Louisiana LNG terminal on hold, Mississippi backers confident

ChevronTexaco Inc has announced its Port Pelican LNG gas terminal project in Louisiana has been put on hold until the energy giant can secure long-term contracts for the facility while at the same time, rival importer Gulf LNG Energy is confident its proposed LNG terminal at Bayou Casotte in Mississippi will happen despite local opposition to the project.

In a statement ChevronTexaco spokesperson Nicole Hodgson said, “The construction of the [Port Pelican] facility will be delayed until the company secures long-term LNG supply contracts. The supply could come from [our] LNG and natural gas operations in Venezuela, Nigeria or Angola [but] it is too early to say what sort of long-term commitments the company will negotiate.”

“The offshore terminal has recently completed engineering work, with the next step slated to be construction. That construction was expected to begin this year [but], at the moment, we did not feel it was prudent to move into the construction phase until long-term supply was secured. In the meantime, commercial and regulatory efforts continue,” she added.

The Port Pelican project was expected to begin commissioning operations in 2007 and consists of the terminal, LNG storage, regassification facilities and pipeline interconnection which will connect to US interstate gas pipeline network through the Henry Hub. Once completed, Port Pelican will be able to handle up to 1.6 billion cubic feet per day.

On a separate note, Gulf LNG Energy has announced it will seek the permit needed to build and operate a LNG terminal to be located at the mouth of Bayou Casotte near Pascagoula.

In a statement the Houston-based firm said, “The company plans to build a US$450 million terminal complex to receive the LNG and convert it back to natural gas to be sent through existing gas transmission lines to other areas in the United States. The terminal facility will take two and half years to complete and is expected to employ up to 1,500 people during construction. It will employ 50 people after completion.”

“[We] soon expect to begin the application process for a permit with the Federal Energy Regulatory Commission (FERC) to build the facility, which would be located on 40 acres of state-owned land on the estimated 300-acre Tenneco property. The permit process is expected to take about 18 months and will include public hearings, where citizens will be allowed to comment about the proposed project, and other avenues where the public will be allowed to express their views on the project,” it added.

According to Gulf LNG president Dee Osborne, “We’re calling [the facility] Project Clean Energy [and] the company was formed specifically for this project. The proposed terminal site is south of the BP Amoco processing plant [and I plan] to talk with BP officials about treating the reconverted LNG.”

“Gulf LNG does not yet have contracts with production companies for the gas [but this] will have to be done before the facility is built. The advantages [of the site is] the Bayou Casotte channel, which is 42 feet deep and 350 wide, the location of the 36-inch Destin Pipeline adjacent to the proposed facility site, treatment plant facilities and underground gas storage facilities north of Jackson County. There are also three other transmission lines close to the proposed site.

“The project will provide revenue for the port and allow local industries the opportunity to buy natural gas at lower prices than if they were to buy it from other sources,” he added.

The project, understandably, has its critics. Amongst them is Mississippi Sierra Club conservation chairman and vice chairman of the Mississippi Sierra Club Becky Gillette.

“It’s not just concern for the safety of the people of Pascagoula, but for the industries like Chevron, Northrop Grumman, Mississippi Phosphates every industry could be affected in an accident. The fireball from an LNG explosion is two miles wide,” she said.

“Such concerns are lessened when LNG terminals are moved offshore,” added Gillette.

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