Liquid natural gas coming to Hawaii


Hawaii Gas is in the middle of a federal permitting process to bring liquefied natural gas to the Aloha State for the first time.

But the company, formerly known as The Gas Company, won’t be bringing the fuel, which a vice president described Thursday as “cheap and abundant,” to Hawaii Island just yet.

The first phase, for which Hawaii Gas filed an application with the Federal Energy Regulatory Commission in August, would allow the company to ship liquefied natural gas from the mainland to Hawaii, where it would be stored in mobile containers and used as an emergency backup for the company’s customers who received synthetic natural gas or propane via pipelines on Oahu, Vice President for External Affairs Joe Boivin said.

“Any gas utility is going to need a source of backup,” Boivin said after a brief presentation to contractors and property managers at King Kamehameha’s Kona Beach Hotel. “It’s routine.”

Applying for the mobile storage is a process that is slightly easier than adding full LNG storage infrastructure, he said.

The cost of the investments to equip Hawaii Gas to receive and store LNG is a proprietary figure, Boivin said, as is the cost the company anticipates paying for the fuel. But the state is also working on an LNG study, which Boivin said would likely provide cost estimates for buying and shipping LNG.

“Even purchasing it on the mainland and shipping from the West Coast provides a price point (lower) than what we’re doing today,” Boivin said.

In January, Tesoro announced it intended to sell its Oahu refinery, one of the refineries from which Hawaii Gas purchases a small amount of the fuel it now distributes to customers across Oahu. That announcement, and the uncertainty about who would buy it, prompted Hawaii Gas officials to consider how they might diversify the fuel they were using or bringing in.

Boivin declined to speculate on whether the company was considering increasing its use of LNG, noting the company needed to focus on the project at hand, the emergency backup of LNG. But, he added, the company’s research did show areas where it may prove cost-effective in the future, to sell more LNG across the state. The fuel can be used in multiple markets, from power generation to cooking and heating, as well as for marine and ground transportation.

Liquefied natural gas is transported at 260 degrees below zero, is not flammable when in liquid form, weighs less than water and air and is comprised of 95 percent methane, Boivin said.