June 28, 2007

Jennifer Cayer
Maine Department of Environmental Protection
Bureau of Land and Water Quality Control
106 Hogan Road
Bangor, Maine 04401

Subject: Downeast LNG Import Project, Mill Cove, Robbinston, ME
NRPA Tier 3 Application #L-23432-TG-B-N

Dear Ms. Cayer:

The Department of Conservation, Bureau of Parks and Lands has reviewed the above referenced proposal to develop an LNG import terminal / storage facility and send-out pipeline at Mill Cove on Passamaquoddy Bay in Robbinston.

It is our understanding that the terminal portion of the proposal includes construction of a 37 ft. wide by 3,862 ft. long pile supported trestle (pier) with a single LNG carrier berth at the outer terminus of the pier. LNG would be offloaded and moved to storage tanks onshore via piping along the pier. The applicant estimates that LNG carriers would arrive at the pier every 5-7 days during the winter and every 8-10 days in the summer. Offloading is expected to take 24 hours.

The pier and berth area are proposed to be located on public submerged lands below the mean low water of Passamaquoddy Bay. Private use of these public lands requires a submerged land lease from the Bureau of Parks and Lands and is necessary for the applicant to demonstrate sufficient right, title, or interest in the project site to secure the necessary local, state and federal approvals prior to construction. The Bureau, at its discretion, may grant the applicant a lease option for up to 2 years for the purpose of securing the necessary environmental and regulatory permits prior to issuance of a lease.

In considering whether to grant a submerged lands lease, the Bureau must consider the potential impacts the proposal may have on customary or traditional public access and public trust rights in, on, or over public submerged lands and the waters above those lands. These include, but are not limited to potential impacts to navigation, fishing, other commercial and recreational marine uses and facilities serving those uses, and access for other riparian owners. If the Bureau finds that the proposal will result in a loss, the Bureau may deny the proposal or require appropriate mitigation measures to compensate the public.

Based on our review of the application materials provided in the NRPA application submitted to your Department, we anticipate that the following issues will be of particular concern in our leasing decision:

BPL, Submerged Lands Program Comments, Page 2.

Site Selection: Under the Bureau’s Rules, where a project is proposed to extend more than 1000 feet from shore, the applicant needs to demonstrate that that there is no reasonably available alternative location which would reduce the area of submerged lands occupied. We note that the other sites considered by the applicant in Passamaquoddy Bay had significantly shorter distances to reach adequate depth to berth LNG carriers. Based on the selection process described in the application, it is unclear to what extent consideration was given to minimizing the use of public submerged lands in the selection process.

Pier length: The proposed 3,862 foot pier with associated LNG carrier berthing extends one third of the distance across the bay at the proposed location and more than two thirds of the distance to the Maine border with New Brunswick. The facility, LNG carrier berthing, and anticipated security and safety zones may significantly impact other marine uses particularly smaller watercraft and fisheries that need to utilize the near-shore area. The Bureau will be seeking comments from the public and local communities regarding the extent of current marine uses and the potential impacts from the proposal on those uses.

Waterway Suitability: Commercial fishing and other marine uses on the bay may be affected by the timing of LNG carriers and other escort vessels transiting the bay due to conditions of tide and weather. In addition, these uses may be significantly displaced as a result of safety and security zones established at both the terminal site and around the LNG carriers while in transit to and from the terminal. These impacts may be compounded by the development of the proposed Quoddy Bay LNG facility at Pleasant Point. We anticipate that the findings and recommendations of the Waterway Suitability Report being prepared by the U. S. Coast Guard will be an important consideration in the Bureau’s review of this proposal.

Finally, the issuance of a submerged lands lease is contingent, in part, on compliance with all requirements imposed by state, federal, and municipal agencies with jurisdiction over the proposed project.

I hope the above comments are helpful. If you have any questions or wish to discuss any of the above in greater detail, please contact me at 287-4919.



Dan Prichard
Submerged Lands Program
Bureau of Parks and Lands

Cc: Uldis Vanags — Maine State Planning Office
       Shannon Dunn — Federal Energy Regulatory Commission (FERC)
       Robert Wyatt — Downeast LNG, Inc.
       Brian Swan — Maine Dept. of Marine Resources
       Gino Giumarro — Woodlot Alternatives, Inc.
       Ron Shems — Shems, Dunkiel, Kassel & Saunders
PHONE: (207) 287-3821
FAX: (207) 287-6170
TTY: (207) 287-2213