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Creole Trail LNG Gets Initial Environmental Nod, But Told to Review Hurricane Effects

A liquefied natural gas (LNG) import terminal proposed by Cheniere Energy's Creole Trail LNG LP for Cameron Parish, LA, and an associated 118-mile, 3.3 Bcf/d pipeline to be built by affiliate Cheniere Creole Trail Pipeline won preliminary environmental approval by FERC staff Friday.

"We conclude that, with the use of Creole Trail's proposed mitigation and adoption of our recommended mitigation measures, construction and operation of the proposed facilities would have limited adverse environmental impact," the Federal Energy Regulatory Commission staff said of the terminal and pipeline projects in its draft environmental impact statement [CP05-360, CP05-357].

However, staff directed Creole Trail LNG to re-evaluate the potential for damage to the terminal from wind, storm surge, flooding and wave action in the wake of the two major hurricanes that struck the Gulf Coast this year, and file a report with the Commission prior to the issuance of a final environmental impact statement. FERC ordered the re-evaluation after Creole Trail officials reported that the "entire [terminal] site appeared to have been inundated by an estimated 15- to 25-foot storm surge" as a result of Hurricane Rita, which hit the southwestern coast of Louisiana in late September.

Contrary to FERC staff, Creole Trail did not think the Rita-induced storm surge warranted changes in the terminal's engineering design. But it did commission a formal study of the hurricane effects that will include an assessment of the actual impacts of Hurricanes Katrina and Rita on the terminal site, according to the draft environmental review.

In evaluating the safety of the proposed terminal, FERC staff concluded that the "likelihood of a cargo containment failure and subsequent LNG spill from a vessel casualty (collision, grounding or allision) is highly unlikely." And for similar reasons, "an accident involving the onshore LNG import terminal is unlikely to affect the public. As a result, the risk to the public from accidental causes should be considered negligible."

As for possible terrorist attacks, FERC staff recommended that Creole Trail coordinate with the Coast Guard to define the responsibilities of its security staff in supplementing its personnel and in protecting LNG tankers and terminals.

The Creole Trail terminal and associated pipeline are expected to cost $900 million and would be he largest receiving terminal in North America at 3.3 Bcf/d of initial processing capacity. It is planned for service in 2009.

The Creole Trail terminal, to be located at the mouth of the Calcasieu Channel in Cameron Parish, would be equipped with two unloading docks capable of handling up to 250,000 cubic meter vessels, and four 160,000 cubic meter tanks with LNG storage capacity of 13.5 Bcfe. The Creole Trail Pipeline, which would have an initial design capacity of 3.3 Bcf/d, would originate at the LNG terminal site and extend 118 miles north-northeast through Cameron, Calcasieu, Beauregard, Allen, Jefferson Davis and Acadia Parishes in Louisiana, where it would terminate near Rayne.

The proposed pipeline is expected to interconnect with interstate and intrastate pipelines with more than 12 Bcf/d of transportation capacity.

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