FERC has indicated that it may cease processing Calais LNG's proposal to build a proposed $1 billion liquefied natural gas (LNG) import terminal and associated pipeline project in light of the loss of a key financial backer.

"We are aware of the recent events regarding Calais LNG Project Co. LLC's loss of original investor GS Power Holdings LLC, and the expiration of its option to purchase agreement for the project site. As a result, we are assessing whether it remains appropriate for Commission staff to continue to process your applications," wrote Jeff Wright, director of the Federal Energy Regulatory Commission's (FERC) Office of Energy Projects, in a letter order [CP10-31, CP10-32].

"Within 10 days of the date of this letter, please provide a schedule of Calais LNG's planned activities in securing project financing and appropriate title, right or interest in the project site," he said.

In July Calais LNG announced that a key financial backer, GS Power Holdings LLC, had pulled out of the project (see Daily GPI, Sept. 24). The Maine Board of Environmental Protection at the time agreed to a Calais LNG request to put its permit request on hold until December to give the company time to line up financing and gather information required by state regulators.

The proposal seeks to site the import terminal on the St. Croix River in Calais, ME. The terminal would have three storage tanks and the capacity to deliver 1 Bcf/d of revaporized LNG to the 20-mile, 36-inch diameter Calais Pipeline, which would interconnect with Maritimes & Northeast Pipeline in Princeton, ME.

Given that Calais LNG has been without financial capacity since July and without title, right or interest since September, the Save Passamaquoddy Bay group called on FERC to "dismiss Calais LNG without prejudice from the federal permitting process, allowing them to refile new permits if they eventually solve these fundamental permitting deficiencies."

Save Passamaquoddy Bay is a three-nation alliance -- United States, Passamaquoddy and Canadian -- of individuals and organizations seeking to save the bay from LNG development.

©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.