Quoddy Bay LLC promises world’s safest terminal

AUGUSTA – With a map of Passamaquoddy Bay looming behind him, Donald M. Smith cast modesty aside Tuesday as he outlined plans for the construction of Maine’s first liquefied natural gas terminal.

“It is going to be the most reliable source of natural gas that has ever been built to bring gas into the United States,” Smith said.

Smith, the president of the Oklahoma City firm Quoddy Bay LLC, laid out the timeline for the $500 million project during a press conference held at the Maine Chamber of Commerce near the Augusta Civic Center. His son Brian, the project manager, said it was important for the company to take its message beyond Washington County where it hopes to build its terminal on Passamaquoddy tribal land near Pleasant Point.

“We’re here in Augusta because this project is far more than just a local project,” Brian Smith said. “It’s a state project – in fact, it’s a regional project, and we are thrilled to be able to let everybody in the region know what we intend to do.”

Quoddy Bay LLC became the first company to file a formal pre-application letter for an LNG project when it submitted documents to the Federal Energy Regulatory Commission on Friday. Two other developers are also interested in obtaining federal permits for LNG facilities, but have yet to file with FERC.

Dana M. Connors, president of the Chamber, emphasized that his organization was not favoring one developer over another by permitting Quoddy Bay LLC to hold its press conference at Chamber headquarters.

“We do see the siting of an LNG facility as a very important economic development initiative for the state of Maine, for the region – as a matter of fact – for the entire Northeast,” Connors said.

Donald Smith said his company would begin an application process that could take up to nine months in late January or early February when initial hearings on the proposal are held in Perry where the company’s 170-acre storage facility would be located. The Smiths hope Maine’s regulatory agencies can work in tandem with their federal counterparts to streamline the application process, which will involve filing 13 reports and numerous hearings and scoping sessions. The meetings will scrutinize the project’s impact on the environment, economy, wildlife and public safety.

Should all proceed as well as Quoddy Bay LLC anticipates, the company could make its formal application to FERC and state agencies by next September with the goal of beginning construction in 2007 and initiate actual LNG deliveries two years later. With duplicate facilities for converting the liquid back to a gas at the shipping terminal and the storage facility a mile away, Quoddy Bay hopes to produce 2 billion cubic feet of gas a day.

“This can be lower-cost energy, both for heating homes, running businesses and making electricity, than what is offered from world oil imports,” Donald Smith said. “We can de-link the cost of energy in New England from the very high world oil imports and make clean gas available to substitute for more polluting fuels.”

The Quoddy Bay LLC project is made up of four fundamental components:

. A pier and platform in Passamaquoddy Bay where LNG tankers will unload liquefied gas.

. The Split Rock Support Facility, including such infrastructure as a metering station and a power generator.

. A 40-mile natural gas pipeline connecting with the existing Maritimes & Northeast Pipeline system to transport natural gas throughout Maine and into southern New England.

. An onshore storage and regasification facility within one mile of Split Rock in Perry, housing three 160,000-cubic-meter storage tanks.

“These tanks are the state of the art and will be the safest in the world,” Brian Smith said.

Confident of his project’s likely success during the permitting process in the United States and Canada, Donald Smith knows he will face a more formidable challenge in winning the support of typically suspicious Mainers.

“The first issue is getting the facts out,” he said. “I believe our company, in working with the tribe, didn’t do enough in the early going to communicate to the local community. We will do next to a heroic job in communicating scientifically what the impacts are and work in every way possible to communicate that to the residents of Maine.”