AES Corp. has thrown in the towel on its long-sought Sparrows Point liquefied natural gas (LNG) import project and associated pipeline, after seven years of fighting project opponents. During that period, the North American natural gas market did a complete flip to soon become an LNG exporter.
Arlington, VA-based AES had won FERC approval for the Baltimore County, MD, project, but in a recent filing [CP07-62-000] asked the Commission to vacate the project’s Section 3 authorization and Section 7 certificate, which were granted in December 2009 (see Daily GPI, Dec. 18, 2009; Jan. 16, 2009).
“AES has decided to no longer pursue constructing the LNG terminal and the associated 88-mile natural gas pipeline authorized by the Commission,” the company said. “To date, no construction activities have been undertaken, and thus there are no facilities in service.”
The company did not provide a reason in its filing for canceling the project. AES did not respond by press time to a request for comment.
The project was kept at bay by opponents for years while the shale natural gas revolution crushed domestic gas prices and the economics that would have supported imports to Sparrows Point and other LNG import terminal projects. The United States is now slated to become an LNG exporter (see Daily GPI, Sept. 13).
Preliminary planning for the 1.5 Bcf/d project began in late 2005/early 2006. It was originally projected to cost $400 million (see Daily GPI, Jan. 18, 2006). Maryland officials and environmentalists were opposed to the project and put up a vigorous fight against it.
The Sparrows Point project would have been less than two miles from residential housing, which prompted Baltimore County to pass an ordinance in 2007 banning construction of LNG terminals within five miles of homes. AES challenged the ordinance in federal court (see Daily GPI, Jan. 9, 2007). More recently, in 2009, AES was denied a state water quality certification for the project (see Daily GPI, Dec. 29, 2009).
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