The New England natural gas market breathed a sigh of relief last week when the U.S. Coast Guard lifted its ban on liquefied natural gas (LNG) tankers into Boston Harbor, clearing the way for Distrigas of Massachusetts LLC to receive overseas’ shipments once again at its Everett, MA, terminal.

The action by the Coast Guard last Tuesday put an end to a nearly three-week-old embargo on LNG shipments into the harbor in the wake of the Sept. 11 attacks on New York City and suburban Washington DC. The Coast Guard cited safety and security considerations when it closed the busy harbor, which borders Boston’s financial district and several other communities, to LNG tanker traffic (See NGI, Oct. 10) .

Both Distrigas and the Coast Guard declined to say when the next LNG tanker would be due. It “has never been our company’s practice to publicly announce ship arrivals, particularly now in the interests of enhanced security,” said Distrigas in a prepared announcement last week.

Petty Officer Virginia Adams said the Coast Guard had made its decision to remove the LNG freeze after consulting with the “unified command” that had been established in the wake of the terrorist attacks. The “unified command” will address all port security and safety issues, with a focus on LNG transportation through the harbor and off-loading at Distrigas’ terminal. It includes representatives from the Massachusetts Environmental Police, Massachusetts State Police, state and federal agencies, the energy industry and Distrigas, she noted.

Adams said the Coast Guard was “satisfied” after “extensive analysis” of the situation that the safety and security concerns associated with LNG shipments had been met.

Since the attacks, the Coast Guard in Boston had turned away at least two shipments that were destined for the Distrigas terminal in Everett, with the last one being a tanker carrying about 33 million gallons of LNG from Trinidad. This forced Distrigas to declare force majeure — releasing it from its contract obligations with its major customers — and sent New England gas utilities, power producers and industrial customers looking for alternative sources of supply for the winter heating season.

Many feared that the LNG freeze — if it had remained in place for an extended period of time — would have had a significant impact on New England, given that Distrigas provides an average of 15% to 20% of the region’s natural gas supplies on an annual basis. This climbs to about 35% during the winter, as the company supplies LNG to local storage facilities for peak shaving. The company’s Everett facility has storage capacity of 3.5 Bcf, and a send-out capacity of 450,000 MMBtu/d by vapor and 100,000 MMBtu/d by truck.

The review by the Coast Guard of the security and safety procedures for tanker transportation of LNG through Boston Harbor was “eminently reasonable” in the aftermath of the Sept. 11 terrorist strikes, said a London expert, but he believes the tankers would pose a “very tough target for terrorists.”

The LNG tankers “are exceptionally robust, with their gas-bearing tanks located within a double-hull configuration that gives enormous protection from high-energy impacts on the outer hull,” said John Gyles, general manager of the Society of International Gas Tanker and Terminal Operators (SIGTTO), in response to written questions that were submitted by NGI.

The “strength of their design was amply demonstrated when the ‘El Paso Paul Kaiser’ grounded on rocks at high speed near Gibraltar in 1979. There was massive damage to the ship’s bottom structure but absolutely no penetration of the inner hull and gas containment system — the entire cargo of LNG was recovered,” he noted.

“…[T]here has never been an uncontrolled release of gas from [an] LNG tanker, nor has there ever been a catastrophic failure of penetration of a tanker’s containment system.” Gyles acknowledged that a deadly accident occurred with LNG in Ohio many years back, but he noted that involved “land-based storage of liquefied gas,” not LNG that was being transported.

“The key fact of life about these ships is that they are, indeed, very safe if they are operated by properly trained and responsible people,” he said.

Nevertheless, Gyles said the decision by the Coast Guard in Boston to temporarily halt LNG shipments through Boston Harbor was understandable following the “diabolical terror” of Sept. 11. They needed to be “satisfied that civilians are not placed at undue risk from ruthless and determined attackers” who might view LNG tankers as enviable targets.

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