The embattled AES Corp.'s Sparrows Point liquefied natural gas (LNG) terminal project, which has been proposed for Baltimore, MD, has been dealt another blow. The Maryland Department of Transportation (DOT) said the project's proposed 87-mile pipeline, the Mid-Atlantic Express, would infringe on the rights-of-way (ROW) of U.S. Interstate-695.

One of Baltimore's most heavily traveled highways, I-695 encircles the city on a 52-mile beltway, and is located near Sparrows Point, the site of the proposed LNG terminal.

The Maryland DOT's State Highway Administration (SHA) contends that the proposed pipeline would not comply with its utility policy, which bars the installation of pipelines within the ROW of expressways or highways. "It is our understanding from our consultation with the SHA that it is unlikely that Mid-Atlantic Express Pipeline would be granted an exemption from the 'utility policy' prohibitions of longitudinal installation of utilities within the expressway right-of-way," the Federal Energy Regulatory Commission said in a letter last Monday to AES Sparrows Point LNG LLC and Mid-Atlantic Express.

At least five segments of the proposed pipeline "would parallel or be constructed within the rights-of-way of I-695," according to FERC.

"Unless Mid-Atlantic Express is able to negotiate an exemption to [Maryland's] utility policy, you will need to evaluate and file a new preferred route alignment (route variations around these segments) or identify a new preferred route that would avoid the I-695 corridor altogether," the agency said.

In the event AES and Mid-Atlantic Express resolve this issue with SHA for its currently preferred pipeline route, Mid-Atlantic must perform a traffic study of its proposed construction along I-695 showing that the proposal is "feasible for continued Commission analysis," the Federal Energy Regulatory Commission (FERC) noted. The agency said it would delay issuing a notice of the schedule for its environmental review of the proposed LNG-pipeline project until Mid-Atlantic Express completes the study.

AES is facing opposition from Maryland on other fronts as well. In mid-September, the company appealed to the U.S. secretary of commerce to override Maryland's objection to a federal consistency certification for the company's LNG terminal project (see NGI, Sept. 17).

Because AES refused the state of Maryland's request to stay the federal consistency review of its proposed Sparrows Point LNG terminal, the Maryland Department of the Environment in mid-July denied the developer's request for a finding that the project is consistent with the state's coastal zone program (see NGI, July 23).

These are just a few of the obstacles in the company's path to construct the terminal on a peninsula that juts out into Chesapeake Bay in the city of Baltimore. AES also is battling in state and federal courts to overturn a Baltimore County ordinance that bans the construction of LNG facilities along its part of the Chesapeake Bay (see NGI, July 9). AES contends that the county's zoning ordinance violates the Energy Policy Act of 2005's amendments to the Natural Gas Act, which give FERC sole jurisdiction over the siting of LNG facilities.

If built, the Sparrows Point would have about 1.5 Bcf/d of regasification capacity with a potential for expansion to 2.25 Bcf/d. Regasified LNG would be delivered to regional markets via the proposed Mid-Atlantic Express, an 87-mile, 30-inch diameter pipeline that would extend from the terminal to connections with interstate pipelines at Eagle, PA.

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