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Controversial Weaver's Cove LNG Terminal Scrapped

Proponents of the Fall River, MA, liquefied natural gas (LNG) import terminal, who have fought for years to build Weaver's Cove LNG, withdrew their application on Monday with barely a whimper.

Hess LNG President Gordon Shearer said public opposition had not led to the proposed terminal's cancellation. Rather, he said, it was too much domestic gas.

"The significant increase in natural gas production from shale resources in North America resulting in lower prices as well as the growth in demand for LNG in the rest of the world make it unlikely the company can secure supplies of LNG on economic terms attractive enough to ensure the sustained profitability of the project," Shearer said in a statement.

So much for a project that has drawn so much news. When Weaver's Cove was first proposed in the early 2000s, domestic gas supplies were in retreat and imports were said to be the next big thing. Weaver's Cove LNG officially was launched in 2003 by its owner at the time, Poten & Partners (see Daily GPI, July 23, 2003). About a year later Hess Corp. joined Poten to help fund the project (see Daily GPI, June 7, 2004) and eventually took over.

But the proposed import terminal was never a slam dunk. An uproar over the project came from all quarters, but the Federal Energy Regulatory Commission (FERC) in mid 2004 issued a favorable draft environmental impact statement followed in 2005 by a favorable final environmental review and conditional approval (see Daily GPI, July 1, 2005; May 23, 2005; Aug. 2, 2004).

The developers persevered, despite a storm of opposition to the project that was never ending (see Daily GPI, Jan. 18, 2005; Nov. 23, 2004; Sept. 22, 2004). FERC in 2006 rejected requests twice to rehear its orders (see Daily GPI, April 19, 2006; Jan. 20, 2006). But the project took continuing heat from the U.S. Coast Guard, which last September denied for a third time an appeal by the operators to build the facility; the denial effectively blocked the terminal (see Daily GPI, Sept. 8, 2010).

Instead of pursuing a LNG import project in the United States, Hess LNG plans to focus on Asia and Africa, Shearer said. Gas import prices in those two regions are "two to three times" more than in North America and could double in the next five to 10 years as more countries wean themselves from nuclear energy, he said.

"The market has undergone a seminal shift, and we don't see a likely reversal soon," he said. Hess LNG "most likely" will sell the Fall River site. Shearer also denied that opposition to the project had affected the company's decision. "If that had been the case, we would have pulled out a long time ago."

Fall River's former Mayor Edward M. Lambert Jr., who had presided over the city when Weaver's Cove was launched, said the decision to halt the project "was a great victory for working class America, a great victory for Fall River."

U.S. Rep. Barney Frank (D-MA), who had long opposed the project, said the effort to stop the LNG project had made the difference. "It's really been a great example of cooperation, and we knew they would never win," Frank said. "It's not true that big corporations always get their way."

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