Suez LNG pulling out of city

Business

The colossal tugboat Independence will sail out of Gloucester in a little over a month.

It and the Neptune LNG office below Cruiseport are moving to Charlestown when the company's lease runs out at the end of June.

Neptune is a local subsidiary of the French multinational corporation GDF Suez. The company says it's consolidating its offices closer to Boston, near its main area operation in Everett.

Distrigas of Massachusetts LLC is based in Everett and runs an liquefied natural gas terminal on the Mystic River. Economics, said company spokeswoman Carol Churchill, prompted the move, which consolidates offices currently in Boston, Chelsea and Gloucester in Charlestown.

"It was more economical to house everyone in Charlestown," Churchill said.

The Independence serviced GDF Suez's Neptune LNG terminal 10 miles southeast of Gloucester. The terminal is an off-shore pipeline that runs out from Boston. Suez finished building the pipeline in October 2010 for $1 billion. It managed the line, in some respect, from the Neptune office under Cruiseport.

"It wasn't that it wasn't working," Churchill said. "We enjoyed our stay in Gloucester."

Suez used the office for storage and had a manager for the terminal based in Gloucester. The offices have been there on a five-year lease since 2007, but the lease runs out June 30.

Suez will continue running the terminal, only it will do so from Charlestown rather than in Gloucester. The terminal, Churchill has said, supplements the company's Everett operation. In the two years since GDF Suez opened the Neptune terminal, the company received four shipments from LNG tankers.

While the terminal can process 400 million cubic feet of gas per day, shipments to it depend on the region's demand for natural gas, and recently that demand hasn't been high anywhere. National natural gas production from shale deposits has increased over the last few years — so much so that storage space for it is running out as the price of natural gas dropped.

Much of New England's natural gas comes through pipelines from shale gas production. But, liquefied natural gas is brought in by ship to ports such as Neptune and Distrigas' Everett terminal. One of the main reasons to build the offshore ports has been to increase the supply of natural gas to New England, while avoiding new shipments to crowded land-based ports such as Boston or Fall River.

Neptune was the second offshore LNG port to open off the North Shore since 2008. Five miles to the west of the Neptune terminal, essentially off the coast of Manchester, is the Northeast Gateway port, owned by Texas-based Excelerate Energy.

Both ports faced intense local opposition when they were proposed and entered permitting — much of it because they are located on prime fishing grounds and come with large security perimeters that force boats to steer clear whenever a shipment is coming in.

Each of the two operating companies donated $23.5 million in mitigation to Massachusetts interest groups, including $6 million each to the Gloucester Fishing Community Preservation Fund in an effort that helped avoid legal challenges.

Steven Fletcher may be contacted at 1-978-283-7000 x3455, or sfletcher@gloucestertimes.com. Follow him on Twitter at @stevengdt.