Following the substantial roadblock imposed by Louisiana Gov. Kathleen Blanco in May on the company’s Main Pass Energy Hub (MPEH) proposed offshore liquefied natural gas project, McMoRan Exploration Co. said Monday that its application — using the suggested closed loop vaporization technology over its original plan of implementing open rack vaporization (ORV) technology — continues to move forward.

The New Orleans-based company said Monday that it has received correspondence from the U.S. Coast Guard regarding the remaining steps to be completed to obtain a Deepwater Port License for the project. McMoRan said the information confirms the company’s expectation that the work completed to date will enable an expeditious processing of its license application. McMoRan submitted an amendment to its license application with the U.S. Coast Guard (Coast Guard) and the Maritime Administration (MARAD) on May 31 to obtain approval of its Main Pass Energy Hub project using closed loop technology.

The closed loop vaporization design is more expensive, but some consider the design to be less environmentally intrusive than ORV. In her May 5 veto of the project (see Daily GPI, May 9), Blanco said “insufficient evidence” existed to approve McMoRan’s application for an ORV system. She added that the McMoRan’s application was only one of many pending LNG projects, adding that “We must avoid the harm presented by the cumulative impact of multiple offshore LNG facilities.” Blanco stated that until additional data are collected and evaluated, Louisiana will require the use of a closed loop regasification system, which uses natural gas rather than seawater to warm the LNG.

The siting of offshore LNG facilities was dealt another blow in June after ConocoPhillips withdrew its application for the 1 Bcf/d Compass Port LNG terminal upon being notified by Alabama Gov. Bob Riley that he intended to veto the application for the offshore Alabama LNG deepwater port (see Daily GPI, June 12).

On July 21, the Coast Guard advised McMoRan that the information provided in the amendment along with information previously provided contain sufficient information to continue processing of the license application to incorporate closed loop technology. The Coast Guard also advised that they will prepare an Environmental Assessment (EA) to evaluate the application amendment. The EA will focus on the changes associated with the vaporization technology which was fully evaluated as a reasonable alternative in the Final Environmental Impact Statement published in March 2006.

Following publication of the EA, the Coast Guard will conduct final public hearings in the adjacent coastal states, followed by a 45-day period to allow public comment and response by the governors in the adjacent coastal states (Louisiana, Mississippi and Alabama). After the 45-day comment period, MARAD has up to 45 days to issue a Record of Decision. McMoRan said it expects the EA would be published in late September 2006 with a record of decision by the end of 2006.

The MPEH terminal would be capable of regasifying LNG at a rate of 1 Bcf/d. “The use of existing facilities provides significant cost advantages, and the proposed project benefits from its offshore location near established shipping lanes,” the company said. “McMoRan is continuing discussions with potential LNG suppliers as well as gas marketers and consumers in the United States to develop commercial arrangements for the facilities.”

The company has said that it is also considering investments to develop “substantial” cavern storage for a pipeline header system that would allow deliveries into U.S. gas markets. Current plans for the MPEH include 28 Bcf of initial cavern storage capacity and aggregate peak deliverability from the proposed terminal, including deliveries from storage of up to 2.5 Bcf/d. McMoRan has already received approval from the Federal Energy Regulatory Commission to bring gas onshore using its proposed 36-inch pipeline into Coden, AL.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.