‘Virtual pipelines’ are connecting consumers to gas in absence of infrastructure

Entrepreneurs have fashioned a way to get natural gas to consumers awaiting a proper pipeline: Build them a “virtual pipeline” instead.

Around the country, a few small businesses have found gas-hungry consumers who can’t get what they need from the grid, either because their local pipelines are too small or because they don’t have any at all.

While residents debate whether to build pipelines, these small businesses happily transfer gas by truck. In some regions, they’ve become matchmakers for gas supply and demand because pipelines can’t be.

It may be a temporary arbitrage. Or it might not.

“It could be six years out or it could be never,” said Mary Evslin, co-founder of NG Advantage, referring to a proposed pipeline extension in North Vermont.

The local gas utility, Vermont Gas Systems Inc., argues that the pipeline would help factories, homes and businesses by letting them switch from pricey oil to natural gas. But some residents have objected — to either the fossil fuel, the pipeline routing or its cost.

The impasse has opened an opportunity for NG Advantage LLC. It buys gas at hubs connected to the grid in Vermont and New Hampshire. Then it hauls the gas to customers up to 200 miles away, using half-million-dollar big rigs.

The bigger the gas consumer and the closer it is, the more money there is to be made. NG Advantage wants customers replacing a minimum of $750,000 worth of fuel oil.

Evslin, who calls herself a “serial entrepreneur,” identified paper mills, food processors, breweries and universities as prime targets. NG Advantage recently inked a deal with Middlebury College and two nearby factories — three customers that will soon be linked by their own “island” pipeline network.

Customers have to be willing to convert equipment to natural gas, of course. But many are.

“A lot of these stranded industries are really clamoring for a way to save on their energy bills, and not pollute so much,” she said. “In this case, we’re letting them pretty immediately have access to gas. … The customers will feel that they’re on a pipeline.”

Interestingly, these “virtual pipelines” may flow shale gas — or they may not.

NG Advantage currently sources its gas from Vermont Gas’ connections in Canada, which trace back to Alberta. The company hopes to build another terminal in New York state, which would allow it to also tap into the Marcellus Shale’s prodigious supply. “Read more”


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