Last month’s tragic accident that killed at least 27 people at a liquefaction plant in Skikda, Algeria has had a chilling effect on the numerous plans for importing large quantities of liquefied natural gas (LNG) into the United States, according to speakers at a West Coast industry conference.

The speakers cautioned that it’s mostly a problem of perceptions because the accident wasn’t caused by the LNG itself and didn’t involve the type of terminals being built in the United States. Early reports pointed to a steam-boiler incident that happened to be at a major LNG-making plant.

In a California Energy Commission “fact sheet” compiled on its web site (www.energy.ca.gov/lng), the incident is characterized as most likely an accident — not sabotage — but it said news media in countries closest to the incident, reported that people locally are “fostering distrust of the government and industry officials who attest to LNG’s safety.” It will require about $800 million to restore the three of six LNG trains destroyed in the incident.

“Obviously there is not a receiving terminal in the world that has a steam boiler in it,” said Tom Giles, COO of Mitsubishi Corp.’s Sound Energy Solutions (SES) subsidiary that is proposing to build a 700 MMcf/d-1 Bcf/d receiving terminal in Long Beach, CA harbor. Giles spoke at a two-day “Pacific Coast LNG Development” conference last week in Long Beach. “Steam boilers are a problem if they are 30 years old and have been red-tagged. To find one in the U. S. you would have to go to a coal-fired power plant or a refinery.”

Nevertheless, Giles said the incident is “causing trouble mainly with people who don’t want to deal with the facts of what happened; they just want to use it to make it look like an LNG accident when it isn’t really an LNG accident. It is a terrible tragedy that happened in a country that doesn’t need another tragedy, but it is not an LNG incident.”

Giles said he hopes the investigation that the Federal Energy Regulatory Commission is doing helps bring more clarity and facts. It is still a “setback,” however, he said, because it has a lot of “misquoted” information surrounding it. “We’ll just have to keep explaining what happened, although obviously it would have been a lot better if it never happened — for our project and every LNG project in the country.”

Marc Hopkins, gas shipping projects manager for BP Gas Shipping Ltd. and a 35-year veteran of both tanker and gas ships, said “one incident,” such as happened in Algeria, can affect the whole industry. For the general public, Hopkins said, it is difficult to distinguish between liquefaction and re-gasification terminals.

The California Energy Commission’s David Maul, who had his staff create a 60-page web-based LNG portion of the CEC Internet site, admitted that the Algerian incident “hurts.” Ultimately, Maul said California is not “desperate for LNG,” and it needs to weigh the benefits and risks before giving approvals to any sites.

“The characteristics of the subsequent fire (in Algeria following the explosion) indicate that the source of fuel likely came from liquefaction-train piping that contained refrigerants or stripped natural gas liquids (ethane, propane, butane),” the CEC web site’s bulletin said. “An inventory of these chemicals would have been substantial at the fire site, whereas the LNG or methane inventory near the fire site was modest.”

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