A day after ExxonMobil confirmed that it will sell or cancel its Vista del Sol LNG import project near Corpus Christi, TX, (see Daily GPI, Aug. 22), BP said Tuesday it has put its Bay Crossing LNG project, planned for Pelican Island in Galveston, TX, indefinitely on hold.
BP said that "due to its assessment of the project's economics" it is not proceeding with further work on Bay Crossing and will not file an application for the $600 million project with the Federal Energy Regulatory Commission at this time (see Daily GPI, Sept. 24, 2004). The terminal was expected to provide 1.2 Bcf/d of sendout capacity with 320,000 cubic meters of LNG storage.
"The company will continue to keep this position under review," BP said. Despite its decision, BP is still leaving itself some flexibility by renewing for another year its lease option with the Galveston Wharves Board for the proposed project on Pelican Island. The renewal is for the third and final year allowed under the agreement.
Last week, BP executives told Galveston officials about the decision and cited concerns about market conditions, particularly the abundance of other planned LNG import projects along the Gulf Coast, according to The Galveston Daily News. "This is strictly a business decision that has nothing to do with either politics or litigation," BP spokesman Neil Geary told the Daily News.
In addition to the two operating LNG import terminals in the Gulf region (Trunkline LNG in Lake Charles, LA, and Gulf Gateway LNG offshore Louisiana), nine other regional LNG terminals have been approved by federal and state regulators and applications for at least nine more are being processed by regulatory commissions.
Given a favorable ruling by the U.S. Supreme Court, BP said it still plans to move forward with its Crown Landing LNG project in New Jersey on the Delaware River. The state of Delaware is trying to block the Crown Landing project due to concerns over the environmental and safety impact to its coastal areas, but the state of New Jersey, which favors the project, has taken the case to the Supreme Court, citing a longstanding agreement over its use of the Delaware River shoreline (see Daily GPI, Nov. 30, 2005).
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