Robbinston LNG storage proposed

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ROBBINSTON – Already proposed as a site for a liquefied natural gas import facility, this bay-side Washington County town was identified Monday as the proposed site for an entirely different LNG structure, a three-tank storage facility built by a rival developer.

Quoddy Bay LLC is the Oklahoma firm that has an agreement with the Passamaquoddy Tribe to build an LNG import facility on the reservation at Pleasant Point. The company announced Monday that Quoddy Bay LLC additionally will seek approval for a storage facility in Robbinston, two towns away.

The terminal and the storage tanks would be connected by an 8-mile underwater pipeline through Passamaquoddy Bay.

Such an engineering feat has not occurred before in the LNG industry, but Brian Smith, Quoddy Bay’s project manager, said the pipeline was indeed possible.

“It’s not unusual,” Smith said Monday in a conference call from Oklahoma as he addressed reporters with the project’s announcement. “It hasn’t happened yet, but only because the necessity hasn’t been there.”

Calling its plan the Robbinston Inland LNG Storage Project, Quoddy Bay anticipates putting the project to a vote by Robbinston voters.

Quoddy Bay would give the town of 525 residents $1 million a year in addition to tax payments on the facility, with a likely property value of $230 million, Smith said.

The announcement to try to locate a storage facility near Quoddy Bay’s Pleasant Point LNG terminal comes on the heels of another developer’s plans to locate an LNG import facility within Robbinston.

On July 11 a Washington, D.C.-based group called Downeast LNG unveiled its plans to build a $400 million LNG facility on the south side of Mill Cove near U.S. Route 1.

Both companies believe their projects are not mutually exclusive and could move forward, pending federal approval.

Downeast LNG, which has purchased a four-year option on an 80-acre site at Mill Cove, has held two informational meetings with Robbinston residents. More than 200 people turned out for the first meeting on July 12, and 100 showed up for a July 14 meeting.

Smith said that Quoddy Bay’s Robbinston Inland LNG Storage Project, with its proposed three tanks, would be located within one mile of Downeast LNG’s import facility and its proposed two tanks.

The difference, Smith said, is that Quoddy Bay’s facility would be located on the west side of Route 1, away from Passamaquoddy Bay and screened by trees to minimize its visual impact. The Downeast LNG project would extend into the water at Mill Cove.

Quoddy Bay has secured options on 150 acres from four Robbinston landowners, Smith said. He declined to identify the landowners or disclose the value of the landowners’ contracts with Quoddy Bay.

Quoddy Bay’s $200 million import facility at Pleasant Point, should it gain federal approval, would not be operational before 2009, Smith said Monday in the conference call.

Quoddy Bay’s storage tanks in Robbinston likely would be operational in 2010 at the earliest.

Quoddy Bay’s plan for the LNG terminal at Pleasant Point involves a pier at the 15-acre site, but not storage tanks. The developer plans a system that would convert the liquefied fuel back into gas as soon as it is pumped off tankers docked at the terminal pier.

The gas could be stored in Robbinston by way of the proposed underwater pipeline. Estimated construction costs for the pipeline alone could be $100 million, or as much as $10 million or $15 million per mile.

“The exact costs are unknown,” Smith said. “We have worked into our economic projections what the maximum costs could be to be economically feasible. We feel that the costs associated with the pipeline would be an acceptable range.”

Smith stressed that Quoddy Bay LLC’s pair of projects are separate yet complementary.

“The development of the LNG storage facility will not in any way affect the import facility at Split Rock,” Smith said, “but it will complement it in the future.

“Can this [storage] project exist without the other [import] facility? It can, but it would not be as feasible without the importing capacity nearby. The big bonus is the storage.”

More than 100 LNG storage facilities exist around the country, Smith said. Yet only four LNG importing facilities now operate nationwide.

“It is another source of revenue for Washington County,” Smith said of the Robbinston project. “It will provide even more jobs and give the town a larger economic tax base.”

Construction jobs at the Pleasant Point and Robbinston facilities would number as many as 90 or 100, Smith said.

Quoddy Bay’s $1 million promise to Robbinston residents would be the basis for what the company calls an “economic development initiative” for the town, separate from the company’s property taxes.

Smith said the timing of the announcement of the Robbinston project after Downeast LNG’s announcement on July 11 is largely coincidental.

“We have been working with Robbinston landowners to acquire property rights for several months,” Smith said.

He conceded that the publicity surrounding Downeast LNG’s announcement earlier this month forced Quoddy Bay to show its hand sooner.

Quoddy Bay’s first meeting with the Robbinston Planning Board will be at 7 p.m. Thursday.

“This is the very beginning,” he said.

“We want to notify the Robbinston public and the local communities what we are planning. We will go to town meetings in order to gain input and to inform the public of our progress in this development.”