Looking for an experienced global industry player and perhaps indicating a shift of potential gas supply sources, Houston-based Crystal Energy, LLC, announced last week that it has an “in-principle agreement” with Australian-based Woodside (USA) Energy Inc. to develop Crystal’s proposed liquefied natural gas (LNG) receiving terminal off the coast of Oxnard along the part of Southern California’s coast dotted with offshore oil platforms. Crystal originally proposed bringing Alaskan gas supplies through its terminal.

Under the developing deal, Woodside will provide its technical expertise to the facility design of the project that Crystal has dubbed the “Clearwater Port LNG Project.” It also agreed to operate Clearwater, Crystal said in a prepared announcement.

Woodside will provide funding to Crystal “to obtain required project approvals through federal, state and local agencies” in exchange for giving Woodside, a major producer on Australia’s Northwest Shelf, “preferential access rights to Clearwater’s terminal capacity,” said Crystal Energy’s Chairman Bill Perkins, calling the impending deal “a significant step in implementing our long-term strategic plan.”

Perkins said Woodside adds “15 years of LNG operational experience and technical expertise, as well as an unblemished safety and environmental track record worthy of coastal California.” The agreement, he said, fulfills Crystal’s “vision for creating an environmentally superior project with a world-class operator that will provide a secure, long-term natural gas supply to California.”

The two firms are direct opposites. Crystal is a privately held company formed specifically to permit and operate Clearwater Port. Woodside (USA) is a wholly owned subsidiary of Woodside Energy Ltd., Australia’s largest publicly traded independent oil/gas exploration and production company, and operator of Australia’s largest resource project, the US$10 billion North West Shelf Venture in Western Australia.

Woodside’s CEO Don Voelte released a prepared statement that was quite bullish on the deal, saying the two companies “complemented each other perfectly.” Voelte added: “Woodside has substantial gas reserves and worldwide experience in LNG production and transportation, while Crystal provides an ideal potential entry point to the world’s largest gas market.”

“We are pleased that Woodside believes, as we do, that Clearwater Port is the best alternative for California because of its remote offshore location (12.6 miles off Ventura County), use of existing infrastructure (an existing idle offshore oil platform), project design that uses established technologies, and ability to provide a low-cost supply of natural gas.”

Last January, however, Crystal announced a memorandum of understanding (MOU) with Alaska Gasline Port Authority to negotiate a detailed letter of intent to supply LNG to California. Under the prospective deal, the Alaska LNG Project — still in its infancy — would supply 800 MMcf/d.

The MOU is still in place for potential Alaskan suppliers, Crystal spokesperson Lisa Palmer said, and it sees that source of gas as complementary with the new Woodside deal, which she said should be finalized next spring.

Targeted for abandoned Platform Grace off California’s coast, Clearwater Port would off-load the LNG, regasify it, and ship it to shore in an under-sea pipeline that would connect with Sempra Energy’s Southern California Gas transmission system. At present the facility is being designed to process the equivalent of 800 MMcf/d.

Crystal expects to have its applications for key permits, which were re-submitted last July, to the U.S. Coast Guard and the California State Lands Commission deemed complete by the end of the year, at which point it can proceed with a formal environmental review process, Palmer said.

As has become almost pro forma for LNG projects, an environmental/land owner protest has been launched to stop the project. Although the upscale semi-rural coastal enclave of Malibu, CA, has no jurisdiction, its landowners announced Monday they have started an ad hoc citizens group to oppose the offshore installation.

“Malibu is a national treasure, and the environment we live in is too important to be threatened by ill-conceived projects by unknown companies who are proposing a recipe for disaster,” an announcement Monday from the Citizens Against Crystal Energy (CACE) quoted Malibu’s Mayor Pro Tem Andy Stern as saying.

“It is premature of the citizens to oppose the project before the environmental process has been completed,” Palmer said.

Woodside has operated Australia’s North West Shelf Venture for more than 15 years and marked its 50th anniversary this year. It has delivered more than 1,600 cargoes of LNG to markets in Asia, the United States and Europe. The company said its core focus is in Australia, the United States and Africa.

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