How to Become a Natural Gas Producer

How to Become a Natural Gas Producer

NYSEG ("Company") will agree to new interconnections for all local production producers and renewable natural gas producers (collectively, the “Producers”), who agree to pay for such interconnections, on a non-discriminatory basis, unless there is an operational, environmental or legal justification to deny such interconnection at the requested location. 

The Company will work with Producers on a confidential basis to discuss the Producer’s production, the Companies’ facilities relevant to the proposed production, including pressures and flows, and potential changes to operations and facilities. 

Both local production from gas wells and renewable natural gas (“RNG”) facilities are considered local production on the Company’s system. 

Process to Become a Natural Gas Producer on NYSEG's System:

  1. I. Preliminary Evaluation
    1. Local Producer Contacts Company
      1. Initial contact from Producer is made with Gas Supply via email
      2. Producers will download the following documents from the links below
        1. Current Gas Quality Standards
        2. Latest approved Natural Gas Tap Agreement
        3. Team NY Gas Tap Summary
        4. Non-Disclosure Agreement (“NDA”)
      3. Gas Supply Analyst (Contracts) will provide Producer the following:
        1. First position Base Contract for Purchase and Sale of Natural Gas (NAESB)
        2. NAESB Special Provisions
        3. Contact information for contractual and technical questions
      4. Manager – Gas System Planning will be responsible for coordinating the negotiation and execution of the Tap Agreement and executing NDA
      5. Gas Supply Analyst will be responsible for coordinating the negotiation and execution of the NAESB Contract
      6. Individuals responsible for negotiations and execution of these agreements can opt to have monthly status calls to discuss technical or contractual issues and get updates on progress of current negotiations
      7. Gas Supply Analyst (Contracts) and/or other project member will create a project specific Team within Microsoft Teams
        1. All Producer information and project documentation will be filed in the Team files section and will be accessible by any internal personnel requiring access
        2. Key dates, meeting notes, and contracts will be tracked in the Team site
    2. Preliminary Project Scope Description
      1. Producer provides Project Scope Description
        1. Location of wells or renewable natural gas production facility, including address and map
        2. Feedstock source and clean-up technologies being considered, for RNG projects
        3. Maximum available delivery pressure (PSIG)
        4. Expected production volumes in Mcfh (1000 cubic feet per hour) of natural gas meeting gas quality requirements
        5. Expected hours per day of production and total daily production in Mcfd (1000 cubic feet per day)
        6. Interconnect temperature
        7. Expected heating value (BTU) in compliance with Company’s Gas Quality Standards
        8. Deliverability of gas to the Company,  including any daily and seasonal variations
        9. Projected dates desired for potential tie-in to NYSEG/RG&E system
    3. Hydraulic Network Study Fee
      1. Gas System Planning requests invoice for the Hydraulic Network Study Fee of $5,000, subject to refund of any unused amount
      2. Upon receipt of Producer’s Hydraulic Network Study Fee payment, this will trigger commencement of the Hydraulic Network Study
    4. Company Internal Analysis
      1. Pipe size/length
      2. Examine pipeline capacity during varying load periods
      3. Reliability of Local Production
        1. The Company will evaluate the flow patterns of each load pocket where Local Production is attached
    5. Preliminary Review Meeting
      1. Review of  interconnection process
      2. Producer specific needs
      3. Local, state, and/or federal regulatory requirements
      4. In-person meeting to set foundation for open communication
  2. Engineering Feasibility Analysis
    1. Producer Provides Detailed Technical Proposal
      1. Description of well or chosen clean-up gas technology
      2. Detailed analysis of  reasonably expected trace constituents which could impact pipeline safety/integrity and consumers
      3. Assurance that clean-up technology is compatible with upgraded gas requirements based on feed stock and reasonably expected trace constituents for RNG and that RNG meets Company gas quality requirements
    2. Company Assesses Potential Impacts
      1. Reliability of local production
      2. Work with internal stakeholders (Gas Supply, Gas Control, Gas Engineering, Corporate Risk, Legal, etc.) to assure complete understanding of project
