PORTLAND, Maine — The developer of a natural gas import and export terminal in Robbinston has decided to put its project up for sale.
George Petrides, chairman of the board for Downeast LNG, said in a news release that the company decided that another industrial firm or infrastructure investor would be better suited to take on the project, which it has been developing amid a rapid and continuing drop in global oil and liquefied natural gas pricing.
The company said it plans to put the project up for sale as of July 1, 2016.
The company’s majority shareholder is the New York City-based Yorktown Partners, which says it has about $7 billion in energy investments under management.
Opponents of the Downeast LNG project cheered the decision, saying the choice to sell points to its challenges and deficiencies.
“Downeast LNG has finally recognized that they are not qualified to carry out the project,” said Robert Godfrey, webmaster and researcher for the group Save Passamaquoddy Bay. “They were never qualified to carry it out. The project has been beleaguered by numerous insurmountable obstacles that they should have anticipated.”
Godfrey said those obstacles include requirements for the project to obtain approvals in Canada and from the Passamaquoddy Tribe in order to bring ships in and out of the bay.
The $2 billion project would include facilities to liquefy up to 460 million cubic feet per day for export or convert up to 100 million cubic feet per day back into gas for import. It would also have a storage tank, a pier for transporting LNG to and from ships and a 30-mile pipeline from Robbinston to Baring, to connect with the Maritimes and Northeast Pipeline.
Petrides said the company sees that although global pricing for LNG has been low in recent years, pending expansions feeding the Maritimes and Northeast line increase the ability to send gas from the Marcellus Shale east to Robbinston and then abroad.
He also noted that another export project in Louisiana, backed by Venture Global LNG, has raised more than $265 million.
The company in March received approval from the Federal Energy Regulatory Commission to export gas to countries included or potentially included in free trade agreements with the United States.
Last summer, Downeast LNG hired an engineering firm to work on designs for the project and has put the project forward for various permits before federal energy regulators.
Others have seen that opportunity to export from the Maritimes and Northeast pipeline as well.
A subsidiary of the Australian company Liquified Natural Gas Ltd. last year announced plans to export Marcellus and Canadian shale gas from a site near Port Hawkesbury, Nova Scotia. It asked and in February received approval from FERC to export gas originating in the United States to countries not included in free trade agreements with the United States.
The company, Bear Head LNG, also plans to connect to the Maritimes and Northeast pipeline and said that delays in exporting gas west from western and central Canada have created an opportunity to move that gas east.
The technology to harvest those U.S. and Canadian sources of natural gas has upended global markets for the fuel and from 10 years ago entirely reversed plans like Downeast LNG’s original proposal for an import-only terminal in Robbinston.
In regulatory filings, Bear Head said it intends to export more than 2.5 times the annual amount of gas as the Downeast LNG project. Downeast has proposed exporting about 3.3 million metric tons per year, compared with 8 million metric tons per year proposed by the Bear Head project.