While some environmentalists lambasted the Maritime Administration last week for its conditional approval of Shell Gas & Power’s Gulf Landing LNG import terminal offshore Louisiana, the Industrial Energy Consumers of America (IECA) urged several members of the Bush administration to do everything possible to get the terminal up and running.

“We wish to express our support for the Shell LNG import facility that is to be located offshore Cameron, LA,” said Paul Cicio, director of the IECA, which represents the nation’s large industrial companies and manufacturers. “This is an excellent proposal and we strongly encourage the administration to do all it can to ensure it receives the approvals needed to expedite its construction and operation as soon as possible.

“The U.S. natural gas crisis is nearing its fifth year, domestic production continues to struggle and there has been insignificant approval of new LNG import facilities needed to deliver relief to consumers,” he said in a letter to Interior Secretary Gale Norton, Energy Secretary Samuel Bodman, Commerce Secretary Carlos M. Gutierrez and Council on Environmental Quality Chairman James Connaughton.

“The U.S. natural gas crisis has already cost consumers nearly $200 billion in higher natural gas prices and has significantly contributed to the loss of 2.5 million manufacturing jobs,” said Cicio. “Consumers of this country are depending upon you to increase the supply and affordability of natural gas. We look forward to hearing from you on this matter.”

The 1 Bcf/d terminal will be located in 55 feet of water 38 miles offshore Louisiana in West Cameron Block 213. The project will include two gravity-based structures, LNG containment facilities, open-rack vaporizers, living quarters, a ship berthing system and pipeline facilities. It will be able to receive 135 LNG ships annually, each with cargoes of between 125,000 and 160,000 cubic meters. Service is expected in late 2008 or early 2009.

Environmentalists have raised questions about the impact of using sea water in the terminal’s open-rack vaporization process. They say it would have a devastating impact on fish populations, particularly Red Drum, an overfished species that currently is under a rebuilding plan. The National Oceanic and Atmospheric Administration’s Fisheries department and the Maritime Administration determined that about 0.1%-3.8% of the annual Red Drum catch in the Gulf could be lost if even one LNG terminal with an open sea water vaporization process is built.

Environmentalists have urged regulators to require LNG companies to reuse contained water (“closed loop” process) for the warming process, but that would cost terminal operators about $20-40 million/year in additional vaporization costs because it would require 1.5% of the cargo to be used for heating. Terminal developers also note that it would result in some air emissions.

Mark Prescott of the Coast Guard Deepwater Ports Standards Division told NGI last week that MARAD and the Coast Guard carefully weighed the impact on the fish population with all of the other factors and determined that it was not significant enough to warrant rejecting the terminal’s application.

However, a separate environmental impact statement (EIS) will have to be done on the construction of the two massive 200-foot by 500-foot cement structures that will form the terminal’s offshore base. Prescott predicted that it would be another year before Shell had a site selected and approved for the formation of the gravity based structure. “It’s going to be five years before this project is operational,” he said.

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