Florida Gov. Jeb Bush and his cabinet have given final approvals to both Tractebel North America’s Calypso Pipeline project and the AES Ocean Express pipeline, two separate pipelines that potentially could bring up to 1.7 Bcf/d of regasified LNG to southern Florida from two proposed liquefied natural gas (LNG) import terminals in the Bahamas starting in 2007.
The only remaining hurdles for the projects are final authorizations from the prime minister of the Bahamas and his cabinet. Those are expected sometime this summer.
The state of Florida voted to grant Sovereign Submerged Lands Easements to the competing pipelines and to approve the issuance of Environmental Resource Permits to the projects by the Florida Department of Environmental Protection. The Federal Energy Regulatory Commission (FERC) approved them both earlier this year (see Daily GPI, Jan. 23 and March 25).
Tractebel Calypso plans to build a $132 million 42-mile U.S. jurisdictional pipeline, including six miles of onshore line in Broward County, to transport up to 832,000 MMBtu/d of gas to a connection with Florida Gas Transmission (FGT) from a connection with a non-jurisdictional line at the international boundary. The LNG terminal would be built in Freeport, Grand Bahama. Tractebel Bahamas LNG has received its approval in principle from the government of the Bahamas and is awaiting its final approval of a Bahamian Environmental Impact Statement.
The U.S. segment of the Calypso pipeline would make landfall at Port Everglades, FL, and then travel onshore to a proposed interconnection with FGT adjacent to Florida Power & Light’s (FPL) Lauderdale power plant. Tractebel expects to complete construction of the U.S. portion of the pipeline in 15 months, but construction of the Freeport LNG terminal and the Bahamian leg of the line is expected to take up to 32 months.
“We have now received all major U.S. approvals required to proceed with this project,” noted William P. Utt, CEO of Tractebel North America. “Once completed, the pipeline will be capable of supplying Florida with the clean-burning natural gas it needs to meet its increasing energy demands.” Tractebel anticipates initial gas deliveries to begin as early as 2007.
The AES Ocean Express project would include a 54-mile U.S. leg and a Bahamian pipeline leg that would transport 842 MMcf/d of gas to southern Florida from a proposed LNG import terminal in the Bahamas. AES is dredging sand and soil to create its own 90-acre industrial island, called Ocean Cay, for its LNG plant.
Meanwhile, El Paso Corp. also is still moving forward with its Seafarer pipeline, another 750 MMcf/d project that would deliver gas from a Bahamas LNG terminal to southern Florida (see Daily GPI, Jan. 26).
Although El Paso’s project is behind in the regulatory process, it recently gained a key market ally in FPL Group, parent company of Florida’s largest electric utility, Florida Power & Light. FPL has purchased an option to buy an ownership stake in Seafarer and El Paso’s LNG terminal, which could give the El Paso project an edge over the others.
So far, neither AES nor Tractebel have end-use customers for their pipeline capacity and LNG supply. AES’s marketing affiliate has signed an agreement to take all the capacity on Ocean Express.
“We haven’t signed any agreements yet,” said AES spokesman Scott Cunningham. “Obviously we are both working on potential customers of the gas and potential suppliers. Our commercial model is very much based upon a low risk, assured supply of gas into Florida. So we are looking at signing long- term contracts. Our belief is that with approval from the Bahamas government, particularly if we’re the first one to get that approval, a strong case will be made that we will be providing that next leg of required natural gas in Florida.”
The state of Florida is expected to require significant additional natural gas to support rapid development of gas-fired power generation. FPL is expected to issue a request for proposals for gas sales within the next month, the results of which could determine which projects move forward first.
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