AES Delays LNG Pipeline Bids to mid-July

US energy company AES has delayed until mid-July plans to call for bids on a US$160mn contract to build an 84km natural gas pipeline from the Bahamas to Florida, project director Aaron Samsom told BNamericas.

AES had planned to call for bids in early June, but some minor design changes have delayed the process, Samson said. The delay will not affect AES' plans to start construction of the pipeline in early 2004, with commercial operations to start in late 2005 or early 2006, he said.

The 24-inch diameter pipeline, which will have a capacity of 850 million cubic feet a day (mcf/d), is part of a US$650mn project that includes the construction of a liquefied natural gas (LNG) receiving terminal in the Bahamas' Ocean Cay. AES received preliminary approval from the Federal Energy Regulatory Commission (FERC) in April to build the part of the pipeline under US jurisdiction, and expects the FERC to publish a draft environmental impact assessment (EIA) shortly, which will be made open to public comment and then a final EIA should be approved by October, Samsom said.

As for the terminal, AES has awarded a US$300mn turnkey contract to US company Chicago Bridge & Iron (NYSE: CBI), but is still waiting for the Bahamian government to approve an environmental impact statement (EIS), Samson said.

Samson attended a town meeting in the Bahamas last week to respond to questions about the project, he said, adding that the EIS is expected to be approved in the next 30-60 days. AES subsidiaries AES Ocean Express and AES Ocean LNG are managing the construction of the respective pipeline and receiving terminal projects. AES expects to supply about a third of Florida's gas demand, which is expected to grow by 2.4 billion cubic feet a day in the next 10 years.

Two other similar LNG projects are planned by Belgian company Tractebel and US-based El Paso, but the Bahamian government has previously said that it will only give permission to two of the three proposed pipeline projects. The receiving terminal will be at least 50% supplied by LNG shipped from Africa and AES Ocean LNG could also sign contracts with nearby Trinidad's Atlantic LNG project.

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