Expanding Your Distribution Network Beyond the Transmission Pipeline

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

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

Gas Island Partnership LDC 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

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

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

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

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

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

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

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

9/13/2016 Northeast Gas Association SCADA

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

Contact Information David Lavoie Vice President, Business Development dlavoie@ngadvantage.com 617-848-9050