SEARSPORT – Negotiations are under way for a $400 million to $500 million liquefied natural gas terminal at Sears Island, where the fuel would be piped to a connection with the Maritimes & Northeast pipeline 12 miles north in Winterport, a state official said Wednesday.

Construction of the terminal could create 1,000 jobs for three to four years, said Economic and Community Development Commissioner Jack Cashman, and 50-60 full-time jobs when operating.

But by incorporating part of the 940-acre Sears Island, considered the largest undeveloped island on the East Coast, the project would almost certainly provoke a strong response from environmentalists who fought transportation proposals for the island continually for some 20 years into the 1990s.

State officials apparently were not prepared to discuss the proposal until at least next month, but Maine Public Radio reported Tuesday evening that negotiations were under way between the Department of Economic and Community Development and a consultant for an unidentified company.

Cashman on Wednesday confirmed the negotiations.

While much of the U.S. natural gas supply comes from domestic underground sources, liquefied natural gas, known as LNG, allows the fuel to be shipped over water.

Much of the current supply for LNG comes from West African nations such as Liberia and Nigeria. After being pumped out of the ground in gas form, the fuel is cooled to more than 200 degrees below zero fahrenheit, which compresses and liquefies the fuel, making it easier to ship.

When it arrives at its destination, LNG is pumped out of a ship into tanks on shore at a terminal where it returns to gas form and then is pumped through a pipeline.

If LNG spills, it quickly evaporates, though large spills in water could result in short-term damage to marine life.

“The one danger is fire,” Cashman said, though there have been no major accidents with LNG. If the gas ignites, a catastrophic explosion would result.

Cashman said the unidentified company “approached us,” inquiring about using Sears Island, which affords deep water access near rail and highway links.

“These are good jobs, technical jobs,” Cashman said.

Both Cashman and Lee Umphrey, Gov. John Baldacci’s spokesman, said the governor is squarely behind the proposal.

“It’s a very good opportunity,” Cashman said, helping reduce energy costs in Maine.

Baldacci also backs a proposal by ConocoPhillips and TransCanada to build an LNG depot called Fairwinds on a former U.S. Navy site in Harpswell, Umphrey said.

While acknowledging that a balance must be struck between keeping Maine a desirable place to live and visit and developing its economy, Baldacci “is not going to shy away from opportunity” such as LNG terminals, Umphrey said.

The state has owned Sears Island since 1997. The state Department of Transportation held an option to buy the island in anticipation of establishing a dry cargo port at a jetty constructed on the northwest corner of the island. A causeway had been built linking the island to the mainland.

After then-Gov. Angus King pulled the plug on the cargo port, citing permitting and construction costs that had escalated to an estimated $70 million, the state completed purchase of the island.

Cashman and Umphrey said a lease with the terminal company is being contemplated, but state Sen. Carol Weston, R-Montville, said the governor’s office reported to her that a land purchase may also be considered.

The Maritimes & Northeast pipeline, which runs from the Sable Island gas fields off Nova Scotia through Maine, was hailed as an economic development boon for the state and New England when it was built in the late 1990s. Northern New England was one of the few areas in the United States that did not have access to natural gas.

But Cashman said “the reserves in Sable Island are not as large as we hoped,” and so a reliable source of gas would help sustain the area economy.

Weston, whose district includes Searsport, said after hearing about the negotiations on Tuesday, she was able to pry some details from the governor’s office about the plan.

A long pier carrying a pipe is envisioned, Weston said, so a docking facility affixed to the island may not be needed. The governor’s office also stressed that the LNG terminal would not be as invasive as the cargo port would have been, she said.

“This is a very different picture of Sears Island than what was going to be there,” Weston said she was told.

According to the Northeast Gas Association’s Web site, several new or upgraded LNG terminals are being proposed around New England and the Maritimes at Point Tupper, Nova Scotia; St. John, New Brunswick; Harpswell, Maine; Somerset, Mass.; Fall River, Mass., and Providence, R.I.

Weston and Umphrey said the success of the Harpswell project may spell the end of the Sears Island proposal because there may be no need for two terminals in Maine. Weston said she was told the company interested in Sears Island is not the same firm proposing the Fairwinds project in Harpswell.

A town vote on the Harpswell proposal is scheduled for Jan. 20.

After King dropped the bid for a Sears Island cargo port, many environmentalists chalked it up as a victory, thinking the island had been preserved. But then-Transportation Commissioner John Melrose said in late 1997 that the island was purchased chiefly for marine transportation purposes.

The Baldacci administration has retained that vision.

“All assets of the state have been part of the plan to revitalize the economy,” Umphrey said. “I don’t think it’s ever been our position that Sears Island is off the table.”

Weston said many people in Waldo County have assumed that when the state gated off all but pedestrian access to the island in 1998, Sears Island would remain undeveloped.

“The public perception was that it was a preserve,” she said.

Weston believes the terminal represents an economic development opportunity for the county, but she is relying on the series of checks and balances in the review process to ensure the environment is protected.

Dan Sosland, an attorney with the Conservation Law Foundation during the cargo port battle, worked to block the state project. Learning that the state was again seeking to develop it industrially left him baffled, he said.

“It’s a little confusing,” he said. “Sears Island as a site is really inappropriate. Here is this large, undeveloped island, where the environmental record [of the state] is poor.”

After 13 years of seeking federal permits, Sosland said, “The project didn’t go forward on its merits. I don’t know that anything’s changed now.”

Sosland now works for Environment Northeast, a nonprofit group specializing in energy and air quality issues. He said his organization advocates use of LNG in power plants because it produces two-thirds less pollution.

Sosland said redeveloping an industrial site for an LNG terminal makes more sense. Cashman said sites such as nearby Mack Point in Searsport, where the state has upgraded a cargo port, does not have enough land.

Joan Saxe, a volunteer with the Sierra Club, which led the early opposition to the Sears Island cargo port, was stunned to learn of the LNG plan. “I was just heartsick,” she said.