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McMoRan Amends Main Pass LNG Application to Use Closed Loop Design

After its Main Pass Energy Hub (MPEH) proposed offshore liquefied natural gas project was denied by Louisiana Gov. Kathleen Blanco early last month, McMoRan Exploration Co. said Thursday it has amended its license application in order to obtain approval.

The New Orleans-based company said its amended application for the offshore Louisiana project includes the use of closed loop technology instead of its previous plan of using open rack vaporization (ORV) technology, which had been a major point of contention.

On May 31, McMoRan amended its application with the U.S. Coast Guard and the Maritime Administration (MARAD) to obtain approval. MARAD will establish a new timeline for the project, including the publication of a supplemental Environmental Impact Statement and a final public hearing followed by a record of decision.

"The significant studies completed to date should enable the revisions to the MPEH permit application that incorporate closed loop technology to be processed expeditiously," McMoRan said Thursday.

The closed loop vaporization design is more expensive, but some consider the design to be less environmentally intrusive than ORV. In her May 5 veto of the project (see NGI, May 15), Blanco said "insufficient evidence" existed to approve McMoRan's application for an open rack vaporizer (ORV) system. She added that the McMoRan's application was only one of many pending LNG projects, adding that "We must avoid the harm presented by the cumulative impact of multiple offshore LNG facilities." Blanco stated that until additional data are collected and evaluated, Louisiana will require the use of a closed loop regasification system, which uses natural gas rather than seawater to warm the LNG.

Under the application, the MPEH terminal would be capable of regasifying LNG at a rate of 1 Bcf/d. McMoRan said it is continuing discussions with potential LNG suppliers as well as gas marketers and consumers in the United States to develop commercial arrangements for the facilities.

The company added that it is also considering investments to develop substantial cavern storage for a pipeline header system that would allow deliveries into liquid U.S. gas markets. Current plans for the MPEH include 28 Bcf of initial cavern storage capacity and aggregate peak deliverability from the proposed terminal, including deliveries from storage of up to 2.5 Bcf/d. McMoRan has already received approval from the Federal Energy Regulatory Commission to bring gas onshore using its proposed 36-inch pipeline into Coden, AL (see NGI, May 22).

Siting an LNG terminal offshore the Gulf of Mexico has proved to be an uphill slog, as Gulf Coast governors have erected a virtual wall to the projects. Earlier this month, ConocoPhillips withdrew its application for the 1 Bcf/d Compass Port offshore Alabama LNG terminal upon being notified by Alabama Gov. Bob Riley that he intended to veto the application (see NGI, June 12). Despite ConocoPhillips' promise of no net environmental impact from the project's open-loop vaporization process, Riley said he still had his doubts.

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