A second West Coast liquefied natural gas (LNG) project has moved forward this week. Privately held Crystal Energy LLC of Houston announced Wednesday that it has signed a preliminary agreement for Alaskan LNG supplies and will be filing an application with U.S. Coast Guard to transform an existing offshore oil platform along the Southern California coast into an LNG receiving terminal.
Crystal has a memorandum of understanding with the Alaska Gasline Port Authority (APGA) to negotiate what it called a “detailed letter of intent” for LNG supplies that would be unloaded at Crystal’s proposed $300 million “Clearwater Port Project,” located 11 miles offshore Ventura County about 60 miles northwest of Los Angeles. The deal eventually could involve the equivalent of 800 MMcf/d over a 20-year period, a Crystal announcement said.
A new underwater natural gas pipeline would be built to transfer the LNG in gaseous form to onshore markets using an existing pipeline right of way. The Coast Guard would be the lead federal agency for the offshore terminal, and the California Lands Commission would be the lead state permitting authority.
Another offshore proposal in the preliminary stages calls for an entirely new facility about 35 miles offshore the Oxnard area in Ventura County by an Australian resources company with expertise in building offshore energy facilities. A third California project — and the farthest along — is proposed in Long Beach Harbor onshore, and its backer, Japan’s Mitsubishi Corp., filed its application with the Federal Energy Regulatory Commission on Monday.
Crystal’s proposal intends to transform “Platform Grace,” to receive the LNG, re-gasify it and ship it into Southern California Gas Co.’s transmission system onshore.
“Though the [Alaska LNG supply] project is still in the development phase, we are confident their project will go forward, and are working toward a definitive agreement with them,” said William O. Perkins III, Crystal Energy’s president.
Marathon Oil for decades has exported the equivalent of 400 MMcf/d of Alaskan LNG off the Kenai Peninsula, and it has a major proposed LNG receiving terminal planned for the Pacific Coast of North Baja in Mexico that could get at least part of its supplies from Alaska.
“[A more definitive] agreement would constitute a significant way to meet long-term domestic demand on the West Coast with secure, stable domestic reserves, and would also serve the best interests of the residents of both California and Alaska by reducing our reliance on foreign sources of energy,” said Bert Cottle, chairman of AGPA, which is proposing to build a second LNG liquefaction facility on the Kenai Peninsula in the Port of Valdez. ConocoPhillips owns 70% and Marathon owns 30% of the existing terminal.
Claiming its proposed project will “meet the highest standards” of safety and environmental protection, Crystal’s Perkins said an existing offshore rig was identified as a means of protecting coastal land, avoiding new visual impacts and maintaining “normal” port operations.
“We look forward to a rigorous environmental review of our application by federal, state and local agencies, and believe our proposal will be validated,” Perkins said. He said Crystal Energy plans to submit its Clearwater Port project application for review within the next two weeks.
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