FERC has issued a favorable preliminary determination (PD) on non environmental grounds for Tractebel’s proposed $132 million Calypso gas pipeline, which would bring regasified LNG to Florida’s East Coast from a proposed import terminal in the Bahamas (see NGI, July 30, 2001).
The pipeline, which was purchased by Tractebel last year from a subsidiary of Enron Global LNG, would include 36 miles of 24-inch diameter offshore pipeline and 5.8 miles of 24-inch onshore pipe. It would transport up to 832,000 MMBtu/d of gas to a connection with Florida Gas Transmission (FGT) in central Broward County from a connection with a nonjurisdictional line boundary of the U.S. Exclusive Economic Zone (EEZ) that would extend to the import terminal in Freeport, Grand Bahama. The project originally had an in-service date of Oct. 1, 2004, but that was based upon the expectation of a final FERC certificate in 2002.
Tractebel, a subsidiary of the French water and energy company Suez and the owner of the Cabot LNG import terminal in Everett, MA, faces stiff competition from two other projects, one proposed by El Paso Corp. and another proposed by AES Corp. (see NGI, Sept. 30, 2002; March 11, 2002). The AES project received a PD from FERC last month (see NGI, April 14).
El Paso’s $226 million, 162-mile pipeline would have the capacity to deliver up to 700 MMcf/d to its pipeline affiliate, FGT, on the coast. The Seafarer Pipeline would include an 88-mile international line from an LNG terminal at South Riding Point on Grand Bahama to the boundary of the EEZ and a 37-mile FERC-regulated pipeline to the Port of Palm Beach and to interconnection with FGT (see NGI, May 27).
In comparison, AES Corp. would build an LNG terminal on a 90-acre island it bought in the Bahamas and the Ocean Express Pipeline would transport the regasified LNG to Fort Lauderdale in southern Florida, where it would interconnect with FGT. The majority of the proposed 800,000 MMBtu/d pipeline — an estimated 68 miles — would be under water and 41 miles of the line would be located in U.S. waters and would be under FERC jurisdiction, while the remainder would be regulated by the Bahamas.
In addition to receiving its PD first, AES also has a head start on negotiations with the Navy over the proposed route of its pipeline (and Calypso’s) through a submarine warfare testing zone and an inert minefield (see NGI, April 8, 2002. AES agreed to reroute three miles of its pipeline and change the pipe material to stainless steel from carbon steel to avoid interfering with the Navy’s magnetic and acoustical testing. Calypso also has to deal with those issues. However, Tractebel already has had experience ironing out security concerns in Boston over its LNG terminal.
Each of the companies obviously believes there’s an adequate market in Florida for more than one LNG project. The Florida market is expected to add 2 Bcf/d of incremental demand by 2010, which potentially could support two LNG projects with staggered in-service dates. The LNG projects also could serve other U.S. markets by backhauling up the pipeline grid.
All three projects, however, face stiff environmental concerns, including scrutiny from state and county environmental regulators over potential effects on the sensitive coral reefs off Broward County. Heavy construction work, with pipes being dragged along the ocean floor, could endanger delicate networks of coral and sponges that draw hordes of divers and tourists to Florida’s waters.
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