals that are capable of both importing and
exporting LNG depending on gas supply and economic factors. Import/export terminals used in the
transportation of gas by 49 CFR Part 192 pipelines are regulated under 49 CFR Part 193.

4. Marine Cargo Transfer System

The marine cargo transfer system consists of all components
used to transfer LNG between the marine vessel and the last
downstream valve on an onshore storage tank. Other than the
siting requirements in Subpart B of 49 CFR Part 193, facilities
between the vessel and the last valve on the storage tank are
not regulated under 49 CFR Part 193.

Marine Cargo Transfer System, PT Badak, Indonesia

(Source: Used with permission from Quest Consultants
Inc.)

5. LNG Tanker or Carrier

LNG tanker ships or carriers are regulated by the
United States Coast Guard. LNG tankers and
carriers are not regulated under 49 CFR Part
193.

LNG Tanker or Carrier

(Source: Used with permission from Quest Consultants
Inc.)

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 49 CFR Part 193 LNG Facility Jurisdiction 6/17/2015

6. LNG Tank Trucks

LNG tank trucks are generally used for transporting LNG from
peakshaving plants and baseload receiving terminals to LNG
satellite facilities. LNG tank trucks are not regulated under 49
CFR Part 193.

LNG Tank Trucks

(Source: Used with permission from Quest Consultants
Inc.)
7. LNG ISO Tank Containers
LNG ISO tank containers are used to transport LNG in small quantities by rail, vessel, or truck. LNG ISO tank
containers are not regulated under 49 CFR Part 193 unless they are used as storage vessels at an LNG plant
connected to a Part 192 pipeline.

LNG ISO Tank Containers (Source: Used with permission from Corban Energy Group)

8. Mobile and Temporary LNG Facilities

LNG facilities that are small enough to be portable are often used as a way of providing natural gas to a portion
of a Part 192 gas pipeline system for peakshaving or for
gas supply during pipeline repair, assessment, or
maintenance. The mobile and portable LNG facility
pictured here consists of an LNG truck (which functions as
a delivery vehicle and a storage tank), an ambient air
and/or indirect-heated vaporizers, and associated control
equipment. These facilities are regulated under 49 CFR Mobile LNG Facility (Source: Used with permission from
Quest Consultants Inc.)
Part 193. However, these facilities need not meet all the
requirements of Part 193 under certain circumstances. Specific requirements for these facilities appear in §
193.2019.

9. Natural Gas Processing Plants

Hundreds of natural gas processing plants produce pipeline quality natural gas by removing impurities from
raw natural gas (i.e., natural gas as it comes from gas and oil wells). A few gas processing plants produce LNG
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in order to remove nitrogen from the natural gas. They regasify the LNG and inject the resulting natural gas
into transmission pipelines. If the LNG is not stored, 49 CFR Part 193 does not apply to the LNG facility due to
the exception in § 193.2001(b)(2).

10. Small-Scale LNG Applications

The non-traditional LNG applications, sometimes referred to as ‘small-scale LNG’, are expanding.

a. Distributed LNG Production – Applications for small scale LNG at much lower than historic production
rates, some as small as 1,500 gallons per day, can be sited at many locations. Flare gas recovery, coal mine
methane, coal bed methane, flare gas, and bio-LNG may be viable sources of natural gas for liquefaction
through a small-scale process. LNG may be produced at stranded gas fields, areas without access to 49 CFR
Part 192 infrastructure. Small scale LNG production may be conducted anywhere on a gas distribution
system. If a 49 CFR Part 192 pipeline is the source of the natural gas or receives the natural gas, the
facility is regulated under CFR 49 Part 193. If the LNG is used in the course of gas treatment or
hydrocarbon extraction and the LNG is not stored, the facility is not regulated under 49 CFR Part 193.

Small-Scale LNG Production System (Source: Used with permission from Dresser-Rand Company, Olean, New York)

b. Agriculture and Industry On-site Storage and Regasification – LNG facilities that store and vaporize LNG
produced on-site or LNG supplied by another transportation mode would not be regulated under CFR 49
Part 193 when the LNG is consumed solely by the LNG facility owner.
c. Consumption in LNG Powered Equipment - Vehicle fuel – Heavy duty trucks, buses, ships, railroad
locomotives, and mining vehicles may have dual fuel systems (LNG and diesel), or may convert or replace
diesel and other distillate fuel systems with LNG systems. The vehicles consuming the LNG are not
regulated under 49 CFR Part 193.
d. Satellite LNG Facility - LPG to LNG Conversion – LNG may be used as a substitute for liquefied propane gas
(LPG) to supply remote communities not served by the interstate pipelines. The community is served from
a central storage facility where the LNG is vaporized and delivered via pipeline to customers. Since the
pipelines are regulated under 49 CFR Part 192, the LNG facility would also be regulated under 49 CFR
Part 193.

