Citing the uncertainty surrounding the development of liquefied natural gas (LNG) facilities in the Bahamas, El Paso Corp.’s Seafarer US Pipeline System Inc. has withdrawn its application at FERC to build the U.S. leg of the proposed Bahamas-to-Florida Seafarer natural gas pipeline. But it kept open the possibility that it may refile at a later date if market conditions improve.

“Because supplies of liquefied natural gas (LNG) have not been committed and conditions for developing LNG infrastructure in the Bahamas remain uncertain, Seafarer cannot now make the substantial commitment to perform the site-specific geotechnical surveys” that are required by a FERC letter order issued on Sept. 21, an attorney for El Paso said in a letter to the agency Friday.

“Withdrawal of the application will relieve Commission staff, the interagency team and participants of further regulatory burden…We will keep the Office of Energy Projects informed of plans to reapply when conditions improve,” he said.

The Houston-based energy company filed its application for the $226 million Seafarer pipeline project in November 2004 (see Daily GPI, Nov. 18, 2004). The Seafarer project hinged on the development and construction of an 87-mile international pipe segment from the proposed High Rock LNG regasification terminal in the Bahamas to the United States-Bahamas Exclusive Economic Zone (EEZ) in the Atlantic Ocean. That part of the project has yet to materialize. The Seafarer line was to connect with the Bahamas pipeline at the EEZ international boundary and extend to an onshore interconnect with Florida Gas Transmission system in South Florida, where it would deliver 1 Bcf/d.

The Seafarer Pipeline is not the only LNG-related project in the United States to make adjustments in light of the uncertain regulatory climate in the Bahamas. In May, Calypso U.S. Pipeline LLC, a subsidiary of SUEZ Energy North America Inc., asked FERC for authorization to modify its pipeline project that would transport LNG-sourced gas to Florida in order to accommodate the construction of a proposed deepwater LNG port off the southeastern coast of Florida (see Daily GPI, May 18).

The original plans called for a SUEZ Energy affiliate to construct a new LNG terminal in Freeport, Grand Bahama and a connecting Bahamian pipeline, which would tie in with the Calypso line at the EEZ international boundary. But a company official said it didn’t have “any clear understanding” when the Bahamas would make a decision on the terminal and its segment of the pipeline.

SUEZ Energy filed its application earlier this year with the U.S. Coast Guard to build a deepwater port 10 miles off the southeastern coast of Florida, which would serve as an offshore delivery point for LNG transported by tankers. SUEZ Energy expects the Coast Guard to officially deem the company’s deepwater port application complete later this month, which will be followed by a one-year review process, said spokeswoman Paula Rockstroh. The company anticipates that the deepwater port will be ready for service by 2010.

Seafarer’s decision to withdraw its application “doesn’t have any impact on us either way,” she told NGI. She noted that SUEZ Energy’s previous relationship with El Paso to combine their LNG projects has been dissolved. Rockstroh further said that SUEZ Energy has not given up on doing an LNG terminal and connecting pipeline in the Bahamas. “We are still watching the Bahamas. We would like to do a project there.”

The Federal Energy Regulatory Commission had given Calypso up to three years from the date of its March 2004 certificate — rather than the typical two years — to complete the 41.9-mile pipeline from the EEZ boundary to Florida. But because of the proposed modifications, the company has asked FERC for authority to defer the in-service date to June 30, 2010.

Calypso also asked for permission to enlarge the diameter of the pipeline project that would deliver gas to Florida from the proposed deepwater LNG port and possibly later from a land-based terminal in the Bahamas.

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