Some Boston officials, including Mayor Thomas Menino, are hoping a new plan for an LNG terminal offshore Gloucester, MA, will mean fewer LNG cargo ships traveling through Boston Harbor to the existing Distrigas terminal, but growing gas demand in the region probably would support both LNG terminals.

Excelerate Energy LLC, which purchased El Paso Corp.’s offshore LNG Energy Bridge technology late last year, announced plans for the Northeast Gateway LNG project last week. The $200 million LNG terminal would be located 10 miles offshore Gloucester, which is about 50 miles northeast of the existing Everett, MA, LNG terminal operated by Distrigas. Excelerate expects to have the terminal operating and connected to Duke Energy’s HubLine pipeline in Massachusetts Bay by the end of 2006.

The Houston-based company, which is backed by Oklahoma oil billionaire and philanthropist George B. Kaiser, is expected to start up the first new LNG terminal in the United States by next January. The offshore Louisiana project received a record of decision last December from the U.S. Coast Guard and is on schedule and on budget, Excelerate CEO Kathleen Eisbrenner recently told NGI (see NGI, April 5). However, upstream LNG supply constraints probably will delay deliveries well into 2005, she said (see related story).

Excelerate’s Gloucester terminal would use the same construction and operating techniques as the proposed offshore Louisiana Energy Bridge, including onboard regasification and gas delivery into two specialized offshore buoys with pipeline links to the local HubLine pipeline through about 12 miles of 24-inch diameter pipe.

Statoil developed the technology for a floating, production, storage and off-loading shuttle tanker operation for its remote oil production in the North Sea. A special buoy became the enabler for the Statoil operation in the North Sea, and Excelerate has copied that for its gas delivery application. The one part of the project that has not been tested is the onboard vaporization that will be added to each 138,000 cubic meter LNG cargo ship.

Excelerate executives met on June 4 with Gov. Mitt Romney and Mayor Menino, who both expressed interest in the plan. The terrorist attacks of Sept. 11, 2001 have raised significant concerns over whether LNG tankers entering Boston Harbor are potential terrorist targets or transporters. Menino has considered the LNG tanker traffic in Boston to be one of the city’s main security dangers.

Distrigas has added multiple new security measures, including Coast Guard escorts, police snipers and divers to check for bombs. It also shuts down the Tobin Bridge when cargoes arrive. According to the Boston Globe, state police estimate the new security measures have cost taxpayers more than $1.4 million.

“There’s no question in my mind that tankers coming into the port could be eliminated if we really wanted to do it, and I think this is the beginning of that process,” Menino told the Globe. He called Excelerate’s proposal “an interesting concept that we should seriously look at.”

Excelerate said the “siting of these offshore facilities avoids near-shore and onshore impacts and minimizes risks to public safety.

“Placing the project miles away from population and out of high traffic areas ensures that risks are kept to a minimum and that operational security is maintained throughout the LNG regasification process.”

Excelerate said that the mooring buoy system is secured to the seabed allowing the Energy Bridge ships to “withstand 100-year storm conditions when connected.” When not in use, the system rests beneath the surface of the water at depths that “do not present a hazard to seagoing vessels.”

According to Excelerate, the terminal would supplement existing LNG supply to the gas-starved region rather than displace gas from Distrigas. However, the offshore facility, with more than 400 MMcf/d of sendout capacity, possibly would reduce some LNG traffic in Boston Harbor.

Eisbrenner insisted that the company is not trying to compete with Distrigas. She said it would deliver incremental supply. Excelerate plans to file applications for federal environmental permits by December. The Coast Guard would coordinate the reviews of several federal agencies since the site is just outside state jurisdiction in federal waters.

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