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FERC Gives Environmental Nod to Downeast LNG

The Federal Energy Regulatory Commission Friday issued a draft environmental review of Downeast LNG Inc.'s proposal for a liquefied natural gas (LNG) import terminal in Robbinston, ME.

"We conclude that construction and operation of the Downeast LNG project would result in some adverse environmental impacts. However, most of these impacts would be reduced to less-than-significant levels with the implementation of Downeast's proposed mitigation measures and the additional measures we recommend," FERC staff and cooperating agencies said in the draft environmental impact statement (DEIS) on the Downeast import terminal and associated pipeline project [CP07-52, CP07-53].

Some of the key reasons for the staff's decision in the DEIS included:

Downeast LNG proposes to import on average about 500 MMcf/d of LNG with peak deliveries of 625 MMcf/d at terminal facilities on the south side of Mill Cove in the Town of Robbinston in Washington County, ME. The proposed terminal would be located on an 80-acre parcel near the confluence of Passamaquoddy Bay and the St. Croix River.

Downeast LNG is seeking FERC authorization to build a new marine terminal that would include a 3,862-foot-long pier with a single berth; two LNG storage tanks, each with capacity of 160,000 cubic meters; LNG vaporization and processing equipment; and a 29.8-mile, 30-inch diameter natural gas pipeline.

The proposed sendout pipeline would transport gas from the LNG terminal to an interconnect with Maritimes & Northeast Pipeline LLC (M&NE) near the town of Baileyville, ME. "We determined that the M&NE system may not have sufficient capacity to transport the natural gas volumes from the interconnection with the Downeast pipeline," the DEIS said.

Downeast has consulted with M&NE about a possible expansion, but "M&NE has not indicated any intent to construct these facilities and does not have an application before the FERC," it noted.

The Downeast LNG and pipeline project has faced its share of problems over the past years, putting it almost in the same class as the embattled Weaver's Cove LNG facility planned for Fall River, MA, in terms of the level of opposition. The project has been the target of criticism in Maine (see Daily GPI, April 12, 2007). Downeast LNG also has run into opposition from Canada, which has objected to tankers using its waters to transport LNG to Maine terminals (see Daily GPI, Feb. 16, 2007).

Downeast LNG's competition in Maine has been narrowed. In 2008 FERC dismissed Quoddy Bay LNG's application to build a 2 Bcf import terminal at Split Rock, ME, and a storage project in Perry, ME, citing the failure of the company to provide the agency with requested information (see Daily GPI, Oct. 21, 2008).

The proposed Calais LNG project slated for Maine, however, is still on record. The proposed terminal would be located on a 330-acre site about seven miles south of downtown Calais along the St. Croix River. One of the partners in the LNG terminal project is Goldman Sachs. The company plans to conduct a binding open season, starting Friday (May 22) and running through June 12, for capacity on a 20-mile, 30-inch diameter sendout pipeline that would connect the import terminal facilities to M&NE in Baileyville. For further information on the open season, contact Carl Myers at (610) 568-1357.

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