BP Considering LNG Import Terminal in Tampa, FL

BP is considering shipping liquefied natural gas into the Port of Tampa and has taken an option to build a $200 million import terminal that could be completed in about four years. BP had said previously it would consider U.S. LNG projects on both the West and East Coasts, but the Tampa project is the only one announced thus far.

BP paid the Tampa Port Authority $20,000 for a six-month option on a 60-acre site that lies at the tip of Hooker's Point. The option may be extended for another six months for $50,000. The project, which is in the preliminary stages, would include a facility to reheat the LNG and then transfer it into a pipeline for commercial customers, including electric utilities that use gas-fired generators, BP said.

If BP's plan is approved, it would be a major step beyond speculation from a growing list of LNG proposals announced in the past few months by Enron Corp., El Paso Corp., Chevron and Williams (see NGI, March 26). Affiliate BP Exploration (Alaska) Inc. also has a proposal before the Alaska Senate Natural Resources Committee to liquefy gas there and ship it by tanker to Asia or transport it to the Lower 48.

In April, BP North America Gas & Power President Tony Fountain said that the role of liquefied natural gas was "fundamental" to BP's North American markets and indicated at a conference in Houston that the company was reviewing "several opportunities for LNG terminals" along the West Coast and East Coast (see NGI, April 9). A BP spokesman indicated the company actually could be moving quickly on several U.S. LNG terminals.

BP already produces LNG in Trinidad, and is now reviewing options on an LNG project in Egypt. BP is also subscribed for about one third of the total capacity at the Cove Point, MD, terminal, which is being reactivated by Williams. The terminal, mothballed in 1980, is expected to accept its first tankers in 2002.

In recent months there have been announcements to recommission two mothballed terminals: Cove Point and Southern LNG's terminal at Elba Island, GA. There have also been several ownership changes at existing plants and multiple announcements of new facilities, including Enron's plan for an LNG facility in the Bahamas and a pipeline to Florida, and El Paso Corp.'s recent announcement that it plans to build six new LNG import terminals at various locations across the United States, and in the Bahamas. Chevron also recently said it is examining the possibility of building a new LNG terminal in California.

BP's announcement follows Enron's plans to specifically target the growing Florida market through a pipeline beginning in the Bahamas that would run 90 miles underwater and come ashore in Broward County. The proposed Enron facility, which would be built on Grand Bahama, would regasify the LNG to be piped near Port Everglades, just north of Miami.

The Enron project remains in early development stages and still needs numerous approvals from regulatory groups as well as from Florida and the Bahamas. Enron is targeting construction to begin early next year if the approval process continues. With that timetable, commercial operation could begin by late 2004.

Florida has forecast that about 11,000 MW of new generation capacity will be built in the state between now and 2009, which would boost gas demand by 1.8 Bcf/d.

Duke Energy and Williams understood the extent of Florida's potential late last year as they ditched their own Buccaneer Pipeline project in favor of buying out its rival. The companies reached an agreement in November 2000 with The Coastal Corp. to buy its 100% interest in the proposed Gulfstream pipeline project. However, the Gulfstream line --- scheduled for June 2002 --- will only deliver up to 1.13 Bcf/d. Meanwhile, Florida Gas Transmission has placed a series of expansion projects into service over the past few years. Power generation growth has been the primary impetus. FGT's 200 MMcf/d Phase IV expansion went into service last month and its 428 MMcf/d Phase V expansion is scheduled to bring the pipeline's total capacity to 2 Bcf by 2003.

All indicators in the state point toward more electric generation, which in turn equates to more natural gas. In late April 2000, the Florida Public Service Commission told the state's largest electric utilities to increase their power reserve margin, or the amount of generation available in excess of peak-day needs, to 20% from 15%, and most if not all of that increase is expected to be achieved through the addition of gas-fired power.

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