Thursday, December 13, 2007
Corporate News: Exxon plans LNG terminal off U.S. East Coast
13 December 2007
The Wall Street Journal
Russell Gold
Excelerate Energy LLC expects to complete construction of a liquefied natural gas terminal off the Massachusetts coast later this month. It will be the first new LNG terminal built on the East Coast in three decades. An article Thursday incorrectly said a proposed Exxon Mobil Corp. terminal would be the first new terminal.
(END)
In an effort to bring international supplies to the energy-hungry U.S. Northeast, Exxon Mobil Corp. plans to spend $1 billion to build a floating natural-gas terminal 32 kilometers off the New Jersey coast.
The terminal would be the first East Coast terminal to handle liquefied natural gas, or LNG, built in three decades. Expectations of rising demand have led to several attempts but brought opposition from local officials and environmental groups. LNG doesn't raise the same pollution concerns as crude oil, but some critics have said the terminals raise safety concerns and can still be environmentally disruptive.
The Irving, Texas, company said it would build the terminal far enough from shore to ease safety and security concerns. The LNG would be taken off the tankers and stored in its freezing, liquid form in tanks on the floating terminal. Then it would be reheated, returned to its gaseous state, and sent into a pipeline to shore. It would deliver about 1.2 billion cubic feet a day, enough for five million residential consumers.
Natural gas -- a major fuel for electricity and home heating as well as a raw material for everything from plastics to fertilizer -- is generally transported by pipeline. When chilled to 162 degrees below zero Celsius, it turns into a liquid that can be shipped overseas in tankers like oil. That has led to a small but expanding market for overseas gas trading, letting industrialized nations use more than nearby fields provide.
In the past few years, several LNG terminals along the U.S. Gulf Coast and in Europe have been approved and built. Exxon has built, or is in the process of building, LNG terminals in Texas, in Wales in the U.K. and in Italy.
Along the U.S. East and West Coasts, fears the equipment could become a terrorist target or pose a hazard have prevailed, and several other LNG-terminal proposals have languished. The U.S. Coast Guard, for instance, has rejected plans to build a terminal in Fall River, Massachusetts, because the river approach was deemed unsafe for large tankers. California Gov. Arnold Schwarzenegger vetoed a proposal to build one 22.5 kilometers off the coast of Oxnard, California.
Ron Billings, Exxon's vice president of Global LNG, said the company's terminal will survive scrutiny. "It all starts with this facility being 20 miles off the coast, which we feel gives it a minimal footprint in the environmental, safety and security aspects," he said.
Still, environmental opposition is likely. Cindy Zipf, executive director of Clean Ocean Action in Sandy Hook, New Jersey, said she expects to fight the terminal. "We've worked long and hard to improve the ocean's quality and health, and now there's industrial sprawl into the ocean," she said.
Exxon could face opposition on safety grounds as well. The company said there have been 40,000 LNG tanker voyages without a tanker rupture. But in 2004, an explosion at an Algerian liquefaction facility killed more than two dozen people.
