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Philadelphia Gas Works Issues RFP for Freedom Energy LNG Terminal

Philadelphia Gas Works Issues RFP for Freedom Energy LNG Terminal

Municipal utility company Philadelphia Gas Works (PGW) has issued a request for proposals (RFP) from energy companies regarding plans to convert its existing Richmond Plant LNG peak shaving facility, the largest facility of its kind in the nation in terms of storage and vaporization capacity, into a full-time import terminal on the Delaware River.

The company touted the project's low cost, minimal time needed for conversion and premium market location. It also would allow PGW to avoid an estimated $15-20 million in needed upgrades at the existing LNG facilities.

"By taking advantage of PGW's location and the tremendous value of our existing facility, we have a major strategic advantage over the more than 50 cities and towns which have proposed new LNG import terminals," said PGW CEO Thomas Knudsen. "The project requires the review of numerous government agencies and we are committed to making sure that the project receives all the necessary safety and security clearances before moving forward."

PGW expects the Philadelphia Freedom Energy Center LNG terminal to be funded and developed by another company that would pay PGW leasing and tolling revenues.

There are substantial facilities in place already. The existing plant, which was built in the early 1970s as a means of ensuring a reliable supply of natural gas for Philadelphia, currently has about 23.5 MMcf/d of natural gas liquefaction capacity, two storage tanks capable of holding a total of about 4.1 Bcf of gas and vaporization capacity totaling about 450 MMcf/d.

The Freedom Energy Center project would involve the construction of import terminal facilities at the Tioga Marine Terminal, a deepwater river port with a deepwater pier. It also would include construction of a small pipeline, a gas-fired electric generation plant, 33% more LNG storage capacity and an LNG liquids processing facility. The total cost of the project would be about $600 million. The utility expects the regulatory review of the project to take up to two years to complete.

"The conversion of PGW's existing Richmond LNG Plant will bring new energy to the North Delaware corridor, will provide a new and exciting revenue generating opportunity for PGW and its customers and will position Philadelphia as a leader in the development of clean energy," said Philadelphia Mayor John Street.

The project is expected to create 700 new construction jobs that would generate $20 million in new city wage tax revenues. In addition, PGW touted the $1 billion in expected new revenues from the terminal in the first 20 years of operation.

Such a large import terminal could provide substantial benefits to the entire region, such as greater energy security, lower costs and cleaner air, the company said.

"The facility will be strategically located to take advantage of one of the fastest growing and most constrained natural gas markets in North America," the company said in a statement. "Energy companies are aggressively investing in facilities that will significantly increase LNG imports by the end of this decade. Early discussions indicated that companies would prefer to invest where natural gas supplies are most needed, namely the Mid Atlantic region with Philadelphia as its gateway."

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