El Paso Corp. will be headed to FERC next month with an application for the first U.S. LNG “land bridge” regasification facility located offshore Louisiana. The company, which believes there are limited sites for land-based liquefied natural gas (LNG) import terminals in North America, also hopes to be filing applications for similar facilities located offshore New York City, New England, the Mid Atlantic region and Atlantic Canada.

“We have the mineral rights to the leaseholds for [the offshore Louisiana] location and it will connect to two existing pipelines, so it will be a very capital-efficient and engineering-efficient first location,” Kathleen Eisbrenner, chief commercial officer at El Paso Global LNG, said in an interview with NGI. She said the facility would deliver about 300,000-450,000 Dth/d of gas to the Gulf Coast pipeline grid.

Eisbrenner said an application for a facility offshore New York should be filed with FERC either by the end of this year or in the first quarter of 2003. “We have multiple sites: one in eastern Canada, one in New England and one in the Mid Atlantic, where we are negotiating with customers who are big gas distributors in that area.”

El Paso got the idea from Statoil’s offshore floating storage and production operation in the North Sea, in which crude oil is produced and put into ships through a flexible pipe and buoy system. “That buoy is the core of the energy-bridge technology that we’re applying to conventional LNG ships,” said Eisbrenner. “What our ships will do is kind of the opposite… We’ll go get the LNG and bring it to the East Coast, let’s say offshore New York, and the ship will fit on the buoy and discharge natural gas into the pipeline system to shore. It will sit there from five to 10 days, and when it’s empty a second ship will come.”

Because of environmental, NIMBY (not-in-my-back-yard) and security issues, El Paso sees the only sites for potential North American land-based facilities in the Bahamas, North Carolina and the east and west Coasts of Mexico. Those also are the only sites with enough land where there is access to deep-water for a port, which also is close to a pipeline with adequate takeaway capability. El Paso dropped the North Carolina site because of an inadequate market response and large expense. “We anticipate that site will end up being one of our energy-bridge sites,” said Eisbrenner.

She said El Paso may use the proposed land-based terminal in the Bahamas as a hub for land-bridge vessels. “We’re going to add fractionation in the Bahamas so that we can take quality specs of LNG of every sort from around the world and be able to strip the liquids and send very low Btu gas to Florida. We will also be able to use [the Bahamas] then as essentially a transshipment point for the energy bridge project. We could take energy bridge ships there and load up lean LNG and deliver it to New York.”

Eisbrenner said that a traditional LNG import terminal costs $400 million at minimum to build, while the land-bridge terminals cost only as much as about $385 million. In addition, the land-bridge terminals will be located at least 12 miles offshore beyond the horizon so anyone onshore would not be able to see the ships.

She said El Paso is not shying away from the West Coast. “On our development list we have several West Coast locations, but the East Coast seems to be where the markets are most interested in supporting these projects.

“Our competition is really a pipe from Alaska or from Nova Scotia or additional compression on long haul pipes from the Gulf and those costs keep going up because of NIMBY and safety issues. We think we are going to be increasingly competitive in the future.”

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.