More on LNG

2 gas plants needed for N.E.
But facilities can be built in Canada instead of here, US official says
By Peter J. Howe, Globe Staff | September 14, 2004

At least two of the roughly dozen liquefied natural gas plants proposed for New England and eastern Canada must get built by 2010 to ensure New England has adequate supplies of gas for heating and power generation, President Bush's top energy regulator said yesterday.

However, Patrick H. Wood III, chairman of the Federal Energy Regulatory Commission, said it may be possible for LNG plants proposed in Nova Scotia, New Brunswick, and Quebec to meet much of the demand. That could reduce or obviate the need for proposed developments along the Massachusetts coast that have generated opposition because of fears tankers laden with super-chilled natural gas could become targets of terrorist attacks.

Referring to a slew of LNG plant proposals from Fall River to eastern Nova Scotia and the St. Lawrence River, Wood said, ''If two of those get built, you should be in good shape. If we don't get any of those built, we'll be in trouble. Where the two are built has some importance, but frankly, getting the volume in here is the important thing."

Gas pipelines from Canada into New England should have ample capacity to move LNG-derived gas from there into this region, Wood added. LNG technology chills gas to 260 degrees below zero, shrinking it to a liquid that is 1/600th of its volume as vapor, so that natural gas produced in the Middle East, Trinidad, and other locations can be economically transported to areas such as New England, then turned back into vapor gas and piped into homes, office buildings, factories, and power plants.

Wood, who spoke during an energy conference sponsored in Boston by Independent System Operator New England, the regional power-grid operator, said upgrades of existing pipelines or efforts to conserve gas will not be able to prevent the region from facing a gas-demand crunch.

''I just don't see that increase in demand being met any other way," said Wood, a former Texas utility regulator named to the federal post by Bush three years ago. ''I just wish we had about 10 more options, but there aren't." The FERC generally plays the key federal role in certifying the need for LNG facilities and approving their locations.

During a record cold snap Jan. 14, the region came close to exhausting gas pipeline capacity, and residents of dozens of homes at the extreme end of a KeySpan Energy Delivery pipe in Hull were evacuated when the utility determined it could not guarantee them adequate supplies.

New England is also straining its existing gas supplies because virtually all of the new power plants that have gone into service here in the last four years -- increasing electric generating capacity by 23 percent -- burn natural gas. Projections cited by Wood show annual gas demand for electric generation increasing from 246 billion cubic feet last year to 324 billion cubic feet by 2008, even as residential and commercial heating and industrial demand continue to gradually rise.

In addition to land-based LNG proposals in Fall River and Somerset, KeySpan is seeking approvals for a conversion of its existing Providence LNG plant to increase the amount of liquefied gas it can distribute.

A Texas energy company called Excelerate Energy LLC wants to build an offshore LNG off-loading facility about 10 miles southeast of Gloucester. And the Passamaquoddy Indian tribe is pursuing plans for an LNG facility on tribal property in Pleasant Point, Maine, hoping for an economic boost.

Besides those locally based proposals, however, at least five plans are in the works for LNG off-loading plants in eastern Canada. They include a proposed plant in St. John, New Brunswick, backed by Irving Oil that could ultimately handle 1 billion cubic feet of gas daily -- roughly one-quarter of average New England demand -- and which has received its key provincial and federal environmental approvals.

The other Canadian plans include 500-million-cubic-foot proposals in Quebec City and Riviere Du Loup, Quebec; and two projects each with 1 billion cubic foot capacity in Goldboro and Point Tupper, Nova Scotia.


Peter J. Howe can be reached at howe@globe.com.