LNG Peaking Feasibility Study

The City of Winfield, Kansas (City) operates municipal electric and gas systems. ERG was retained by the City to perform a study analyzing the technical, economic and financial feasibility of developing a liquified natural gas (LNG) peaking facility to provide a lower cost alternative to the City’s historical reliance upon pipeline supplies of peaking gas. In this regard, members of ERG investigated the regional availability, pricing and transportation of LNG supply, siting issues, and identified several alternative facility locations based upon land use compatibility criteria, system interconnection requirements driven by system gas flow patterns, environmental considerations, permitting requirements, economic/financial considerations, and public safety criteria. A detailed proforma financial analysis of the project was performed. Study results indicated that on a financial/economic basis the City’s continued reliance upon pipeline peaking gas supply would be preferable to development of an LNG facility owing to an estimated long-term payback driven by current steel prices, equipment fabrication costs and construction costs.

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