June 21, 2018
Business Latest News | Poll Questions | Border Patrol | Pride | Maple Syrup

Potential Calais natural gas developer given extension to find new financial backers

By Kevin Miller, BDN Staff

AUGUSTA, Maine — State regulators granted the would-be developer of a liquefied natural gas facility in Calais an additional month to find new financial partners for a project estimated to cost up to $1 billion.

Calais LNG originally had told the Maine Board of Environmental Protection that it would withdraw its application by Aug. 11 if the company could not line up a new investor to replace a Goldman Sachs affiliate that was opting out of the project.

But the company requested an additional one-month extension earlier this week, citing delays in the negotiating process.

On Thursday, BEP Chairwoman Sue Lessard agreed to give the company another month to work out the details, adding that Maine’s regulatory standards do not require Calais LNG to withdraw its application due to a “lack of financial capacity.”

This is the third time in roughly a month that Calais LNG has sought and received an extension or postponement from the BEP.

Art Gelber, project manager with Calais LNG, said a possible deal is in the works, although he declined to give specifics.

“Our efforts are going well,” Gelber said Thursday. “We are finding interested parties.”

Calais LNG hopes to build a liquefied natural gas facility on a 330-acre site south of Calais. It lies along the St. Croix River in an area of Passamaquoddy Bay that has emerged as a hot spot for U.S.-based LNG developers.

Two other companies previously have sought state and federal permits for terminals in the area, although Calais LNG’s application is the only one still pending with state regulators.

Supporters view the projects as a way to create jobs and grow economically in rural Down East Maine while helping supply the state and New England with an energy source that is both cheaper and cleaner-burning than oil.

But the projects have attracted vocal opposition from Canadian officials and some residents on both sides of the border who contend Passamaquoddy Bay’s strong tides, historic fishing industry and environmental sensitivity make it an inappropriate spot for LNG operations.

Organizations that oppose the project had urged Lessard to reject Calais LNG’s extension request and instead insist the company withdraw the application for lack of a financial backer.

They also said the company’s repeated postponements have created a hardship for intervening parties, some of which are staffed largely by volunteers.

Last month, Calais LNG successfully petitioned the board to scrap a week of public hearings on the matter only days before they were slated to begin.

“It is prejudicial to keep parties and witnesses dangling,” wrote Ronald Shems, an attorney for Save Passamaquoddy Bay 3-Nation Alliance, which has led opposition to all three LNG proposals. “Calais LNG’s last-minute requests have had impacts on hundreds of people and severely impeded citizen participation in this proc-ess.”

In her letter to Calais LNG on Thursday, Lessard acknowledged those frustrations but said the company does not need to have all its financial arrangements in line at this point in the process. She therefore agreed to put the application on hold for an unspecified period of time.

“Because the application has been put on hold, at some point the information in the applications may become outdated and withdrawal may be appropriate,” Lessard stated.

Calais LNG had highlighted Goldman Sachs’ financial support as a sign of the project’s strength. Gelber claimed he was not aware why Goldman Sachs subsidiary GS Power Holdings LLC had decided to sell off its interest in the project.

“It’s unfortunate this happened right at the last minute,” Gelber said. “It made it very difficult for us.”

The project’s critics have said changing conditions in the energy market, specifically regarding LNG, make the Maine project unfeasible.

“We cannot imagine that after a world-class investment bank like Goldman Sachs, via its wholly-owned subsidiary GS Power Holdings, has backed out of financing Calais LNG that any other credible investor would consider risking money on such an ill-prepared, ill-sited and ill-timed project,” Robert Godfrey with Save Passamaquoddy Bay said in a statement Thursday.

But Gelber said his company’s proposed terminal remains viable.

“The market needs this at this time, and we are getting interest” from potential investors, Gelber said.

Have feedback? Want to know more? Send us ideas for follow-up stories.

You may also like