2005 December 23
by Marie Jones Holmes
Quoddy Bay LLC on December 16 filed its pre-application with the Federal Energy Regulatory Commission (FERC) to construct a $500-million liquefied natural gas (LNG) facility at Split Rock, Pleasant Point, and a storage facility in Perry. At a press conference in Augusta on December 20 concerning the filing, Maine State Chamber of Commerce President Dana Connors described the Quoddy Bay LNG project as "not just a local or Washington County project. It is a very important initiative for the state, the region and the entire northeast. It is an opportunity for a reliable, clean supply of natural gas and it will create other economical projects."
Connors stressed that the state chamber is not selecting one LNG project over another, but the meeting provided an opportunity for Quoddy Bay LLC to describe where they are and what the future holds. Two other LNG projects have been proposed, one in Robbinston and one in Calais. Quoddy Bay is the first to submit a pre-application to FERC.
While the Quoddy Bay project could supply a large portion of the basic natural gas needs of New England, Brian Smith, Quoddy Bay LLC project manager, says Perry or Eastport will not be receiving any of the gas unless a distribution company or a local facility is formed to serve the area. Smith said Quoddy Bay LLC is a developer and not a distribution company. Quoddy Bay will, in the construction of the pipeline, build access points that would be accessible to local energy distributors.
The mandatory FERC pre-filing process is the first step of the structured federal permitting schedule during which an applicant presents aspects of an LNG project to all stakeholders, including members of the community as well as state and federal regulators. This process will allow stakeholders to review project details and provide input into the development, prior to Quoddy Bay's filing formal permit applications with local, state and federal governments.
The Quoddy Bay LLC project is made up of four components: a two-berth pier and platform in Passamaquoddy Bay where LNG tankers will unload LNG; the Split Rock support facility, including such infrastructure as a metering station and a power generator; a 40-mile natural gas pipeline connecting with the existing Maritimes & Northeast Pipeline system to transport natural gas throughout Maine and into southern New England; an onshore storage and regasification facility within one mile of Split Rock in Perry, housing three 160,000-cubic-meter storage tanks on an approximately 170-acre parcel. It will also have associated "regas" and "send out" equipment. A short cryogenic transfer line will carry the LNG to the storage facility. The proposed tank facility would be located in between the Old Eastport Road and Cannon Hill Road. Smith would not disclose the name of the property owner, but Quoddy Bay has an option on the land.
In describing the tanks, Smith said, "These tanks are the state of the art and will be the safest in the world." The tanks will hold about 10 billion cubic feet (bcf) of natural gas, or about five days of backup supply at maximum capacity. Smith says, "The design allows for up to 2.0 bcf per day of regasification at either the pier or the storage tanks. If we need to shut down our storage facility for maintenance we can maintain our supply commitments by unloading directly from ships into regasifiers on the pier."
Quoddy Bay LLC outlined the mandated FERC pre-filing process and timeline, as well as specific opportunities for the public and other stakeholders to interact with the process. "The FERC process is very specific about stakeholder interaction," says Smith. "The Quoddy Bay LNG project will involve a lot of input from the public so that we will create the best facility possible for the local communities."
According to a press release issued on behalf of the company, along with 500 jobs during construction, the $500-million project conservatively calls for 70 full-time operational jobs, paying $5 million in annual salaries at the facility alone. Pleasant Point, which will host the import facility, will receive lease payments totaling up to $12 million a year.
Quoddy Bay LLC will host community open houses in late January and early February so its representatives and consultants can inform the public about the details of the facilities. Following these open houses, FERC and other regulatory bodies will hold scoping sessions so that the public and other stakeholders can share their ideas, concerns, and considerations with the company and FERC.
After taking into account the information obtained during scoping sessions, Quoddy Bay LLC will submit drafts of 14 Resource Reports to FERC and other agencies, which the agencies will then comment on before the company submits its formal permit application.
Quoddy Bay LLC expects to submit its formal permit application by September 2006, begin construction in 2007, and begin operation as early as 2009.
Sutherland Weston Marketing Communications of Bangor is now handling public relations matters for Quoddy Bay LLC. They replace the Portland firm of Savvy Inc.
NEPA and Coast Guard reviews
On December 16 Quoddy Bay also requested that FERC initiate a National Environmental Policy Act (NEPA) review. In the request, Quoddy Bay says approximately 180 ships per year are anticipated to call on the terminal.
The Maritimes and Northeast Pipeline system is the proposed receipt point for gas from the project into the interstate pipeline grid. Current plans are for Quoddy Bay to construct, own and operate an approximately 35-mile-long send-out pipeline.
The U.S. Coast Guard received official notification of Quoddy Bay LLC's plans on December 16 via Quoddy Bay's Letter of Intent. The U.S. Coast Guard Sector Northern New England in Portland will assess safety and security issues associated with LNG tankers transiting Passamaquoddy Bay and its approaches to Split Rock in conjunction with the FERC permitting process.
"We plan to work very closely with local officials, our Port Safety Forum, and the Area Maritime Security Committee in evaluating this proposal," says Captain Stephen Garrity, Coast Guard captain of the port, Sector Northern New England. "We will also be looking for comments from the general public in the U.S. and Canada to ensure we have considered the full range of issues associated with moving LNG tankers from the Bay of Fundy to Passamaquoddy Bay."
FERC is responsible for authorizing the siting, construction, and operation of onshore LNG facilities. Once FERC receives an application for an LNG facility, it is required to complete an Environmental Impact Statement (EIS), evaluating issues ranging from air quality and biological impacts, to cultural and socioeconomic impacts, to safety and security impacts. The Coast Guard will serve as a cooperating agency for FERC's EIS, in accordance with provisions of NEPA. When completed, the Coast Guard may adopt pertinent portions of the EIS in order to satisfy its NEPA obligation relating to issuance of the Letter of Recommendation and other connected Coast Guard actions.
Quoddy Bay LLC will provide the Coast Guard with a safety and security assessment that identifies any navigational safety hazards as well as potential security threats, along with recommended mitigation measures and the resources (federal, state, local and private sector) that will be needed to provide an acceptable level of safety and security for the proposed LNG operations. This assessment will be submitted to the Coast Guard so that it can be reviewed and validated by stakeholders at the port and the Area Maritime Security Committee. Based on this assessment, the Coast Guard captain of the port will evaluate the suitability of the waterway for LNG marine traffic and provide his findings to FERC for inclusion in its EIS. Through the cooperative efforts of FERC, key stakeholders, and state and local officials, the Coast Guard is confident that an accurate and objective assessment will be undertaken for the safety, security, and protection of the marine environment, according to a press release.