Thumbs up for Three LNG Terminals, Down for Another

            In late June FERC approved the construction and operation of three new liquefied natural gas ("LNG") terminals that jointly will be able to import up to four billion cubic feet per day of LNG into the United States.  Weaver's Cove Energy and Mill River Pipeline, affiliates of Hess LNG, proposed one of the projects, which will be located in Fall River, Massachusetts.  The other project, proposed by Golden Pass LNG Terminal and Golden Pass Pipeline, subsidiaries of ExxonMobil, will be constructed in Texas and Louisiana.  These projects, together with the Vista del Sol LNG Terminal LP that FERC approved earlier, are the latest in a slew of LNG proposals intended to address the countries' growing natural gas supply deficit.  See UPDATE (06/30/04).

The Weaver's Cove project includes a new terminal and two affiliated pipelines that would connect the terminal to the Algonquin Gas Transmission system and intrastate pipelines.  The project has met with great opposition from local interests, but FERC said that with appropriate conditions the project should be authorized.  It is the first LNG terminal in the current onslaught approved for the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Northeast U.S.  The Golden Pass LNG terminal will be constructed at the Port Arthur ship channel in Texas and Louisiana.  Over 120 miles of new pipeline will connect the terminal with existing interstate and intrastate pipeline systems.

On the same day that it approved the Weaver's Cove and Golden Pass projects, FERC denied an application submitted by KeySpan LNG and Algonquin Gas Transmission to convert an existing LNG facility in Providence, Rhode Island into a new LNG import terminal.  FERC cited the applicant's failure to show that the facility would meet current construction and safety standards as its basis for the denial.

The Vista del Sol LNG Terminal LP and Vista del Sol Pipeline LP are also sponsored by ExxonMobil, and would be located in San Patricio County, Texas.  The past few months have seen FERC authorize the construction and operation of numerous other new LNG terminals in the Gulf region.  More approvals are likely in the pipelines as FERC endeavors to increase U.S. capacity for importing LNG.  Initial approval is no guarantee that proposed projects will successfully navigate the difficult path to completion and operation. [Weaver's Cove Energy, LLC, 112 FERC ¶ 61,070 (2005), Golden Pass LNG Terminal LP, 112 FERC ¶ 61,041 (2005), KeySpan LNG, L.P., 112 FERC ¶ 61,028 (2005) & Cameron LNG, LLC, 111 FERC ¶ 61,490 (2005)] [UPDATE]