FERC has given preliminary environmental approval to Broadwater Energy LLC’s proposed deepwater liquefied natural gas (LNG) import terminal that will be sited in Long Island Sound about 11 miles off the coast of Connecticut and nine miles offshore Long Island.

“Based on the analysis included in the draft [environmental impact statement], we have determined that construction and operation of the proposed project, with the adoption of the FERC and Coast Guard recommendations, would result in limited adverse environmental impacts,” said FERC staff and several other federal and state participating agencies in the DEIS on the proposed terminal of Broadwater Energy, a joint venture of TransCanada Corp. and Shell [CP06-54].

The cooperating agencies were the U.S. Coast Guard, Environmental Protection Agency, U.S. Army Corps of Engineers, National Oceanic and Atmospheric Administration and the New York Department of State. Broadwater Energy said it expects to receive a final environmental impact statement in 2007 following a public comment period and hearings.

The proposed Broadwater Energy offshore terminal would include a floating storage and regasification unit (FSRU) with an average sendout capacity of 1 Bcf/d and peak sendout of 1.25 Bcf/d. Broadwater Energy would operate the facility, while Shell would own the capacity and supply the LNG. The project, which is expected to go into service in late 2010, would cost approximately $700 million to build.

The FSRU is a ship-like vessel that would be moored in Long Island Sound. It would store about 8 Bcf of natural gas and supply enough natural gas to meet the energy needs of four million New York and Connecticut residences, the company said. The bulk of the natural gas is expected to be used by the region’s power plants to supply residents with affordable electricity year round. Broadwater Energy estimates that the average homeowner will see savings of $300 annually as a result of the project.

Once constructed, approximately two to three tankers would arrive each week to offload LNG into the facility where it would be stored in liquid form until it is regasified and transferred by a 22-mile subsea pipeline to the Iroquois Gas Transmission System in Long Island Sound and delivered to New York and Connecticut markets, according to Broadwater Energy.

Several other LNG projects currently are in the works in New England, New York and New Jersey. The Federal Energy Regulatory Commission staff believes that at least three LNG projects probably would be needed to meet demand growth in the region. Additional pipeline capacity also eventually would be required to service New York City and the region.

However, all of the projects proposed so far have encountered stiff environmental, landowner and sometimes regulatory opposition. As a result, TransCanada and Shell will face a challenging uphill battle to get their proposed LNG terminal approved and constructed.

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