Florida Power & Light (FP&L) affiliate FPL Group Resources LLC has signed a conditional agreement with Ras Laffan Liquefied Natural Gas Co. Ltd. (II), a joint venture between Qatar Petroleum and ExxonMobil RasGas Inc., for supply of liquefied natural gas (LNG) from Qatar to a proposed LNG import terminal at South Riding Point on Grand Bahama Island.

Under terms of the agreement, FPL Group would buy 800,000 MMBtu/d of LNG, or about six million tons per year, to be delivered over a 25-year period beginning in mid-2008. The feed gas would come from Qatar’s North Field, the largest offshore non associated natural gas field in the world with proven reserves in excess of 900 Tcf. FPL plans to sell the regasified LNG to its affiliate FP&L and to other wholesale customers throughout Florida.

“Today’s announcement is another important step in bringing an additional supply of much needed natural gas to South Florida,” said Brad Williams, vice president of gas projects for FPL Group Resources. “We look forward to continue working with the Bahamian government to ensure the success of this project.”

FPL Group has an option to buy from El Paso 100% of the proposed LNG terminal and 50% of the proposed Seafarer Pipeline, which would transport the regasified LNG from the Bahamas 88 miles to South Florida. The terminal still is being reviewed by the Bahamian government and the pipeline recently began the prefiling process at the Federal Energy Regulatory Commission (FERC).

“We anticipate a close and mutually beneficial relationship with the Bahamas, as that country is an integral part of this project’s success,” said Ibrahim Ibrahim, vice chairman of the RasGas board of directors. RasGas said it is currently engaged in projects that are expected to deliver over 36 million tons per year of LNG to Korea, India, Europe and the United States by 2011.

The Bahamas project would begin deliveries in 2008. However the supply agreement is conditioned on FPL Group Resources successfully competing in a gas supply request for proposals (RFP) process set up by utility affiliate FP&L, which needs new sources of gas supply to support rapidly growing power demand.

FPL Group may have the advantage because of its affiliation with the utility company, but it will face stiff competition from two other LNG supply projects, both of which include proposed LNG terminals that are under review by the Bahamian government and separate pipeline projects that already have received final certificates from FERC.

“At this point, we are working closely with El Paso and we think the El Paso project makes the most sense,” said FPL Group spokesman Steve Stengel. “But we have not made that final determination on exercising our purchase options.” Stengel said FPL expects the Seafarer pipeline to have a final certificate from FERC by this time next year. “Our hope would be that we would have approval of the LNG terminal as early as late this year or sometime early next year.”

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