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 49 CFR Part 193 LNG Facility Jurisdiction 6/17/2015

e. Marine Vessels - LNG has traditionally been transported by large ships for use as utility gas supply. Within
the marine industry, LNG demand and transportation is being driven by emissions regulations as well as
economics. LNG is being used for bunker and propeller fuel. LNG is also being transported to fuel ships via
smaller bunker barges. Vessels
consuming LNG fuel or transporting LNG
are not regulated under CFR 49 Part 193.

LNG Bunker Barge (Source: Used with permission from LNG America)

f. LNG Refueling Stations - These LNG

facilities operate as refueling facilities
for vehicles that use LNG for fuel. The
vehicles range from fleets of public
buses, to ground support vehicles at
airports, to railroad locomotives. The
LNG is delivered by truckload. These
facilities are not regulated under 49
CFR Part 193.

LNG Fueling Station (Source: Used with permission from Quest Consultants Inc.)
g. LNG Depots - Transporting
LNG by vessel, truck, or rail is an alternative to supply locations where no pipeline infrastructure is
available or the LNG is used as a final product.
• LNG Marine Depot - Marine terminals are staging areas where LNG can be placed at major ports
or waterways for subsequent distribution to
customers. Each marine depot will have
storage capacity for the region and is
designed to be flexible and scalable. They
are capable of loading LNG bunker barges,
trucks, ISO containers, and third-party
vehicles. They will also serve as fuel stops for
towboats and other small marine craft in the
area. This facility is not regulated under 49
CFR Part 193.
LNG Marine Depot (Source: Used with permission from LNG America)

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• LNG Inland Depot (LNG Distribution Centers) - Inland depots are land-based and designed to meet
customers’ needs by creating a centralized location to source LNG for a given region. With variable
storage capacity through the use of ISO
containers, the inland depots are placed
where customers can source LNG for
regional demand. This facility is not
regulated under 49 CFR Part 193.

LNG Inland Depot (Source: Used with permission from LNG America)

h. Floating Liquefaction Facility – One floating LNG export facility has been proposed in the United States.
The facility is comprised of four components: a natural gas pipeline (CFR 49 Part 192), onshore meter and
compression facilities, offshore fixed mooring structure (platform), and an offshore floating facility for pre-
treatment, liquefaction and storage. The floating liquefaction facility is regulated under 49 CFR Part 193
if it is being supplied by a 49 CFR Part 192 pipeline. Floating facilities are not regulated under 49 CFR Part
193 if they are in navigable waterways due to the exception in § 193.2001(b)(4). Generally, a floating
facility will be in water deep enough and far enough from the coast line such that it will be in navigable
waterways, in which case the U.S. Coast Guard is the authority having jurisdiction.
i. Floating Gasification Facility – A floating gasification facility would be used in areas where near-shore LNG
vessel access is not possible due to depth restrictions or where onshore congestion would preclude it. The
LNG is vaporized on the vessel and transferred to the onshore pipeline. The floating gasification facilities
are regulated under CFR 49 Part 193 if the LNG facility supplies gas to a pipeline regulated under 49 CFR
Part 192. Floating facilities are not regulated under 49 CFR Part 193 if they are in navigable waterways
due to the exception in § 193.2001(b)(4).
j. Oil and gas drilling equipment – Satellite LNG plants provide fuel to power drill rigs in place of diesel. If the
LNG is consumed by the power drill rigs, the plant is not regulated under 49 CFR Part 193 due to the
exemption for the ‘ultimate consumer,’ even if the source of natural gas is a 49 CFR Part 192 pipeline.
k. Off grid power generation – LNG fueled distributed power plants that are supplied by 49 CFR Part 192
pipelines are regulated under 49 CFR Part 193 unless the power plant qualifies for the ‘ultimate consumer’
exemption in 193.2001(b)(1). Power plants where the LNG was supplied by means other than a 49 CFR
Part 192 pipeline would not be regulated under 49 CFR Part 193.