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AES Eyes Maryland for LNG Terminal

AES Sparrows Point LNG LLC, and affiliate of AES Corp. of Arlington, VA, is in the preliminary stages of plans to build a $400 million 1.5 Bcf/d liquefied natural gas (LNG) terminal in Baltimore County, MD on the site of the former Sparrows Point shipyard. The company also is continuing to press its proposals for an LNG receiving terminal in the Bahamas to serve Florida and one in Boston Harbor.

On the Sparrows Point project, "we're in the 'pre-pre-public' consultation, so we expect to start the pre-consultation process formally with FERC some time between late February and middle March," Aaron Samson, AES managing director of LNG projects, told NGI Friday. "We're doing a lot of stakeholder meetings in Baltimore with community groups, environmental groups, agency heads, politicians. Getting as much early feedback as you can, both from an agency standpoint and communities, is helpful."

The proposed project would include a marine terminal, storage tanks and an 85-mile pipeline that would essentially parallel the Columbia system into Eagle, PA, and provide interconnects with Columbia, Texas Eastern and Transco. "There's 7-plus Bcf/d flow through the system with those three pipes, so you're basically inside [Texas Eastern zone] M3 and inside [Transco] Zone 6 non-New York. We're basically paralleling Columbia into Pennsylvania."

AES wants to have at least one connection to the Baltimore Gas and Electric distribution system and maybe as many as two or three depending on what the utility wants, Adamson said. The LNG facility would have three storage tanks and possibly a forth later, and potentially could boost sendout capacity to 2.25 Bcf/d. AES would like to see construction start by early 2008 and be completed in 2010. Extensive dredging would be required for a channel and turning basin to accommodate large LNG tankers.

Baltimore County officials are studying the proposal, and the Department of Economic Development has had one meeting with AES. The company has a 99-year lease option on 60 acres at Sparrows Point, a site Samson described as "kind of the moon." The location of the former Bethlehem steel works, it is a brownfield site in the truest sense of the word, he said. However, the nearest home is 1.3 miles away.

Maryland is the home of the Cove Point LNG terminal, whose operator, Dominion Resources Inc., plans to double storage capacity at the Chesapeake Bay terminal in eastern Maryland to 6.8 Bcf and increase sendout capacity to 1.8 Bcf/d by 2008 (see NGI, June 21, 2004). Adamson said AES doesn't view the Cove Point facility as a competitor because it is fully contracted and the AES terminal would serve a region that's a little farther north.

Another AES affiliate, Ocean Express LLC, still is awaiting a vote by the government of the Bahamas on an LNG plant it has proposed on the man-made industrial island of Ocean Cay. The company already has U.S. federal and state approvals for a 76-mile, 24-inch diameter pipeline to the Florida mainland that would transport 842 MMcf/d of gas to interconnections with Florida Gas Transmission and Florida Power and Light's (FPL) distribution system near its Fort Lauderdale power plant.

"The prime minister made numerous statements in December saying the project would be approved very shortly," Samson said. "It's been a long, painful and difficult to understand process." AES is in "very active discussions" with potential capacity holders at its Bahamas terminal, but everything is waiting on the prime minister's approval.

Suez Energy North America also is awaiting government action in the Bahamas for an LNG terminal it has proposed in Freeport Harbor (see NGI, May 9, 2005). The FPL Group has dropped out of that project.

In Massachusetts the legislature is expected to hold hearings in February on a bill to allow the leasing of a site on an uninhabited island in Boston Harbor for an LNG receiving terminal proposed by AES. The site, which is an unused state park on 2,500 acres on Outer Brewster Island, currently is under the control of the state Department of Conservation and Recreation (see NGI, Sept.26, 2005). The proposed bill would authorize the agency to hold a public auction for a long term lease on the site. "From a public safety standpoint, this is the right place; it's one of the outermost islands; it has deepwater access and there are good buffers to population." Samson said, and "it's at a load center. This is the regional solution for Boston." Also, a pipeline connection could feed into the HubLine and Algonquin.

AES also has competitors for a site off Boston. There are two proposals to build deepwater ports which would be capable of mooring specially designed LNG ships equipped to store, transport, and vaporize LNG into natural gas that can be sent to customers using the existing HubLine subsea pipeline (see NGI, Feb. 21, 2005). The LNG carriers would moor at the proposed port by means of a submerged unloading buoy system. Suez has proposed its Neptune LNG deepwater port off Gloucester, MA, and Excelerate Energy, which has built a deepwater port off the Gulf Coast, also has proposed one in the area.

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