With liquefied natural gas (LNG) project proposals often running into onshore siting controversies, ExxonMobil Corp. last week unveiled plans for a $1 billion-plus floating LNG receiving terminal that it believes will create a gateway to global supplies of natural gas to help meet the growing energy needs of New Jersey and New York.

The BlueOcean Energy project will have the capacity to supply about 1.2 Bcf/d, enough to meet the needs of more than five million residential consumers. The company said BlueOcean Energy is at the start of a lengthy and rigorous permitting process involving state and federal agencies, as well as the general public.

To be anchored approximately 20 miles off the coast of New Jersey and 30 miles off the coast of Long Island, the facility will be far from shore and away from shipping lanes, ports and recreational areas.

"We believe that BlueOcean Energy is a unique and innovative solution to meeting the region's energy challenges," said Ron P. Billings, vice president, Global LNG, at ExxonMobil Gas & Power Marketing Co. "BlueOcean Energy will provide significant economic benefits to New Jersey and New York and will help the region achieve its environmental objectives."

Much like other LNG developers over the past five years (see NGI, Nov. 13, 2006; Aug. 28, 2006; March 27, 2006), ExxonMobil has run into siting roadblocks regarding onshore terminals outside of the industrial Gulf of Mexico ports in Louisiana and Texas. In late 2003, the proposed siting of an ExxonMobil Corp. LNG terminal just south of the city limits of Mobile, AL, stirred controversy and intense local opposition over safety and security hazards (see NGI, Dec. 15, 2003). Almost a year later, the company scuttled that project (see NGI, Nov. 1, 2004). Other onshore LNG proposals on both the East and West coasts have met with strong opposition.

On the other hand, both offshore LNG receiving terminals backed by Excelerate Energy -- Northeast Gateway located in the Massachusetts Bay east of Boston, and Gulf Gateway located offshore Louisiana in the Gulf of Mexico -- are either already operational (Gulf Gateway) or are soon to be (Northeast Gateway) (see NGI, May 21; April 11, 2005). Both of those terminals are smaller than the one planned by ExxonMobil, each capable of about half the delivery capacity of BlueOcean.

ExxonMobil said its BlueOcean Energy terminal can improve reliability while helping to reduce swings in natural gas prices and fuel future growth. The Rutgers University Bloustein School of Planning and Public Policy studied the economic effects of these benefits to the State of New Jersey. Rutgers' detailed report, to be issued shortly, concludes that "the proposed LNG terminal could have significant positive benefits for the New Jersey economy."

The company noted that the project will help the region in obtaining secure, safe and competitively priced energy, economic growth and development and environmental protection -- in alignment with goals of the New Jersey Energy Master Plan. It added that safety and security will be paramount. BlueOcean Energy commissioned former New Jersey Attorney General John Farmer, a noted security expert and senior counsel to the 911 Commission, to conduct a safety and security assessment of the facility.

"BlueOcean Energy is developing a sound plan for a safe and secure facility," Farmer said.

The BlueOcean Energy floating terminal is designed to receive LNG supplies from double-hulled LNG ships about twice a week, and store the LNG in insulated tanks inside the terminal's double hull. The stored LNG will then be warmed to turn it back into natural gas for delivery to New Jersey and New York markets through a new subsea pipeline that will connect to new and existing onshore pipelines.

ExxonMobil noted that the facility, which will not be visible from the New Jersey shoreline, will be moored in about 150 feet of water and be positioned outside of shipping lanes and away from port traffic. No route has been selected for the construction of a subsea pipeline to connect the ocean terminal to natural gas distribution pipelines onshore, though the company said its initial focus for a shore crossing is in New Jersey's Raritan Bay.

"Public consultation is a cornerstone of the permitting process, and we are committed to discussing the project with communities and other stakeholders," Billings said. "We look forward to working closely with state and federal officials, as well as with the U.S. Maritime Administration and the U.S. Coast Guard, the agencies responsible for the review of the terminal plans under the Deepwater Port Act."

In addition to BlueOcean Energy, ExxonMobil is involved in three other terminal projects. Receiving terminals are under construction near Sabine Pass, TX (see NGI, Aug. 28, 2006); in Wales in the United Kingdom; and offshore Italy in the Adriatic Sea. With several years required for permitting, engineering and construction, ExxonMobil said it expects BlueOcean Energy to begin service around the middle of the next decade.

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