FERC approves three new LNG terminals and two expansions -- The Quoddy Tides, Eastport, Maine

The Federal Energy Regulatory Commission (FERC) on June 15 approved applications for the construction and operation of three new LNG import terminals and related facilities and the expansion of two present facilities. The new facilities are Creole Trail LNG and Creole Trail Pipeline; Port Arthur LNG and Port Arthur Pipeline; and Crown Landing LNG project.

Creole Trail LNG and Creole Trail Pipeline is authorized to site, construct and operate a new LNG import terminal in Cameron Parish, Louisiana. The terminal would include four LNG storage tanks that would have the capability to store up to 640,000 cubic meters of natural gas and have a send-out capability of an average of 3.3 bcf per day.

The commission granted Sempra's Port Arthur LNG authority to site, construct and operate a new terminal and related facilities near Port Arthur, Texas. The facilities include six LNG storage tanks with a nominal capacity of 160,000 cubic meters each. The project would be constructed in two phases and would ultimately provide an average of 3 bcf per day to existing interstate pipeline systems in Texas and Louisiana, connecting to markets in the Midwest and Northeast.

Also authorized for construction was the Crown Landing LNG project. Crown Landing is a wholly-owned subsidiary of BP American Production Company and proposes to construct and operate a new onshore LNG import terminal in Logan Township, New Jersey. The proposed terminal would store up to 450,000 cubic meters of LNG equivalent to 9.2 bcf of gas, vaporize LNG and send it out through a connecting pipeline at a baseload rate of 1.2 bcf per day. The project would interconnect with a new 11-mile pipeline that the commission also approved on June 15.

The commission also authorized expansions at two previously authorized LNG facilities, Sabine Pass LNG and Dominion Cove Point LNG.

Sabine Pass was authorized in December 2004 to be constructed and operated in Cameron Parish, Louisiana. In its June 15 decision, the commission also approved phase II of the project, which includes three additional 160,000-cubic-meter storage tanks and related facilities.

The commission approved the expansion of Dominion Cove Point LNG located in Calvert County, Maryland, and a pipeline known as Cove Point pipeline that extends approximately 99 miles from the LNG terminal to connections with several interstate pipelines in Loudoun and Fairfax counties, Virginia. The commission authorized the company to expand its LNG terminal facilities by adding two new storage tanks, each capable of storing 160,000 cubic meters of LNG. Cove Point was also granted authority to refurbish and reactivate two existing waste heat vaporizers to provide for an additional 0.25 bcf per day of firm send-out capacity to ensure that Cove Point can deliver up to its current peak-day capability of 1 bcf per day of send-out capacity on a year-round basis.

In February 2005, at a LNG Community Awareness Workshop, Hal Chappelle of the National Petroleum Council (NPC) said a study by NPC in 2003 estimated that seven to nine new LNG import terminals are needed in the U.S., Canada and Mexico. He noted that the vast majority of global natural gas reserves are located outside of North America. Canadian and U.S. well productivity from transitional basins is declining. Natural gas usage is growing in all parts of the world.

The NPC is a privately funded advisory committee established in 1946 whose function is solely to represent the views of the oil and natural gas industry in advising informing and making recommendations to the U.S. Secretary of Energy in respect to any matters relating to oil and natural gas.