Houston Company Wants to Build LNG Terminal in Mississippi

A Houston-based company plans to begin seeking a permit to build an operate a liquefied natural gas terminal that would be located at the mouth of Bayou Casotte.

Officials for Gulf LNG Energy announced Wednesday afternoon that they soon expect to begin the application process for a permit with the Federal Energy Regulatory Commission (FERC) to build the facility, which would be located on 40 acres of state-owned land on the estimated 300-acre Tenneco property.

An independent agency, FERC regulates the interstate transmission of natural gas, oil, and electricity. FERC also regulates natural gas and hydropower projects.

The permit process is expected to take about 18 months and will include public hearings, where citizens will be allowed to comment about the proposed project, and other avenues where the public will be allowed to express their views on the project.

The Tenneco property is located on the eastern shore of Bayou Casotte, where the bayou enters into the Mississippi Sound. With the exception of the proposed terminal site, the Tenneco property is owned by the Port of Pascagoula. The port leases the 40 acres from the state of Mississippi. In August 2003, Gulf LNG signed an option to sub-lease the land from the port.

According to a press release from Gulf LNG, the company plans to build a $450 million terminal complex to receive the LNG and convert it back to natural gas to be sent through existing gas transmission lines to other areas in the United States.

The terminal facility will take 212 years to complete and is expected to employ up to 1,500 people during construction. It will employ 50 people after completion.

Port of Pascagoula Director Mark McAndrews said Gulf LNG will pay a total of about $1 million in rent to the state and the port, with $500,000 going to the State Tidelands Fund and $500,000 to the port. He said the company ap-proached port officials about the site.

The port is expected to receive at least an additional $3 million in fees from the facility, McAndrews said, adding "that will help us in our efforts to be able to operate the port without having to rely on the taxpayers."

"I think this proposed facility creates a great deal of opportunity and public benefit for the people of Jackson County," McAndrews said. "If the local people agree to it, I think this is a great positive."

"This proposed project stands to generate a significant capital investment for Jackson County," said George Freeland, Jackson County Economic Development executive director. "It, however, must balance that with the concerns of the environmental system and public safety."

Jackson County Supervisor Frank Leach said he was still learning about the LNG facility and the process, but said the project would help the port become independent from county taxpayers and provide a significant investment in development.

"We are depending on the Federal Energy Regulatory Commission, which is the regulatory agency for this type of development and we are de-pending on this type of due diligence to determine whether a project of this nature should be developed here."

"We're calling it (the facility) Project Clean Energy,'" said Gulf LNG President Dee Os-borne, who added that the company was formed specifically for this project. He said the company consists of himself and an investment group, adding that he is involved in one other LNG project, the Freeport, Texas, terminal, which he said is expected to go online soon.

"I looked up and down for a good site on the Gulf Coast and I found Pascagoula at Bayou Casotte to be ideal," he said.

The advantages, Osborne said, was the Bayou Casotte channel, which is 42 feet deep and 350 wide, the location of the 36-inch Destin Pipeline adjacent to the proposed facility site, treatment plant facilities and underground gas storage facilities north of Jackson County. There are also three other transmission lines close to the proposed site.

Some people, however, are concerned about the safety aspects of the proposed facility.

"It's not just concern for the safety of the people of Pasca-goula, but for the industries like Chevron, Northrop Grumman, Mississippi Phosphates every industry could be affected in an accident," said Becky Gillette, conservation chairman and vice chairman of the Mississippi Sierra Club. "The fireball from an (LNG) explosion is two miles wide."

Gillette said such concerns are lessened when LNG terminals are moved offshore.

Louis Miller, state Sierra Club director, said that after 9-11, LNG terminals have been considered top targets for terrorists.

Miller is also concerned about the FERC, which he said "has not been user friendly" to the public when if comes to LNG permit applications. He accused the FERC of preventing full public access to information about the facilities.

Liquefied Natural Gas is gas that is cooled to a liquid at -260 degrees and shipped by tanker in a liquid form to a terminal area, where it is received and reconverted to a gas to be sent through transmission lines to other areas.

Osborne said the liquid gas will be running through a heating system that will use natural gas heaters. The gas for the heaters will come from some of the reconverted LNG.

He said the gas is sent with some of the liquids, called condensate, still in the gas, adding the gas must be processed to remove the liquids, known as "hot liquids."

The proposed terminal site is south of the BP Amoco processing plant. Osborne said he planned to talk with BP officials about treating the reconverted LNG.

He said Gulf does not yet have contracts with production companies for the gas, adding, that will have to be done before the facility is built.

Osborne said the project will provide revenue for the port and allow local industries the opportunity to buy natural gas at lower prices than if they were to buy it from other sources.