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Woodside Says Offshore SoCal LNG Plans on Track

A U.S. Geological Survey (USGS) assessment of earthquake risks has not deterred Woodside Natural Gas from developing a deepwater liquefied natural gas (LNG) pipeline 27 miles offshore the Los Angeles International Airport, a company spokesperson told NGI last Thursday. Environmental review work was delayed last fall at Woodside's request because of a project redesign.

Woodside about 10 months ago said late summer or early fall in 2008 was the target for releasing the draft environmental documents and starting the public hearing process. That never happened, and another delay was announced. The Australia-based company filed with the U.S. Coast Guard for a deepwater port permit in August 2006, and federal and Los Angeles city authorities launched an environmental impact review, only to halt it in December 2006.

Now the USGS report is out, saying the project, which does not include an offshore receiving and storage terminal, faces a "medium-to-high-probability" of damage from earthquakes or other causes.

"The probability of a damaging earthquake -- considered here as a magnitude 6.5 or greater [on the Richter scale] -- in the next 30 years within about 30 miles of the proposed pipeline ranges from 16% at the pipeline's offshore end to 48% where it nears land," the USGS said.

"This is all part of the process -- the USGS can review and make suggestions," said Woodside spokesperson, Michael Hinrichs, who confirmed that the report's conclusions and suggestions are being incorporated in the revised design under way. Under current schedules, Woodside expects a joint draft environmental statement and report to be completed by early in 2010.

"The USGS was reviewing seismic studies [we] conducted as part of our application, and the USGS report has the standard type of recommendations made in the course of an environmental review process," Hinrichs said. "USGS overall was complimentary of Woodside's analysis, and also noted that 'there are new consensus seismic hazard reports that have been released since the Geological Resources document was written' [by Woodside]. Woodside has always planned subsequent seismic reviews as we continued the design process."

Hinrichs stressed that there is nothing in the USGS review that Woodside hadn't already considered or planned on considering in its design and development process.

Through earlier collaboration with Sempra Energy's Southern California Gas Co. (SoCalGas), Woodside has simplified the project so after the gas from LNG deliveries travels through its 27-mile underwater pipeline it will need only one or two four-mile long pipelines and one interconnection point with the SoCalGas transmission pipeline system onshore. Originally, Woodside thought it needed at least three onshore pipelines and the same number of interconnection points.

"It is good that the [USGS report] information is coming in now," Hinrichs said. "It gives us more than enough time to think about it. Their role is to look at the project from their standpoint, make recommendations and point out areas we may have missed. They haven't taken a position on our project."

Woodside's continuing delays are not related to the global credit crunch, he said. "The delays in the EIR/EIS are because last September we submitted a letter [to the City of Los Angeles and U.S. Coast Guard] saying we would be making improvements in our project design, eliminating one of the ships and an additional two tie-in points [to the SoCalGas system]."

Hinrichs said Woodside is going to take a "good deal of time" working on its project design and how it can be improved, so the target date for submitting the revised plans has been pushed back. "Hopefully we can submit something [to the city and U.S. Coast Guard] and they would be able to publish drafts for public review in early 2010. We're pretty committed to giving a thorough evaluation to our project and we're not in any rush.

"Through optimization of the SoCalGas system and working with them last year we realized we could actually deliver the amount of gas we're looking at with one tie-in point. So we eliminated the need for an extra ship and an additional 12 miles of [onshore] pipeline. That was all good news as far as we're concerned."

The OceanWay project calls for two submerged regasification hookup buoys about 28 miles offshore in the Pacific Ocean from the onshore interconnection site near Los Angeles International Airport. Woodside is touting its proposal as more "environmentally sensitive, safe and secure," given rejection in the past two years of two more advanced LNG proposals -- one offshore by BHP Billiton, and the other in Long Beach Harbor by a joint venture of Mitsubishi and ConocoPhillips.

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