The Williams Companies got an early Christmas gift last Wednesday when the Federal Energy Regulatory Commission reaffirmed its Oct. 12 certificate that allowed Williams to reopen and expand the Cove Point LNG import terminal in Lusby, MD. The company faced the possibility of losing the certificate when the Commission, in response to sharp criticism from Sen. Barbara A. Mikulski (D-MD), initiated a review of the national security concerns associated with reactivating the LNG facility.

Mikulski denounced FERC’s post-Sept. 11 approval of the re-opening of the Cove Point LNG import facility because, she said, it would permit “flammable” LNG to be imported to a site within four miles of the Constellation Energy-owned nuclear facility at Calvert Cliffs, MD. She called the proposed reopening of import operations a “nightmare scenario,” particularly in the wake of the terrorist attacks.

The outspoken Mikulski last week called the Commission’s ruling “premature,” noting that a number of federal agencies and departments still are examining the national security and safety risks of the Cove Point LNG terminal.

“…[T]he fact is,” said Mikulski, “they’ve not completed their evaluations. The Coast Guard will not make any decisions as to whether LNG tankers can safely travel into the Chesapeake Bay until after they bring all the experts together in January. Meanwhile, FERC is saying, ‘Damn the torpedoes, full speed ahead.'”

But the security concerns raised by the senator already were addressed last July when the Commission did its environmental review, said FERC Chairman Pat Wood last week. He doesn’t believe the LNG project will pose any significant threat to the Calvert Cliffs nuclear facility. However, he admitted he felt “much more comfortable” with the Commission’s original order after FERC did its closed-door review of security issues.

Cove Point LNG import services are scheduled to start up next April. Williams also is planning to build a fifth LNG storage tank to boost capacity to 7.8 Bcf. The 850,000-barrel tank has an in-service date of Sept. 1, 2003. The $103 million expansion project would make Cove Point one of the top LNG import terminals in the nation.

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