Downeast LNG shifts plans, proposes import-export facility

Posted June 25, 2014, at 7:06 p.m.

ROBBINSTON, Maine — Downeast LNG has been trying to develop a liquefied natural gas import terminal in Robbinston since 2005, but now they are proposing a bi-directional facility that would handle both the import and export of natural gas.

“The market has changed a great deal,” company president Dean Girdis acknowledged Wednesday, referring to increased production of natural gas in the U.S. and Canada. The economics of importing LNG is “not what it was” when the company first proposed its import terminal, he said.

Under the company’s new plan, the facility would be able to liquefy 2 million tons of natural gas per year or regasify 100 million cubic feet of LNG per day as market conditions warrant. It could process foreign gas for domestic consumption or vice versa.

It would operate similar to about 40 other LNG storage facilities in New England, according to Girdis.

“Having a bi-directional facility will give us the ability to respond to market conditions and customer needs while increasing the supply of natural gas in the state, whether we are importing or exporting, ” Girdis said in a recent announcement the company issued.

Originally, Downeast LNG proposed a liquefied natural gas import terminal that would provide about 500 million cubic feet per day of imported natural gas to the New England region. The proposed facility would consist of two storage tanks, a regasification plant, a pier to receive LNG carriers and a natural gas pipeline to connect the facility to the existing Maritimes and Northeast Pipeline, which runs from Nova Scotia through Maine.

Given the long time of the permitting process, “it’s best to maintain flexibility in our plan,” Girdis said Wednesday.

The terminal and pipeline aspects of the original project would be retained, but one tank would be eliminated and liquefaction equipment would be added.

The company will need to go through the federal permitting process anew, which Girdis estimated would take 18 months — “I could be wrong,” he added. The approval process for the company’s original plan has taken years, but Girdis said one reason for the delay was attributed to issues relating to safety modeling that were not related specifically to the Downeast LNG proposal.

The reconfigured project would cost an estimated $1.3 to $1.4 billion to construct.

As first proposed, the import terminal would employ about 50-60 people, according to Girdis. The revised project would employ about 120-150, he said.

The company will offer LNG buyers an opportunity to access Canadian and U.S. gas reserves, with gas committed under a fixed price contract.

The company plans to begin the federal approval process with the Department of Energy and the Federal Regulatory Commission within a month. It hopes to begin construction in 2016, a process that would take three years.

Girdis said he briefed officials with the Maine Department of Economic and Community Development about the proposal in recent weeks.

“Maine people have a lot to gain from a successful LNG project in Washington County,” George Gervais, commissioner of DECD, said Wednesday. “This project would help create new jobs and generate private investment Down East. There also exists the potential for lower energy costs for Mainers.”

Downeast LNG also released an updated economic impact study by University of Maine professor Todd Gabe. During the construction period, the project would generate an estimated 2,350 full- and part-time jobs, including 1,100 construction jobs, according to the study. Once operating, the facility, including multiplier effects, would account for 207 full- and part-time jobs and $46.4 million in output.

Robert Godfrey of Eastport, a spokesman for Save Passamaquoddy Bay and a leading critic of Downeast LNG’s plans, was undeterred by the turn of events.

“It doesn’t change much, other than they want to spend twice the amount of money,” Godfrey said. The new proposal presents the “same problems with Canada and the (Passamaquoddy) Tribe they currently have,” he added.

“It still doesn’t make any sense,” Godfrey said. “It’s still an inappropriate location.”

Canada has said it will not allow tanker ships to transit the waters in the region to access the proposed terminal, Godfrey noted. Despite remarks by Girdis to the contrary, LNG tankers do not have the right to make the transit, he said.

“It’s nothing but bluster. They can make that pretension, and some people will believe it, but the fact is they don’t have the right to go through there,” Godfrey said.

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