LNG firm eyes no-tank design on tribal land

PLEASANT POINT – An Oklahoma energy company that wants to build a liquefied natural gas terminal at Split Rock is considering a design for the facility that could give Eastport-area residents fewer reasons to worry about their future safety.

The practice of storing large quantities of the combustible fuel in populated areas has raised safety concerns, especially since the Sept. 11, 2001, terrorist attacks. It is believed that large tanks with millions of gallons of LNG stored inside them could pose a threat to nearby residents and to the surrounding environment should an accident or premeditated attack occur at an LNG facility.

Quoddy Bay LLC, the Oklahoma firm that hopes to construct an LNG terminal on Passamaquoddy Tribe land at Split Rock, believes it has an answer for that concern. Rather than building storage tanks at the relatively small 15-acre site next to Route 190, it is considering a system that would convert the liquid fuel back into a gas as soon as it is pumped off tankers docked at the terminal’s pier. Immediately after being vaporized the fuel would be routed via a pipeline connection to Baileyville, where it would feed into the Maritimes & Northeast Pipeline, eliminating the need to store any LNG at Pleasant Point, Quoddy Bay LLC project manager Brian Smith said Thursday.

With such a system, there only would be LNG at the site when a tanker is in port, Smith said. If a security or safety concern arose, he said, the ship could be sent back out to sea and away from nearby communities.

“The ships themselves can be removed at any time,” Smith said. “All we’re doing is removing the tanks from the equation.”

Smith said Quoddy Bay LLC is not considering a system by which tankers would pump vaporized LNG to land while anchored off the coast because of several reasons. It is preferable to offload LNG at a sheltered site, he said, and the equipment needed to convert LNG to gas while at sea involves “unproven and unknown” technology.

Another LNG company, Excelerate Energy of The Woodlands, Texas, has developed a new LNG-offloading system in which specialized tankers convert the liquid fuel back into gas and pump it directly into a supply pipeline from miles offshore. The Texas company has built one such system in the Gulf of Mexico, where tankers pump natural gas to shore through an underwater pipe that extends more than 100 miles off the Louisiana coast. Tankers anchored off the North Shore of Massachusetts, where Excelerate has plans for another facility, would pump gas to land from 10 miles out at sea.

“We’re relatively risk-averse,” Smith said, indicating that the new technology developed by Excelerate carries a greater expense and financial risk than more traditional offloading methods.

In terms of other kinds of risk, Quoddy Bay’s presence in Washington County will result in better emergency response capabilities in the region, according to Smith.

The Oklahoma City-based firm will have to pay for enhanced security and safety measures in the area, which government regulators likely will make a condition of granting Quoddy Bay approval to build the terminal, he said. The company will have its own personnel to keep the site secure, he said, and local emergency response agencies will be given additional resources to improve their ability to respond to any emergency in the surrounding area.

“There will be an increase in public security,” Smith said. “If [government regulators] say we need to do more, we’ll do more.”

Once tankers are in port, it will take between three and six days to vaporize and offload their cargo, Smith said. How frequently tankers arrive depends on the individual contracts Quoddy Bay would secure, he said, but the time gap between ships could be as short as a few hours.

Besides getting approval for the planned terminal at Split Rock, Quoddy Bay also will have to apply for permits to construct a pipeline extension between Pleasant Point and Baileyville. Smith said the company wants the extension to follow an old railroad right-of-way that connects the two locales.

Among the federal agencies that will review Quoddy Bay’s development applications are the Coast Guard, Environmental Protection Agency, Federal Energy Regulatory Commission, U.S. Army Corps of Engineers and U.S. Department of Transportation, Smith said. Involved state agencies likely will include Department of Environmental Protection, Maine Department of Transportation, Maine Historic Preservation Commission, and the State Fire Marshal’s Office.

“There will be many permits,” he said.

Because tankers will be guided through 10 miles of Canadian waters to get from the Bay of Fundy to Split Rock, Canadian authorities also are expected to weigh in on the merits of the project, according to Smith.

Quoddy Bay expects to spend between $5 million and $7 million on the permitting process and another $200 million to $400 million on constructing the facility, the final design of which has not been determined, Smith said. How much revenue the company stands to make from the facility, he said, is difficult to predict because of the uncertainty of future gas prices.

Quoddy Bay expects to have completed enough planning over the next several months to begin the permitting process around the end of the year, he said.