FERC stands by rejection of LNG terminal in Prov.

The Federal Energy Regulatory Commission on Thursday affirmed its July 2005 decisions to approve the construction and operation of a new liquefied natural gas (LNG) terminal in Fall River, Massachusetts, proposed by Weaver’s Cove LNG, and to reject, for safety reasons, a proposal submitted by KeySpan LNG to convert an existing liquefied natural gas (LNG) storage facility in Providence into an import terminal that would serve gas to the northeast United States.

“The Commission’s primary role in reviewing LNG import facility authorizations is to ensure public safety,” said chairman Joseph T. Kelliher. “Our actions today demonstrate our commitment to high safety standards. New England is facing a winter of very high natural gas prices. The region sorely needs additional gas supplies and a stronger gas infrastructure. While both of these projects are needed, we only approve one.”

The Commission’s decision in the Weaver’s Cove proceeding denies appeals filed by several parties who challenged the July 15, 2005, Commission order authorizing the Fall River facility, and responds to arguments or issues the parties raised. The Commission denied petitions for rehearing filed jointly by the City of Fall River, the Rhode Island Attorney General, and the Massachusetts Energy Facilities Siting Board.

Citing increasing need for imported natural gas to meet growing demand, the Commission’s July 15, 2005, order granted authority to Weaver’s Cove to site, construct, and operate a new LNG terminal in Fall River that would bring up to 800 million cubic of gas per day of new service to customers in New England. .

The Commission denied pleadings from Fall River, which sought dismissal of the Weaver’s Cove LNG application on a number of issues including recent legislation that prohibits federal funding for the demolition of the nearly 100 year old Brightman Street Bridge. The petitioners asserted that the bridge, which spans the Taunton River downstream from the proposed facility, would not be able to accommodate the passage of certain LNG tankers to serve the new terminal.

In the proceeding involving Keyspan’s proposed LNG facility in Providence, KeySpan and BG LNG Services (BGLS) filed a joint request seeking a reversal of the Commission’s July decision denying KeySpan authorization to site, construct and operate the expanded facilities that would be located in Providence.

The Commission’s July 5 order rejected the proposed project, ruling it would not be in the public interest because the existing facilities would not meet current federal Department of Transportation (DOT) safety standards required of all new LNG import facilities.

David J Manning, executive vice president and chief environmental officer at KeySpan, said,”the apparent invitation expressed at the FERC open session (on Thursday) for KeySpan to amend its application to address the concerns raised in the initial order issued last year comes at an important moment for those who know how critical new energy supply is for Rhode Island.”

Senator Jack Reed said, “I am pleased that the FERC has reaffirmed its decision to reject the proposed construction of an LNG storage facility in Providence. I will continue to work with my colleagues in Rhode Island and Massachusetts to discuss what we can now do to stop the Weaver’s Cove decision. It is my hope that the Army Corps of Engineers rejects dredging permits for this project,” he said.

Attorney General Patrick Lynch, said, “Our most immediate action will be to stand with the people of Fall River, as we have done from the start, to continue our fight to protect the people of this city, as well as the significant number of Rhode Island residents who would be directly affected by our waterways serving as superhighways for supertankers.”

Representative Patrick Kennedy said, “The decision essentially allows project developers to move forward with plans for a facility that threatens the health and safety of thousands of citizens and negatively impacts one of our greatest resources, Narragansett Bay.”