June 25, 2018
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BEP head recommends Calais LNG terminal application be returned

By Rich Hewitt, BDN Staff

CALAIS, Maine — The head of the Maine Board of Environmental Protection has recommended that Calais LNG’s application to build an LNG terminal in the city be returned to the company.

The recommendation came from BEP Chairwoman Susan Lessard in the form of a draft order that the board will consider at its regular meeting Thursday. It cites the company’s loss of “title, right and interest” to a major portion of the proposed site at Red Beach for the proposed $1 billion facility.

“The record shows, and there is no dispute, that after nearly a year, Calais LNG’s applications are not ready for processing for reasons that are unrelated to the board or its application review process,” Lessard said in the draft order. “In fact, the applications are less ready for processing now than when the first time extension was granted in July 2010, Calais LNG having lost title, right or interest and financial capacity in the interim.”

The board learned earlier this year that the company’s option to purchase 250 acres from Steven Carothers and Gail Roberts had expired on Aug. 31. That property is the major portion of the proposed 330-acre project site.

According to documents included in the agenda for the board’s coming meeting, Carothers and Roberts, in a letter dated Nov. 17, informed the board that “as of Sept. 1, Calais LNG Project lost any rights to use or to purchase our property” and “we currently have no new or existing contract with CLNG, nor do we have any obligation to sell our property to them.”

The loss of the option on the land was not the only reason Lessard cited for returning the application. She also cited technical and financial factors.

“The applications also lack information on financial capacity to construct the proposed facility,” she wrote in the order. “Calais LNG has failed to provide this information as well as additional technical information … despite six months of time extensions in which to do so.”

According to previous reports, Calais LNG, citing complex financial negotiations, asked BEP for an extension to Jan. 15, 2011. Calais LNG originally asked for the process to be expedited but has since asked for five time extensions. The BEP originally scheduled a public hearing on the project for July.

Calais LNG informed the Maine Board of Environmental Protection that GS Power Holdings LLC — a subsidiary of the global investment firm Goldman Sachs Group Inc. — was looking to sell its financial interest in the project to a new partner, according to BEP documents. In November, attorneys for Calais LNG notified the board that negotiations with a new partner were proceeding and that once funding was in place, the company would secure title, right and interest to the Carothers property. They requested the Jan. 15 extension.

Messages left seeking comment from Calais LNG officials had not been returned by Sunday evening.

If the board approves the draft order, it will return the application to Calais LNG without prejudice.

The board is scheduled to consider the order during its afternoon session starting at 1 p.m. Thursday.

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