The backers of the Crown Landing LLC liquefied natural gas (LNG) terminal, proposed for the Delaware River in Gloucester County, NJ, have thrown in the towel after struggling to advance the project in a world of booming domestic gas supplies and increasing thirst for LNG abroad.

“During the past two years the combination of the significant increase in natural gas production from North American shale resources, which has resulted in lower [gas] prices, and the growth in demand for LNG in the rest of the world make it unlikely the company can secure supplies of LNG on economic terms attractive enough to ensure the sustained profitability of the project at the proposed site,” Crown Landing CEO Gordon Shearer told FERC in a letter Friday. “As such, the company has elected to abandon development at this site.”

The company said it is surrendering the certificate it was granted by the Federal Energy Regulatory Commission (FERC) in 2006.

With shale gas supplies growing and plans in the works to export LNG from the U.S. Gulf Coast and the western coast of North America (see related story), the writing was on the wall for Crown Landing. The project had also drawn opposition by the state of Delaware.

Crown Landing had sought several deadline extensions at FERC; the most recent was last May when the company asked the Commission for a one-year extension so it could revise its vapor dispersion model (see Daily GPI, May 9, 2011).

An affiliate of Hess LNG acquired the Crown Landing project from BP plc in late 2009 (see Daily GPI, Nov. 4, 2009). It has had a controversial run since its inception. In October 2008 BP suspended the terminal plans after the U.S. Supreme Court ruled that the state of Delaware could block the construction of an off-loading pier in New Jersey (see Daily GPI, Oct. 9, 2008; April 1, 2008).

Too much domestic gas last year did in another Hess LNG import project. Hess last June withdrew its application to construct Weaver’s Cove LNG in Fall River, MA (see Daily GPI, June 15, 2011). “The significant increase in natural gas production from shale resources in North America resulting in lower prices as well as the growth in demand for LNG in the rest of the world make it unlikely the company can secure supplies of LNG on economic terms attractive enough to ensure the sustained profitability of the project,” Shearer, who also is Hess LNG president, said at the time.

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