LNG firm, tribe sign to build terminal Facility would create more than 70 positions

PLEASANT POINT – A proposed $300 million liquefied natural gas facility could turn a tribe struggling to make ends meet into a major economic player in the state once the project is completed.

The Passamaquoddy Tribe and Quoddy Bay LLC, a Tulsa, Okla.-based energy development company, Tuesday signed an exclusive development agreement for a liquefied natural gas facility.

The project’s proponents expect to notify the Federal Energy Regulatory Commission of their intent to file an application by December.

There could be as many as 1,000 jobs during the construction phase and more than 70 full-time jobs once the facility is up and running. High-end jobs could pay more than $60,000, tribal officials said.

The plan calls for an LNG import terminal and a possible electric cogeneration facility to be built on 40 acres at Pleasant Point, also known as Sipayik. A natural gas pipeline would be built to interconnect with the Maritime & Northeast pipeline in Baileyville, a distance of about 40 miles.

Several years ago, Maritimes & Northeast Pipeline of Boston built a $3 billion pipeline from Sable Island off Halifax, Nova Scotia, through Maine. The Maritimes pipeline system consists of a main underground pipeline about 670 miles long stretching from Goldboro, Nova Scotia, through Nova Scotia and New Brunswick to the Canadian-U.S. border near Baileyville. The pipeline passes through Maine and New Hampshire into Massachusetts where it connects with the North American pipeline grid at Dracut, Mass.

Pleasant Point will serve as the host community and also be a project participant, Quoddy Bay spokesman Jim Mitchell said. The tribe’s unique legal status could provide an important advantage in the permitting process, he added, because the tribe is considered to be a municipality.

The federal government, Mitchell said, has support programs that provide economic and social benefits to Indians. “This project, if it is put together right, can have some substantial benefits for the local citizens and for the region,” he added.

Another advantage, Mitchell said, was the tribe’s ability to create a corporate entity to work with the Oklahoma-based company.

Tribal state Rep. Fred Moore III said the agreement would give the tribe a “big piece of the pie.”

“It would eliminate the tribe’s economic concerns for the foreseeable future,” he said. “We are considering a long-term lease for about 50 years in the neighborhood of about $8 million a year for the lease. Should the tribe form a utility the tribe then would become part owner of the product.”

Quoddy Bay partner Donald Smith said in a press release issued Tuesday that he was enthusiastic about the project and the partnership with the tribe. Smith’s company, Smith Cogeneration, operates several energy facilities around the world.

Pleasant Point Gov. Melvin Francis agreed. “Our community is pleased to be part of the effort to locate a viable LNG import terminal in Maine that will benefit our people, the state and the region with enhanced energy security and reliability. This potential project represents real economic opportunity for Sipayik and the state as a whole,” he said.

It was through his connections in Augusta that Moore was able to steer the Oklahoma group to tribal officials on the reservation. “The proposed project opens up for all of us in eastern Maine new economic development options that previously had not been within the realm of possibilities,” Moore said.

Gov. John Baldacci on Tuesday expressed support for the plan. “I’m pleased that Governor Francis and his tribal council are working toward a project that will bring jobs to Washington County and more clean energy options to the Northeast.” Baldacci said. The governor promised he would work closely with the tribe. “My administration will work hand-in-hand with Governor Francis and federal agencies to protect and promote local, regional and statewide interests. Outreach and education and more partnerships will be key next steps.”

But others plan to take a wait-and-see approach. Environmentalist Alan Brooks of Trescott said that he needs to know more about the project. “I am concerned about the infrastructures needed and the hazards involved. I am particularly concerned about security issues with the bringing of LNG tankers through Canadian waters and then into American waters,” he said.

Brooks said he also wondered whether the project would benefit Washington County. “Or will the gas just be piped out of the area for other people?” he added. He also wanted to know whether Maine environmental laws would apply to the tribe, “since it impacts the whole region,” he said.

Developers and engineers have been on the reservation scoping out possible sites, including land near where the tribal office is located on Route 190.

The developers have begun to inform neighboring communities.

LNG is natural gas cooled and condensed into a liquid. The product comes from places as far away as Algeria, Trinidad, Venezuela, Nigeria and Australia and as close as Alaska.

“A large refrigeration system called a train is used to liquefy natural gas by cooling it to about minus 260 degrees Fahrenheit,” Mitchell told Alice Cates, chairman of the Eastport City Council in a letter. “It is then transported by tankers to the terminal and off-loaded into large tanks. The LNG is then drawn off from the tank and heated so it will vaporize. The resulting natural gas is then injected into the pipeline system,” Mitchell said.

Safety features at LNG facilities include methane detectors, ultraviolet or infrared fire detectors and closed-circuit television. Other safety features include off-site monitoring, training requirements for personnel and restricted access to terminal property.

But there are safety concerns. The substance is a hazardous fuel, and a large spill could cause a pool fire or a vapor cloud fire with intense heat. “Safety zones around the facility are necessary to protect people and property,” Mitchell added.

It is those safety concerns, Rep. Moore said, that will have the Passamaquoddy also looking closely at the project. “Obviously we don’t want to create craters where Pleasant Point once stood,” he said. “At the same time I don’t want to raise fears, but these are obvious questions that need to be asked.”

Mitchell said numerous information meetings would be held for people on and off the reservation.

There are communities in Maine fighting to keep LNG facilities out of their back yards. Earlier this month, Searsport residents rejected the construction of an LNG terminal in their community by 10-to-1 in a nonbinding straw poll. On March 9, residents in Harpswell rejected leasing 70 acres of town-owned waterfront land to TransCanada and ConocoPhillips for an LNG terminal.

Nearly 30 LNG import terminal proposals are pending in the United States.