In December of 2006, Downeast LNG filed applications with the US Federal Energy Regulatory Commission (FERC) and regulatory authorities in the State of Maine to build an LNG import terminal and regasification plant in the town of Robbinston on the Maine/Canada border.
The facility would have a 500 mmcfd baseload capacity, with a peak capacity of 625 mmcfd. It will have two 160,000 m3 capacity full containment LNG storage tanks.LNG ships are expected to arrive weekly with capacity ranging from 70,000 m3 to 160,000 m3. The terminal will connect to the Maritimes & Northeast Pipeline at Baileyville, Maine, via a 31-mile lateral pipeline.
The Downeast LNG project is designed to help meet a projected gas supply/demand gap in New England of 1,250 mmcfd by 2015 and will be more competitive than LNG terminals in the Canadian Maritimes by taking advantage of the lower pipeline transportation costs.
The New England market, beyond the growing supply/ demand gap, is expected to have sustained moderate to high gas prices with a price basis differential of about $1 mmbtu over the Gulf of Mexico market. Compounding the supply situation, the Algonquin and Tennessee pipelines, the principal gas transmission pipelines into the region, are maxed out during winter peak periods with no likely expansion in the foreseeable future.
Further, the offshore Sable Island gas field in Nova Scotia, which currently supplies the Maritimes & Northeast Pipeline, has a rapidly declining production profile. The most likely option for additional gas supply for New England lies with LNG.
Economic development
Although there are strong commercial and technical arguments for the project, as well as its minimal environmental footprint, Downeast LNG was not developed solely as an LNG project. It is also very much about leveraging the project to create sustainable economic development by stimulating new business and employment growth in the vicinity of the project and by building a new model for the siting and approval of a major energy project that includes a high degree of community involvement and support.
After working overseas in international development, followed by many years as an international energy consultant, I developed some fairly strong opinions about the interaction between energy projects and economic development, and the need for a high degree of community involvement. In the USA over the past five years, many proposed LNG terminals in various communities fell victim to poor planning, misplaced fears and intense local opposition – similar difficulties and challenges energy projects overseas faced when communities were not involved in the development and not informed fully about the project.
Strategy
After identifying the market need for the project, our strategy for developing an LNG regasification import terminal was straightforward:
1. Evaluate a number of potential sites
2. Identify a potentially supportive community with suitable land and marine environments
3. Secure legal control of the best site
4. Leverage the LNG project to stimulate the local economy and job growth
5. Use a bottom-up, minimal impact approach to siting
6. Team up with local economic development NGOs
7. Address opposition with a sound economic development strategy and strong educational program
8. Be totally transparent with all aspects of the project.
Downeast LNG spent almost a year identifying and assessing 27 potential sites along the New England coast. We applied a rigorous ‘fatal flaw’ analysis to each one, using over 40 evaluation criteria. Ultimately, the site that ranked the highest according to our criteria was an 80-acre parcel on Mill Cove at the mouth of the St. Croix River in Robbinston, Maine.
The site has excellent water access, a deep channel, is on an active shipping channel with minimal current and well protected from New England’s infamous winter ‘Northeaster’ storms. As well, there would be minimal socioeconomic impacts on the community, given its remote location, with minimal visual impact and virtually no disruption of recreational, fishery or other activities.
