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McMoRan's Proposed Offshore Louisiana LNG Project Seen Resulting in Minor Impacts

The Final Environmental Impact Statement (EIS) on McMoRan Exploration Co.'s proposed license to build an offshore liquefied natural gas (LNG) terminal has determined the project would result in minor long-term adverse impacts, according to the U.S. Coast Guard and the Maritime Administration (MARAD).

McMoRan said it expects the environmental impact can be even further reduced for the proposed terminal and gas storage project, located offshore at McMoRan's Main Pass Energy Hub (MPEH), 37 miles east of Venice, LA (see Daily GPI, March 2, 2004).

The terminal would be capable of receiving and conditioning 1 Bcf/d of LNG and could accommodate potential future expansions. New Orleans-based McMoRan also is planning to develop 28 Bcf of working gas storage capacity in a salt formation at the site. Aggregate peak deliverability from the proposed terminal, including deliveries from storage would total 2.5 Bcf/d.

"The publication of the Final EIS is a significant milestone as we near completion of the permitting process for our proposed major new LNG port," said McMoRan co-chairmen James R. Moffett and Richard C. Adkerson in a statement. "The MPEH project would provide critical supplies of natural gas to our nation, generate substantial direct economic benefits through job creation and investment in our Gulf Coast region and be operated in an environmentally responsible manner. We look forward to completing our work with applicable federal and state agencies in a timely fashion."

According to McMoRan, the EIS assessed the impact to fisheries from using the Open Rack Vaporizer alternative for the project and indicated the system would have "direct, adverse, minor impacts on biological resources." The methodology used in the EIS to assess the impact on biological resources did not consider potential benefits from varying the depth of seawater intakes or mitigation strategies that could reduce the potential impacts.

"Based on additional technical studies not included in the EIS, which consider the unique location of MPEH in 210 feet of water and mitigation measures expected to be included in the project's deepwater port license, McMoRan expects the potential environmental impacts from MPEH, evaluated to be minor in the EIS, can be further reduced," the company said in a statement.

The Coast Guard has scheduled public hearings for the week of March 20. Governors in the adjacent coast states of MPEH, which include Louisiana, Mississippi and Alabama, will have 45 days from the date of the last public hearing to respond to MARAD on the license application, with a record of decision on the application expected by the end of June 2006. A copy of the Coast Guard letter outlining the schedule is being filed with the Securities and Exchange Commission.

McMoRan said it is continuing discussions with potential LNG suppliers and with domestic gas consumers to develop commercial arrangements for the facilities.

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