Expanding Your Distribution Network Beyond the Transmission Pipeline

1. Expanding Your Distribution Network Beyond the Transmission Pipeline

2. What is a “Virtual Pipeline”? • Compressor site on pipeline • Full trailer • Customer offloading facility • Empty trailer returns for refilling

4. What is a Gas Island? • Isolated distribution network of pipeline connects users within a defined area • Industrial • Commercial • Residential • Offloading station feeds isolated distribution network that services end users • “Virtual pipeline” of tractor trailers delivers compressed natural gas (CNG) to the offloading station

5. Gas Island PartnershipLDC Responsibility • Constructs, owns, and operates the gas island distribution network • May or may not provide natural gas to the gas island • Maintains relationship with customer, including direct billing

6. Gas Island Partnership Virtual Pipeline Provider Responsibility • Constructs and operates the offloading station • LDC or “virtual pipeline” provider may own offloading station • Sources natural gas from LDC or independently • Compresses natural gas, loads, and transports it by tractor trailer to offloading station • Provides service 24/7 • Removes offloading station equipment when or if gas island is connected to the rest of the pipeline network

7. Why Build a Gas Island? • Serve new customers in advance of planned transmission pipeline extension • Distribute to new customers not feasible to serve with traditional pipeline extension • Encourage economic development and preserve jobs

8. Why Build a Gas Island? • Generate revenue from customers in advance of transmission pipeline construction • Reduce time to market

9. First-in-the-Nation Gas Island • Vermont Gas Systems (VGS) developed a local distribution network to serve customers in advance of their planned transmission pipeline extension • VGS chose NG Advantage (NGA) as its “virtual pipeline” service provider • Gas island launched in 2015 - Middlebury, Vermont

10. First-in-the-Nation Gas Island • VGS supplies natural gas to NGA • NGA compresses natural gas and transports it to offloading site • VGS bills customers and maintains direct relationship with them • Almost six miles of low pressure piping connects a large dairy processing cooperative, a hard cider producer, a college, and hospital

11. What are the Logistical Challenges? • Investing - capital requirements • $5,000,000 - $10,000,000 per compressor station • $500,000 for carbon fiber trailer • Optimizing trailer capacity when filling trailers in heat and cold • Emptying trailers completely • Managing just-in-time routing of trailers

12. What are the Technological Challenges? • Sophisticated real-time data management requirements • SCADA tools for knowing when trailer is full or empty and when system needs to switch over to 2nd trailer • Telemetry on trucks and compressors • Telemetry to monitor customer sites • Video to monitor and assist drivers

13. SCADA

14. What are the Reliability Challenges? • Guarantee of firm service, when needed • Adequate storage to cover several days of operation • CNG , LNG • Redundancy • Backup supply contingent upon requirements of customer base