National Grid has abandoned plans for the Fields Point Liquefied Natural Gas (LNG) terminal in Providence, RI, and has dropped its appeal of a FERC decision not to approve the project to convert an existing LNG peak shaving plant there for LNG importation, the company said last week.

The decision follows a Sept. 29 meeting between the company and Rhode Island Attorney General Patrick Lynch, who opposed the Fields Point project. National Grid acquired KeySpan Corp., the original backer of the project, this summer (see NGI, Sept. 3).

KeySpan had planned to convert an existing LNG peak shaving facility into an import terminal without undertaking substantial changes to the existing LNG storage tanks. The $50 million conversion was designed to provide a peak sendout of 525 MMcf/d of gas with storage capacity for 600,000 metric tons of LNG. KeySpan signed a partnership agreement in October 2003 with BG Group on the project. The Federal Energy Regulatory Commission also dismissed Algonquin Gas Transmission's related 1.4-mile 500 MMcf/d pipeline extension to the proposed import facilities (see NGI, July 4, 2005).

The decision followed the Commission's conclusion in a final environmental impact statement that the terminal would need substantial safety upgrades to meet federal safety standards, upgrades KeySpan said would be expensive and would require a shutdown during three consecutive heating seasons (see NGI, May 23, 2005).

Commissioner Nora Brownell said in 2005 that it was a "difficult decision" to reject the project because the region desperately needed new gas supply. But she said it was an "appropriate development" of the Commission's LNG policy that "addresses the very real concerns made by the residents in communities and all of the towns" nearby.

The project encountered significant opposition. A report conducted by former White House anti-terrorism adviser Richard Clarke found that urban import terminals, such as Fields Point LNG, would be vulnerable to "catastrophic" terrorist attacks, and also make "extremely attractive" terrorist targets.

According to National Grid, KeySpan continues to be the largest supplier of natural gas to the Northeast and the largest distributor of natural gas to Rhode Island and the region. National Grid Executive Vice President of Business Development Steve Zelkowitz told Lynch that the company would continue to evaluate gas needs in the region. The company said it believes LNG will continue to play a critical role in both energy reliability and price.

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