LNG is natural gas that has been cooled to a liquid, shrinking its volume to make it 600 times smaller than the gaseous form. This process is known as liquefaction. LNG is cooled to minus-260 degrees Fahrenheit for safe storage or transport. The process of warming the liquefied product to return it to its gaseous state is called regasification or vaporization.

Generally, in the months before winter when natural gas prices are typically lower, NMGC will buy gas and move it from our system into the LNG storage tank by cooling it – a process called liquefaction. In the winter, or at other times when gas prices are high, demand is high, or when gas is otherwise needed for our operations, we can vaporize the LNG from the tank back into a gaseous state and deliver it to customers. The LNG storage facility is intended to help alleviate two conditions which sometimes affect NMGC’s operations and its customers – high natural gas prices and interrupted gas supply.

The proposed site is about two miles north of Double Eagle II Airport on the west side of the Albuquerque Metro area, within Rio Rancho city limits. The facility will occupy about 25 acres on a 160-acre property west of Atrisco Vista Boulevard that is zoned for commercial development.

The storage tank, when filled, will hold about 1 billion cubic feet (12 million gallons) of natural gas in liquid form. The tank will be about 100 feet tall and about 195 feet in diameter. There also will be buildings where natural gas is liquified for storage and later vaporized for distribution to customers, as well as a control building and access roads.

The LNG storage facility is designed as a closed system. It will not emit any methane into the atmosphere during ordinary operations. As designed, the facility takes natural gas from our system, liquefies it, stores it for later use, and then reintroduces it to our system for use by customers, all without the release of methane into the environment.

No. The facility will not emit toxic chemicals during ordinary operations. The LNG Facility operates as a closed system that takes natural gas from our pipeline, stores it, and then when needed returns it to the system. The facility is designed to have no environmental impact.

No. The LNG storage tank will rely solely on insulation.

Yes. NMGC values our ongoing partnerships and strong relationships with first responders in our communities, and we are committed to safety in everything we do.  This kind of training is required by the federal government before the facility can become operational. As of Fall 2023, we already have been meeting with first responders to discuss emergency response plans for the LNG storage facility.

LNG storage facilities are designed to be self-contained. The process of cooling natural gas and returning it to its gaseous state does not produce any waste.

Although the storage tank can receive LNG from tanker trucks for storage and dispense LNG to tanker trucks for delivery, that is not how the facility will normally operate. The storage tank is designed to be filled by taking natural gas off of NMGC’s transmission pipelines and to be able to reintroduce that stored gas back into the system through the transmission pipelines.

One reason a tanker truck might be used is to take LNG to another location to temporarily supply a community if a local pipeline is undergoing maintenance. This would not be an ordinary occurrence.

Most large natural gas utilities use stored natural gas to assist normal operations. Currently, NMGC has gas stored in underground salt caverns in Texas leased from a third party. Operating an on-system storage facility will give NMGC greater control over supplying customers by allowing us to directly manage the supply of stored gas, rather than relying on a third party. This will help mitigate the impact of market swings of the price of gas like those we experienced in February 2021. The storage tank will primarily be filled with gas during low demand periods when gas prices are lower, such as during the summer months. Then, during the winter or when we experience supply disruptions or price spikes, the stored gas can be returned to our system for customer use.

In effect, owning and operating this facility will allow us to relocate our storage from Texas to a facility here in New Mexico — closer to many of our customers — where natural gas will be available as needed without the time lag, expense, and contractual limitations currently required to access it and transport it. Additionally, avoiding the ongoing costs of that lease will help offset the cost to customers for building the LNG storage facility.

In-state storage ensures that NMGC customers receive continued reliable service from NMGC during the coldest winter weather.

The LNG storage facility will neither increase nor reduce the demand for natural gas. We have an obligation to provide natural gas to our almost 1.3 million customers and this facility will help us do that.

Our customers have the option to use natural gas if they choose. New Mexico Gas Company is obligated to deliver services to customers, regardless of how many remain on the system. Natural gas is currently the lowest cost option for heating homes and businesses. As well, producing heat with gas at the point of use is a more efficient use of natural gas than burning it to make electricity.

The facility will be designed to store and deliver natural gas during peak usage times. It will be used for brief periods for operational testing to ensure functionality and reliability, and it may be used during times when operational conditions or system constraints require additional gas supplies.

We expect the construction phase will employ about 100 to 200 workers. After the facility goes into service, it will be staffed 24/7/365 using a total of seven (7) to ten (10) employees.

The cost of constructing the LNG Storage Facility is estimated at approximately $181 million and it will cost between $3 million and $4 million a year to operate. NMGC will not seek to recover the cost of construction from customer rates until after the facility becomes operational in 2026.

We have secured the property and are developing engineering plans while seeking required regulatory approvals. We have presented information about the project to the City Council in Rio Rancho and applied to the New Mexico Public Regulation Commission in December 2022. A public hearing regarding that application is scheduled for December 2023.

We will not seek to recover the cost for constructing the facility until it becomes fully operational. After the facility becomes operational and NMGC withdraws from the Texas storage lease, the net increase to customers is currently expected to be approximately $1.50 a month.