Natural Gas

Several days ago, the National Marine Fisheries Service sent a letter to the U.S. Coast Guard stating their objections to the proposed Bienville Offshore Energy Terminal by Houston-based TORP (Terminal Offshore Regas Plant) Technology.

Under TORP’s plans, the terminal would be located 63 miles south of Dauphin Island, Alabama, in 425 feet of water.  The terminal would have a maximum send-out capacity of 1.4 billion cubic feet per day and would be capable of docking up to the largest 250,000-square-meter tankers that are now being built. The location is a strategic one for the company, because of its proximity to the Henry Hub and key U.S. markets.

The NMFS filed an official objection with the  over TORP’s plans to use an open-loop system to reheat the LNG and turn it back into a gas. In filing its protest, the fisheries service cited the potential damage to marine life. The service said the open-loop system could result in the destruction of both commercial and sports fishing stocks as well as damage other marine life. The open-loop system uses the ambient heat of fresh seawater to heat up the LNG and the cooled down water is then discharged back into the Gulf.The service has recommended TORP use the closed-loop system instead. This system uses part of the cargo to reheat the LNG. Industry backers have been against that system because it adds to their operating costs.

TORP Terminal chief executive Joe Berno has cried foul. From his Houston office, Berno says the NMFS has based their objection on inaccurate data.

In his response, Berno says, “TORP is extremely disappointed in the National Marine Fisheries Service (NMFS) letter released yesterday, as it appears that the agency formed its conclusion based upon inaccurate data.

“NMFS’ strongest argument against the facility is based upon the cumulative fishery impact of ‘existing and approved LNG terminals in the Gulf of Mexico proposing to use open-loop systems.’ We are working with NMFS to understand how they came up with the cited impacts, because there are only two potential open-loop projects in the Gulf–TORP’s Bienville Terminal and the Gulf Gateway project in Louisiana that has been in operation since 2005. This latter project only operates about once per year and is largely dormant. It appears that the NMFS has included other previously submitted projects named in the final EIS [Environmental Impact Statement] that have either been withdrawn or denied, and which should not to be used to determine a cumulative impact.

“We are hopeful that NMFS will correct the information used in its letter and re-evaluate its decision in light of the material difference caused by the error.”

Neither the Coast Guard nor the NMFS would comment on Berno’s challenge to the objection.

Stay tuned. More to come. This story is just beginning, so expect more news in the very near future.

–John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com

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