Citing his authority under the federal Deepwater Port Act, New Jersey Gov. Chris Christie Tuesday vetoed a proposal by Liberty Natural Gas LLC to build a liquefied natural gas (LNG) terminal 16.2 miles off the New Jersey coastline.

"Offshore LNG poses unacceptable risks to the state's residents, natural resources, economy and security. We must ensure that our 126 miles of shoreline remain an economic driver for tourism, and that our fishing and shellfish industries remain healthy and productive now and for future generations."

Last year Liberty filed applications to construct and operate its deepwater port and a submerged pipeline with the Federal Energy Regulatory Commission, Maritime Administration and the U.S. Coast Guard (see Daily GPI, Nov. 3, 2010). The proposed port, which would remain fully submerged when not in use, would be served by LNG regasification vessels that would transport LNG from around the world and would regasify the LNG onboard when they reach the port.

The proposed onshore pipeline, which would be 9.2 miles long, would accept gas from a submerged pipeline that would tie in with the deepwater port. The onshore pipeline would be designed to transport up to 2.4 Bcf/d of gas to markets in New Jersey, New York and surrounding areas. The Jersey City, NJ-based company had expected the pipeline, which it estimated would cost $550 million, to be in service by late 2011.

The onshore pipeline would extend from the high water mark on the shoreline in Amboy, NJ, to Linden, NJ, interconnections with the interstate pipeline systems of Texas Eastern Transmission LP and Transcontinental Gas Pipe Line Co.

In a letter announcing the veto to David Matsuda, administrator of the federal Maritime Administration, Christie said Liberty's LNG project could jeopardize the state's efforts to become a renewable energy leader.

"New Jersey has invested much time, energy and resources into encouraging renewable energy, and its commitment has made the state one of the leaders in the nation on this front. The Liberty Natural Gas project could stifle investment in renewable energy technologies by increasing reliance on foreign energy sources, which would undermine all of the progress made by New Jersey to promote sustainable energy."

In addition to potential impacts on recreational and commercial fishing, shellfisheries and tourism industries, other reasons for the Christie administration's opposition to the Liberty proposal include its proximity to large population centers, potential discharges of harmful wastewater, increased homeland security demands and the disruption of port commerce, according to the governor's office.

Christie's veto is the latest in a series of setbacks for LNG projects offshore New Jersey. Last year Atlantic Sea Island Group LLC cited economic conditions -- along with the retirement of its founder and CEO -- when it shelved its proposal for a deepwater LNG terminal to be sited on a man-made island off the coasts of New York and New Jersey (see Daily GPI, July 29, 2010). And in November ExxonMobil Corp. said BlueOcean Energy, a proposed $1 billion floating LNG project offshore New Jersey, had been "put on hold" (see Daily GPI, Nov. 22, 2010).

Liberty Natural Gas is affiliated with Excalibur Energy Inc., a 50-50 joint venture of Canadian Superior Energy Inc. and Global LNG Inc., a New York-based privately held company.

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