FERC Chairman Patrick Wood said last Monday that at least two of the dozen of liquefied natural gas (LNG) terminals proposed for New England and eastern Canada need to be built by the end of this decade to provide the region with sufficient supplies of gas for winter heating and power generation, according to published reports.

“If two of those get built, you should be in good shape. If we don’t get any of those built, we’ll be in trouble,” Wood was quoted saying by the Boston Globe at an energy conference sponsored by the Independent System Operator New England.

The newspaper reported that Wood said it may be possible for the LNG plants proposed for Nova Scotia and New Brunswick to satisfy much of the natural gas demand for the region, ruling out the need for construction of LNG terminals along the Massachusetts coast that have been met with considerable local opposition.

But Wood told NGI that he “didn’t go that far.” He noted he simply said New England would need two new LNG facilities by the end of the decade, with a combined capacity of 2 Bcf/d, to meet the growing demand of power generators.

Whether two new LNG terminals are built will depend on the pipeline infrastructure in New England, he said. “I think the pipelines from Canada that exist probably [could] handle the output from one of the LNG facilities,” Wood noted, adding that he believed “substantial” more pipe capacity would be needed.

The chairman said interstate gas pipeline capacity remained tight in the New England area, and that no additional capacity was projected to serve the region through 2005. Existing pipeline capacity in the region was pegged at 3.5 Bcf/d. New England gas demand hit that level in January 2003, and slightly exceeded that amount last January, according to Wood. New England gas demand is expected to average about 3.25 Bcf/d next January.

New gas supplies, whether LNG or conventional gas, are needed to meet the region’s growing power generation appetite, he said. New England’s power generation capacity rose 23% to 34,521 MW this year from 27,956 MW in 2000. Gas-fired generation accounted for 13% of overall generation in the New England Power Pool in 1998, but is expected to represent 57% of total generation in 2008.

Generation is responsible for the soaring gas demand in New England, Wood said. Overall consumption was estimated at 750 Bcf in 2003, and is expected to near 800 Bcf in 2005 and shoot past 800 Bcf in 2007 and 2008.

Gas-fired generation, which accounted for 30 Bcf of gas demand in New England in 1993, climbed to 246 Bcf in 2003, and could reach as high as 324 Bcf by 2008.

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