Bowing in part to pressure from Connecticut’s governor, attorney general, other state officials and congressional delegation, FERC on Thursday imposed more than 80 environmental, security and safety conditions in its order approving Broadwater Energy LLC’s controversial floating liquefied natural gas (LNG) project and associated pipeline to be located in Long Island Sound.

The Federal Energy Regulatory Commission’s (FERC) approval comes a week after a state task force issued a report that Connecticut Gov. M. Jodi Rell said was a “scathing indictment of FERC’s single-minded focus on approving the Broadwater platform no matter what the evidence shows” (see Daily GPI, March 14). The project would be located approximately nine miles off the shore of Long Island, NY, and 10 miles from Connecticut.

FERC Chairman Joseph Kelliher said he regretted that the Broadwater proceeding had become so controversial. “I respect public opinion, and we have gone to great lengths to respond to the legitimate concerns raised by the public. Doing so has been made more difficult by the attitude of some public officials in the region, who have chose to exploit and inflame public fears. These public officials have done a great disservice to the citizens in the region,” he said.

“There have also been charges that [the] FERC environmental and safety review has been inadequate. Those charges are manifestly false,” Kelliher said.

FERC is “first and foremost a safety agency,” but “we are not unmindful of the need for additional supplies in the Northeast,” particularly in the areas — Long Island, New York City and Connecticut — that would be served by the Broadwater terminal, he said. Absent greater natural gas supplies, consumers in the Northeast will face substantially higher gas prices, Kelliher said.

The construction of the Broadwater LNG project is necessary unless consumers in New York and Connecticut take the extraordinary step of reducing their gas consumption, said Commissioner Jon Wellinghoff. While the public “has raised serious and valid concerns,” he said Broadwater is a “market-driven project.”

For Commissioner Philip Moeller, “Broadwater has the potential to become a success story for this region.”

Broadwater Energy filed its application with FERC in February 2006, and immediately it drew widespread calls for federal regulators to reject the LNG terminal project (see Daily GPI, Feb. 1, 2006). FERC staff pointed out that the Broadwater terminal would not be the first commercial project to operate in Long Island Sound. The shorelines include a number of industrial and commercial areas, some of which have been operating for decades; and an estimated 4,000 to 7,000 commercial vessels transit the sound annually, staff reported. In addition, KeySpan’s Northport and ConocoPhillips’ platforms have been operating there for more than 30 years.

The proposed Broadwater offshore terminal, which received an environmental nod in January, would have an average sendout capacity of 1 Bcf/d and peak sendout of 1.25 Bcf/d (see Daily GPI, Jan. 14). Broadwater Energy, a partnership of Shell Oil and TransCanada Corp., would operate the facility, while Shell would own the capacity and supply the LNG. The project, which is targeted for service in December 2010, would cost approximately $700 million to build.

The LNG would be delivered by tankers, temporarily stored on the floating LNG facility, vaporized and then transported in a new 21.7-mile subsea pipeline that would have an offshore connection with the Iroquois Gas Transmission pipeline that extends across Long Island Sound. Broadwater estimates that an average of 118 tankers annually (two to three per week) would be needed to meet the project’s planned sendout volume. The tankers would enter Long Island Sound from the Atlantic at the eastern end of the sound and travel down the middle to the terminal, away from Long Island and Connecticut harbors and not approaching the New York harbor.

Broadwater estimates that approximately half of the natural gas sendout from the offshore LNG terminal would be delivered to New York City, about 25-30% to Long Island and the remaining 20-25% to Connecticut. Currently, New York City, Long Island and Connecticut get about 85% of their natural gas via pipeline from the Gulf of Mexico and Canada, areas where production is expected to wane. Conversely, gas consumption is projected to increase in the region in the coming years, underscoring the need for LNG import supplies.

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