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Coast Guard Seeks GHG Review of Other SoCal LNG Projects

Backers of the newest of three proposals for an offshore liquefied natural gas (LNG) terminal along the Southern California coast, Port Esperanza off of the Huntington Beach-Long Beach area, have been asked by the U.S. Coast Guard to complete a lifecycle greenhouse gas (GHG) impact assessment from the gas source to the burner tip.

Similar requests were made earlier this year of two other offshore proposals that are further into the permitting process.

Announced a year ago and incorporated by its parent company, San Antonio, TX-based Tidelands Oil & Gas Corp., Esperanza has yet to file its formal applications to the Coast Guard and California State Lands Commission, but its lead consultant, former California Energy Commission gas expert David Maul told NGI Wednesday the project has been actively dealing with "key social, community and environmental issues that are not obvious from the normal 10,000-foot review.

"We have to address GHG emissions issues, and we have already done a preliminary analysis of that," said Maul, noting his project has the lowest GHG emissions footprint of any LNG proposal on the West Coast, including Sempra Energy's Energia Costa Azul, the only project to be built so far (opening later this year). "So, we're already going forward with that kind of review and analysis."

Pre-application work has gone forward, but Tidelands is still lining up financing for the project, Maul said. The application will be ready to go when the financing is secured. "Hopefully, we will have that lined up real soon and we'll go forward."

In the meantime, Esperanza faces the same GHG lifecycle impact analysis that has slowed Woodside Natural Gas' Ocean Way and NorthernStar's Clearwater Port projects (see Daily GPI, March 6). "There is room for a couple of LNG projects on the West Coast, and we think we can be one of them," said Maul.

Maul said that currently many long-term cargoes have been locked up globally, but there are still sufficient short-term ones for the first years of the terminal's operation -- sometime after 2012 -- and he thinks Esperanza can sign up enough initial supplies to make a go of the project. "For the first years we'll have some short-term bridge contracts, but then we'll get some longer-term stuff. We are currently working on some supply areas that are very intriguing. We're not too worried about the supply side."

As outlined a year ago with much fanfare, Esperanza's project intends to link to an onshore gas-fired electric generation plant, of which there are several located in the Long Beach-Huntington Beach area, with a horizontally drilled tunnel buried 100 feet under the beach that would provide a conduit for water, communications and electrical lines to serve the offshore terminal while also providing an artery in which to run an undersea natural gas pipeline for bringing regasified LNG to shore and delivery to the Southern California Gas Co. transmission system (see Daily GPI, March 9, 2007).

Esperanza has maintained that its project would have no significant air quality or marine impacts; no petroleum fuels will be stored at the site; and whenever possible the emissions from the LNG ships will be minimized by using natural gas for the ship engines while undergoing the offloading of the shipments.

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