    3. Determine Preliminary Interconnect Cost Estimates
      1. Company Engineering will develop preliminary interconnect cost estimate
      2. Producer pays the entire cost of interconnection of the facilities to the Company
      3. The Company encourages Producers to tie into their respective distribution systems
  3. Agreements
    1. Commercial Aspects of Tap Agreement Accepted
      1. Final gas quality tariff specifications and monitoring
      2. Gas measurement requirements
      3. Facility disconnection and shutdown rights
      4. Schedules, standards and inspections
      5. Delivery obligations (volume, energy content, pressure, temperature, flow rates, etc.)
      6. Term of agreement / Date of operation
      7. Design and construction
      8. Operation and maintenance requirements
      9. Easements and access rights
      10. Utilities
      11. Costs, fees and payment terms
      12. Insurance
      13. Ownership
      14. Taxes
      15. Gas pairing agreements, if any
      16. Tariff or contract for transporting the gas enabling the Company to facilitate the desired transaction for the Producer, if sold to a third party
    2. Commercial Aspects of NAESB Agreement Accepted
      1. Transaction procedure
      2. Performance Obligation
      3. Transportation, nominations and imbalances
      4. Quality and measurement
      5. Taxes
      6. Billing, payment and audit
      7. Title, warranty, indemnity
      8. Notices
      9. Financial responsibility
      10. Force Majeure
      11. Term
      12. Limitations
      13. Market disruption
  4. Commissioning
    1. Commissioning
      1. Producer must keep Company informed on progress
      2. Interim meetings
      3. Address pre-construction questions
      4. Start-up procedures
      5. Sampling requirements
      6. Response actions of out-of-compliance supply
      7. Emergency plans and procedures
      8. Facility operations and maintenance
  5. Document Control
    1. Document Control
      1. Finalized original contract documents will be sent to the Gas Supply Department
      2. Gas Supply Department will log all Tap and NAESB agreements in Microsoft Teams, and maintain original documents in a locked central file located in the Energy Supply Department
      3. Final documents will also be scanned into PDF files and saved on a designated server
  6. ESCO Nominations and Balancing
    1. ESCO Nominations and Balancing
      1. ESCOs can purchase from local production gas for their daily metered pools according to the limitations defined in the Gas Transportation Operating Procedures manual in section G.  Nominations must be entered into GTS and Gas Supply will ensure the production from the designated station is greater than the nominations.  If the flow falls below the nomination level then the ESCOs nominations are pro-rated accordingly
      2. ESCO’s can also purchase local production gas from the well and Gas Supply will revise the GTS nominations to reflect actual flow from the well
      3. The Company will monitor and track ESCO nominations
      4. Local production deliveries are not considered a replacement for primary point capacity requirements.  ESCO local production gas supply is combined with the other city gate delivered supplies to serve the ESCOs pool and is “cashed out” at daily or monthly prices as appropriate. This balancing service process compensates the customers paying for pipeline capacity in the same manner as other city gate deliveries
  7. Pricing
    1. Pricing  and System Supply Savings
      1. The Company purchases local production volumes under a NAESB master agreement
      2. The Company negotiates the price at a discount to market to reflect the fact that the supply is interruptible and as a mechanism to compensate firm customers for providing a balancing service for the local producer
      3. Under current practice and market / regulatory conditions, the Company does not contract for supply at a fixed price or volume, or for a term greater than one year 
        1. This practice is a result of current uncertainty of load / customer base, shifting basis across various pooling points, and changing supply and demand fundamentals (such as local production, economy and the electric generation fuel mix).
      4. Local production savings is calculated by comparing the negotiated price with the Producer to what the Company’s alternative price would be if the gas had to be purchased upstream of the city gate and / or from another supplier

To submit documents and for additional inquiries, please email us at:

Documents and Links for Natural Gas Producers

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