Bangor Natural Gas parent buys rights to Searsport-to-Loring pipeline

Posted July 03, 2012, at 11:59 a.m.

LIMESTONE, Maine — The right to use a 200-mile-long pipeline that extends from the Mack Point port facility in Searsport to the former Loring Air Force Base in Limestone soon may be transferred to Gas Natural Inc., the parent company of Bangor Natural Gas.

The pipeline and the real estate right of way corridor through which it passes had been leased by Loring BioEnergy, but that company failed to make its lease payments to its mortgage holder, United States Power Fund, according to Jacob Manheimer, an attorney for Loring BioEnergy. Loring had pledged the lease as collateral for its loan from United States Power Fund, and when it failed to make the payments the company foreclosed on the lease.

The corridor right of way easements are owned by Loring Development Authority, a non-profit group formed after the base closed in the early 1990s.

On June 4, a public auction was held for the lease. Gas Natural Inc. was the lone bidder, offering $4.5 million for the lease, which provides access to the pipeline and associated equipment.

Gas Natural Inc. owns several natural gas utilities, including Bangor Natural Gas. Jerry Livengood of Bangor Natural Gas said the Ohio-based parent company will reveal its plans for the pipeline in about a month.

Though the company made a formal bid, a negotiation process typically follows in such foreclosures, he said.

“We’ve had a dialogue” with the owner, Livengood said Monday, but the lease has not formally been transferred.

The pipeline was built by the Department of Defense in the early 1950s at the height of the Cold War to supply jet aircraft with fuel. The jet fuel was taken by ship to the port facility at Mack Point in Searsport, then pumped through the 6-inch-diameter pipe north to the base.

Loring BioEnergy, the leaseholder in default, wanted to build a co-generation power facility, producing electricity and steam or heat that could be used by a food or wood processor. The company planned to have its power plant, to be located at the former base, supplied by natural gas pumped through the pipeline.

The pipeline was decommissioned in 1994 and filled with nitrogen to inhibit corrosion.

Such established corridors are considered valuable because the cost of developing new ones is so prohibitive. Whether for a road or a power line, securing rights of way over private property would have to come through negotiations with countless owners or through eminent domain seizures that could be challenged, dragging out the process.

Corridors such as the one that holds the Searsport to Limestone pipeline could be used for electric transmission lines, natural gas pipes, data lines or even a railroad.

 

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