KeySpan on Friday filed its proposal with FERC to upgrade the existing liquefied natural gas (LNG) storage terminal in Providence, RI. If approved, KeySpan expects shipping to begin in late 2005.

KeySpan, which purchased the facility from Duke Energy in December 2002, announced an agreement last October with BG LNG Services to upgrade the facility and turn it into an LNG import terminal (see Daily GPI, Oct. 24, 2003). KeySpan estimated the upgrade will cost $50 million.

The filing with the Federal Energy Regulatory Commission is the first formal step in the review process, which would culminate approval of the storage facility. It has been located at Fields Point, RI since 1974, and it now holds 600,000 bbl of LNG. The facility currently receives its supply by highway transport, but with approval, the proposed modifications will allow marine deliveries without expanding the size of the current facility.

“Our project will require little or no dredging of the Providence River beyond what is currently underway by the Army Corps of Engineers,” said CEO Robert B. Catell, who referred to environmental concerns. “The dock construction will occur via barge to minimize disturbance to soils and marine life at the site and LNG tankers will not discharge ballast waters.”

Catell said that once it is operational, “regional natural gas price volatility should be eased and most importantly, the entire region will benefit from increased access to clean-burning natural gas.”

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