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Despite FERC Rejection, Calais LNG Plans Still A Go

A Calais LNG official said the company intends to move forward with plans to build a $1 billion liquefied natural gas (LNG) import terminal and pipeline project in Calais, ME, despite FERC's rejection of a permit application for the project.

"We've got six years of work and more than $25 million invested in all of this," Calais Development Manager Ian Emery told NGI. "We're not prepared to walk away from all of that work and investment and the opportunity to provide additional natural gas to Maine, New England and the Maritimes."

In its applications to the Federal Energy Regulatory Commission (FERC), Calais proposed building an import terminal on the St. Croix River with three storage tanks and capacity to deliver 1 Bcf/d of revaporized LNG to the 20-mile, 36-inch diameter Calais Pipeline, which would interconnect with Maritimes & Northeast Pipeline in Princeton, ME.

FERC's Jeff Wright, director of energy projects, said Calais had been asked three times to provide status updates, including the availability of a site for the project.

"Calais has yet to acquire either project financing or legal access to a project site," Wright wrote in letter to the company earlier this month explaining why FERC was rejecting the applications. "Your continued inability to secure either financing or a site for the project is evidence that you are not currently in a position to proceed with this project."

Emery said the company would eventually refile all of the permit applications for the project.

"We've got a lot of work we've done; it's just we're not at a stage that we've been able to move forward in the review process with FERC at this time," Emery said. "Although we appreciate the time that they've given us, we're going to need additional time."

Calais has raised $25.5 million for the project so far and needs to secure an addition $15 million, which would be used to purchase several parcels of land and fund the balance of work that remains to be completed between the permitting and EPC stages, he said.

In September 2010 the U.S. Coast Guard declared the Passamaquoddy Bay Waterway suitable for LNG marine traffic. However, three months later Calais withdraw its permit applications with the Maine Board of Environmental Protection, citing at the time the economic downturn (see NGI, Dec. 20, 2010).

Competing proposals to build LNG import facilities in Maine have had mixed results. Downeast LNG is still proposing to build a $600 million terminal in Robbinston, ME, but Quoddy Bay LNG LLC's plans to build an import terminal at Split Rock, ME, have foundered (see NGI, March 5; Nov. 3, 2008).

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