Monday, June 9, 2008

Another coastal LNG facility bites the dust

2008 has not been a good year for companies proposing to develop liquefied natural gas (LNG) facilities--on the east or west coasts.

News of the latest failure came on Friday when SES Terminal, a subsidiary of Tokyo-based Mitsubishi Corp., announced in a filing to the Federal Energy Regulatory Commission that it had given up plans to build an $800-million LNG terminal in Long Beach, CA. following significant local opposition and the suspension of an environmental review.

The terminal, a joint project with ConocoPhillips, would have provided California, which gets natural gas from in-state suppliers and via pipeline from Texas and other places, with an alternative source of the fuel.

According to the Los Angeles Times, project opponents raised safety concerns, "including the potential for a natural gas explosion that could kill hundreds of people and destroy much of the Long Beach waterfront."

In April, New York Governor David Paterson rejected a plan by Broadwater to build a floating LNG terminal nine miles off the coast of Long Island. That project had drawn sustained opposition from fishermen and environmentalists in New York and Connecticut.

On March 31, the U. S. Supreme Court ruled in favor of the state of Delaware which, in a border dispute with New Jersey, opposed a proposal by Crown Landing LLC, a subsidiary of BP, to construct a LNG import facility in the Delaware River off Logan Township, NJ.

But, despite the string of losses, other LNG facility developers continue to seek approval.

Last month, Excalibur Energy (USA) Inc. , a 50/50 joint venture between Canadian Superior and Global LNG Inc., a Delaware company, announced it would seek approval for "Liberty Natural Gas." This offloading operation, proposed to be stationed some 15 miles off Asbury Park, NJ, would transfer LNG from tankers and send the gas via 50 miles of offshore pipeline and eleven miles of onshore pipeline to a terminus in Linden, NJ.

Two other competing projects seeking approval in New Jersey are Safe Harbor Energy, which is proposed by the Atlantic Sea Island Group, and ExxonMobil's BlueOcean Energy.

There even may be a flicker of life left in the Broadwater project. Its project manager announced on Friday that New York's rejection will be appealed to the U.S. Commerce Department.


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