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Three LNG Projects Get Final Environmental Nods

FERC on Friday issued favorable final environmental reviews for three liquefied natural gas (LNG) terminals and associated pipeline projects -- Dominion Cove Point LP's proposed expansion of its LNG terminal in Maryland, BP Energy affiliate Crown Landing LLC's proposed 1.2 Bcf/d terminal to be built along the Delaware River in Logan Township, NJ, and Sempra Energy's Port Arthur LNG LP proposal to construct an LNG terminal and associated facilities in Port Arthur, TX.

"Staff concludes that if the proposed [Cove Point] projects are found to be in the public interest and [are] constructed and operated in accordance with Dominion's proposed mitigation and our recommended mitigation measures, the proposed facilities would have limited adverse impacts," the agency said in a statement issued along with its final environmental impact statement (FEIS) on the Cove Point terminal and pipeline projects [CP05-130, CP05-131]. The Cove Point expansion would increase the flow of natural gas to the Mid-Atlantic and Northeast markets for both consumption and storage.

The FEIS reveals that FERC is moving along with the Cove Point LNG expansion despite cries by Washington Gas Light (WGL) to reject the project until it can be shown that LNG deliveries from the Maryland facility are interchangeable with traditional gas and will not negatively impact the utility's distribution system. WGL in early 2005 blamed Cove Point's LNG for multiple leaks that erupted on its system. It contends that Cove Point's expansion could pose even more problems (see NGI, Nov. 7, 2005).

The expansion, which is scheduled for 2008, would increase the sendout capacity of the Cove Point LNG terminal in Calvert County, MD, to 1.8 Bcf/d from 1 Bcf/d, and would boost storage capacity to 14.6 Bcf from 7.8 Bcf. The project calls for the construction of two 160,000 cubic meter single-containment LNG storage tanks. Affiliate Dominion Transmission Inc. proposes to construct 161 miles of mostly 36-inch and 24-inch diameter pipeline in Maryland and Pennsylvania, and associated aboveground facilities in Virginia, Pennsylvania, New York and West Virginia.

The proposed pipe facilities in Maryland would bring additional winter gas supplies to the Mid-Atlantic region, while the proposed facilities in Pennsylvania, Virginia, West Virginia and New York would allow additional supplies to be stored in the summer and moved to the Northeast for use during periods of peak need in the winter.

The Cove Point LNG terminal currently receive about 90 LNG shipments annually and would receive up to 200 shipments each year following the construction of the expansion.

FERC staff also concluded that BP Energy Crown Landing's proposed LNG terminal in New Jersey and Texas Eastern Transmission's proposed Logan Lateral would have "limited adverse impacts" if the companies carry out the recommended mitigation measures [CP04-411, CP04-416]. The $500 million Crown Landing terminal project calls for the construction of 9.2 Bcf of storage and vaporization facilities, with a baseload sendout rate of 1.2 Bcf/d and peak rate of 1.4 Bcf/d. The facilities would occupy 40 acres of a 175-acre industrial corridor site.

Crown Landing proposes to interconnect the proposed LNG facilities onsite with three pipelines. One interconnect would be with the new 11-mile pipeline that Tetco seeks to construct (Logan Lateral) between its existing Chester Junction facility in Brookhaven Borough, PA, and the proposed LNG terminal in New Jersey. The other interconnections would be with Columbia Gas Transmission and Transcontinental Gas Pipe Line.

The Crown Landing LNG project would have a maximum delivery capacity of 0.5 Bcf/d to the Columbia Gas pipeline system, 0.6 Bcf/d to the Transco pipe system, and 0.9 Bcf/d to the Tetco system, the company said.

The Crown Landing project is caught in the middle of a border dispute between Delaware and New Jersey, which the Supreme Court has agreed to decide (see NGI, Aug. 4, 2005). Delaware is arguing that it can block the project's 2,000-foot offloading pier from being built in the Delaware River, which it considers inside the Delaware border based on a deed granted on Aug. 24, 1682 by the Duke of York to William Penn. New Jersey, which wants the terminal built to provide a new source of gas supply to its residents and businesses, contends that a 1905 compact between the two states gives the Garden State control over water access and structures, such as piers, built along its side of the river, even if they extend across the state border.

The Crown Landing LNG terminal suffered a major setback earlier this year when the Supreme Court granted a request by the state of Delaware to appoint a special master in the border dispute over the project (see NGI, Jan. 30). At the time, BP said the decision could delay the project another 1-2 years given prior lengthy reviews by special masters. The decision probably pushes project's in-service date to 2011 from 2008, the company said.

Lastly, FERC staff concluded that Sempra's Port Arthur LNG $700 million terminal and pipeline project "with appropriate mitigating measures, as recommended, would have limited adverse environmental impact." Port Arthur LNG proposes to build the terminal, located in Port Arthur about 85 miles east of Houston, in two phases and complete it in 2009. Phase I would permit the terminal to send out 1.5 Bcf/d of regasified LNG on a firm basis by the winter heating season of 2008-2009, the company said [CP05-83]. Construction of Phase II would increase the sendout capability by an additional 1.5 Bcf/d of gas on a firm basis as early as 2010, it noted.

The Port Arthur terminal would be sited on roughly 198 acres in Port Arthur, which lies at the eastern edge of Jefferson County, TX. The land, which is owned by Sempra Energy, runs along the Port Arthur Ship Channel.

Affiliate Port Arthur Pipeline LP proposes to build and operate a 70-mile, 36-inch diameter pipeline leg, which would interconnect with Transcontinental Gas Pipe Line, and a three-mile pipeline leg to provide takeaway capacity for regasified LNG. The three-mile, 36-inch diameter pipe leg would interconnect with Natural Gas Pipeline Company of America in Jefferson County.

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