With two major liquefied natural gas (LNG) tanks now visible and half built along the Pacific Coast of North Baja California in Mexico and sponsor San Diego-based Sempra Energy talking about doubling the terminal’s 1 Bcf/d capacity by 2010, doubts are being raised about the four major Southern California LNG receiving terminal proposals in various stages of the regulatory approval processes. However, government officials, analysts and the four proponents say the other projects are in the race for the long haul.

A major report in last Monday’s Los Angeles Times quoted sources raising some doubts, but it also cited a Rand researcher/analyst, a California Energy Commission (CEC) gas expert and the City of Long Beach facility sponsors as contending there is room for at least one, and maybe two, additional facilities besides Sempra’s Costa Azul terminal, which is scheduled to be operational in 2008.

The three offshore proponents were equally bullish in brief interviews with NGI, including NorthernStar Natural Gas’ Clearwater Port, which is the furthest behind in the regulatory process, having resubmitted its application last June to the California State Lands Commission and the U.S. Coast Guard since assuming ownership of the old Crystal Energy project, which would be built 13 miles offshore Oxnard, CA, on the idled Platform Grace oil production facility.

“Our outlook and prospects are that the recent announcements by Sempra don’t really change anything,” said Billy Owens, an Orange County-based vice president with NorthernStar and Clearwater.”We think the prospects for one or more terminals in Southern California are still very positive.”

Owens said his company is “talking back and forth” almost daily to multiple agencies, including the two principal ones — the Lands Commission and the Coast Guard. With all approvals, Owens said the company thinks its facility can be under construction and operational by the fourth quarter of 2009. At the same time, Clearwater is in the “early stages” of talking to potential suppliers.

BHP Billiton said it is “close to the finish line” in getting a final joint state/federal environmental impact statement (EIS) and environmental impact report (EIR), the latter coming from the state. Billiton proposes to use its worldwide experience with on- and offshore energy facilities/equipment to develop Cabrillo Point, an LNG deepwater port about 22 miles offshore Oxnard, CA.

The third offshore Southern California proposed project is Woodside Natural Gas Inc.’s proposal to use specially built tankers that have regasification facilities as well as storage capability. Rather than unload the shipments in liquid form and store and gasify them in a facility, the supplies will be transferred directly as gas from the tankers into an undersea pipeline and transported to a proposed receipt point by Los Angeles International Airport where it would enter the Southern California Gas Co. transmission pipeline system.

Woodside filed last August for a deepwater port permit from the U.S. Coast Guard.

For the broader West Coast of the United States, NorthernStar also has its Bradwood Landing proposed LNG receiving site in the Columbia River on the Oregon side. It is further advanced in the permitting process and is conducting what Owens called “more mature discussions” with prospective suppliers. This is much further along than Clearwater Port in California.

For either site, NorthernStar sees absolutely no problems of gas quality with its proposed sources of incoming supplies, which remain confidential, said Owens, who added in response to a separate question from NGI that his firm never looked seriously at sites in Canada or Mexico for a West Coast location. “We considered Mexico very briefly, but we didn’t think it would make it cost-competitive,” said Owens, so the company focused more on the continental United States.

Discussions with the local utilities also have been ongoing for NorthernStar, said Owens, who called the discussions with Sempra’s SoCalGas at this point being restricted to the “physical interconnection and gaining access to the system. We haven’t actually talked to them about taking some of the LNG supplies; we’ve been talking to others who reside and take gas in California off SoCal’s system.”

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