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MARAD OKs Retirement of First LNG Deepwater Facility

In a notice published in the Federal Register Wednesday, the Transportation Department's Maritime Administration (MARAD) announced its final authorization of the decommissioning of the Gulf Gateway Energy Bridge Deepwater Port, the first deepwater liquefied natural gas (LNG) import facility of its kind in the world. The Excelerate Energy LP facility is being retired just eight years after it went into service in the Gulf of Mexico.

The floating LNG regasification facility, which is 116 miles off Louisiana's coast in 298 feet of water, was commissioned in 2005 (see Daily GPIMarch 4, 2005). Gulf Gateway was reported to have cost around $70 million, and was designed to deliver around 3 Bcf of regasified LNG from a ship into the pipeline grid via the Sea Robin and Blue Water subsea systems at a rate of about 500 MMcf/d.

Excelerate Energy notified MARAD and the U.S.Coast Guard in a February 2011 letter of its intention to decommission the Gulf Gateway Deepwater Port. It said its decision was based on "declining pipeline capacity issues, significant operational challenges and changes in the global natural gas market."

The decommissioning process called for all components of the Gulf Gateway facility to be removed and the connecting pipelines to be decommissioned in place. This notice in the Federal Register "completes final close-out and termination procedures for the Gulf Gateway Deepwater Port and License. No further action will be undertaken by MARAD," the agency said.

While the project had a short shelf life, the company's management team expressed no regrets. "Gulf Gateway has served us well, and was instrumental in confirming the viability of floating LNG regasification -- turning an innovative concept into an accepted industry solution," said Excelerate CEO Rob Bryngelson two years ago (see Daily GPIApril 20, 2011). "As Excelerate Energy looks to expand its operations and deliver flexible and efficient regasification solutions around the world, we are focused on markets with the greatest need.

 "This focus, coupled with the surge in LNG importation capacity in the U.S. Gulf Coast in recent years, has reduced the need for Gulf Gateway and confirmed that its retirement is the most financially prudent course of action for us."

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