Downeast LNG proposes expanded project, submits request to energy regulators

By Tim Cox, BDN Staff
Posted July 23, 2014, at 5:24 p.m.

ROBBINSTON, Maine — Downeast LNG has submitted a pre-filing request to the Federal Energy Regulatory Commission to develop its proposed liquefied natural gas import-export facility, the company announced Wednesday.

The request is for a facility with significantly more capacity than the company proposed in June, an expansion that also increases the cost of the project substantially.

The prefiling to the commission is for a facility with annual capacity of 3 million tons, which will cost an estimated $2 billion to develop. The company last month proposed a project that would have an annual capacity of 2 million tons and cost $1.3 billion to build.

The larger project likely will mean more construction jobs as the facility is built, but it will not affect the number of employees required to operate, Downeast LNG president Dean Girdis said Wednesday.

The proposed project was expanded because of market interest, according to Girdis.

The prefiling request was submitted to the commission on Tuesday, moving the project forward, he said.

Downeast LNG has been trying to develop a liquefied natural gas import terminal in Robbinston since 2005, but in June it announced it was shifting gears because of changing market conditions and proposed a bi-directional facility that would handle both the import and export of natural gas. The facility will be able to liquefy natural gas for export as LNG and regasify imported LNG, as the market requires, operating similarly to about 40 other LNG storage facilities in the New England region.

“This is an important step in our plans to have an LNG facility in Downeast, Maine,” said Girdis in a news release issued by the company on Wednesday. “Once the bi-directional facility is online, it 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,”

The company plans to submit its formal application to FERC in January 2015, Girdis said; it has six months from the prefiling to submit a full application.

The company will be submitting related environmental reports and engineering reports to the commission over the next six months, said Girdis.

Construction is expected to begin in 2016. The company hopes to begin production in 2019-20.

“Downeast LNG’s ‘new’ project has the same fatal problems as their first attempt,” said Robert Godfrey of Eastport, a spokesman for Save Passamaquoddy Bay, which has opposed the company’s plans.

All three Passamaquoddy Tribe governments have opposed the Downeast LNG project, noted Godfrey. Among other things, the proposed location is a “significant Passmaquoddy religious and cultural site.”

“Passamaquoddy Bay is inherently inappropriate for LNG transits and terminals,” said Godfrey. He listed other objections to the proposal, including Canada’s ban on LNG transits into Passamaquoddy Bay and the defacing of a state-designated scenic area.

According to Girdis, Downeast LNG will offer access to Canadian and U.S. gas reserves, with gas committed under a fixed price contract or floating index.

The company has raised money from investors for permitting the project, said Girdis. “Once we secure permits and LNG buyers, we can begin to raise the required construction financing,” he added.

The project as originally proposed in 2005 received a final environmental impact statement from the commission in May. That original plan called for an LNG import terminal that would provide about 500 million cubic feet per day of imported natural gas to the New England region. That facility would have consisted 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.

The newest proposal for a facility to both import and export LNG will require modifications to the current site plan, but much of the facility will be the same, according to Girdis.

The facility would be comprised of an LNG storage tank, pier, regasification equipment and natural gas pipeline as currently proposed, adding liquefaction capacity to the current design.

Downeast LNG also plans to submit its Free Trade Agreement and non-FTA export requests to the Department of Energy.

When the company announced its change of plans in June, Girdis said it would need to go through the federal permitting process anew, a process he estimated would take 18 months. Approval of the company’s original plan has taken years, but Girdis attributed the delay to safety modeling issues that were not related specifically to the Downeast LNG proposal.

The FERC review essentially will pertain to the changes in the proposed project, noted Rob Wyatt, director of permitting for Downeast LNG. “So we should be substantially expedited because that will be a limited amount of information,” he said Wednesday. The company may begin the process of obtaining the necessary state permits as early as August or September, said Wyatt.

http://bangordailynews.com/2014/07/23/business/downeast-lng-proposes-expanded-project-submits-request-to-energy-regulators/ printed on December 27, 2014