Atlantic Sea Island Group LLC Wednesday sued to stay a November decision by the U.S. Maritime Administration (MARAD) granting New Jersey “adjacent coastal state” designation in the federal review of Safe Harbor Energy, a proposed liquefied natural gas (LNG) terminal.

The suit was filed in U.S. District Court for the District of Columbia. If the MARAD decision is allowed to stand, it would give New Jersey veto power over the construction of the facility, which would serve the New York metropolitan region.

Attorneys for Atlantic Sea Island said they believe MARAD did not have the authority to make the designation and did not apply the standards that Congress required when it created the “adjacent coastal state” statute in 1974.

“The agency relied on a one and one-quarter page letter from the National Oceanic and Atmospheric Administration (NOAA). In contrast, the Atlantic Sea Island permit application extends to some 5,000 pages,” Atlantic Sea Island said. “Furthermore, despite four Freedom of Information Act requests, the government has refused to disclose the NOAA letter to the company.”

The terminal is proposed for a 60.5-acre man-made island 23 miles from New York Harbor, 19 miles from New Jersey and 13.5 miles south of Long Beach, Long Island. Safe Harbor is designed to bring LNG to the New York metro region and the northeastern United States and have the capacity to deliver up to 2 Bcf/d to 65 million consumers. The terminal would store LNG in four on-site tanks before regasification and transmission.

“This is about adherence to the rule of law and the intent of Congress,” said Atlantic Sea Island Chairman Howard Bovers. “This is about fairness, merit and the judicial review of a process that appears to have run afoul of special interests. This is about an application that seeks to follow the spirit and letter of the law and is being punished for having done so.”

Safe Harbor is in direct competition with the Broadwater LNG project proposed by TransCanada and Shell on the north side of Long Island in the protected waters of Long Island Sound about nine miles from the closest New York shoreline and 11 miles from the closest Connecticut shoreline. Safe Harbor’s U.S. Coast Guard application was deemed complete last summer (see Daily GPI, Aug. 20, 2007). Broadwater received a favorable environmental review from the Federal Energy Regulatory Commission in January (see Daily GPI, Jan. 14). Broadwater has been strongly opposed by the state of Connecticut (see Daily GPI, April 25, 2007).

Both Broadwater and Safe Harbor would serve New York regional markets. Broadwater would be connected to the Iroquois Gas Transmission System, while Safe Harbor presumably would be connected to Transcontinental Gas Pipeline.

Atlantic Sea Island is a consortium of private investors.

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