LNG terminal drawing little traffic

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April 13, 2012

LNG terminal drawing little traffic

By Steven Fletcher Staff Writer The Gloucester Daily Times Fri Apr 13, 2012, 03:39 AM EDT

Two full years after GDF Suez opened the Neptune liquefied natural gas (LNG) terminal 10 miles southeast of Gloucester, the multinational energy company has received just four shipments from fuel-laden tankers.

GDF Suez built the terminal and 13-mile long underwater pipeline in 2008, completing work in October. It opened in February 2010, said Carol Churchill spokeswoman for Distrigas, a Boston division of Suez.

The Neptune terminal off Gloucester received its last shipment in September, Churchill said, adding that the low number of shipments depends on New England's demand for natural gas.

With the warm winter, she said, demand hasn't been high anywhere.

"We haven't had a shipment in a while, given the fact that the price of (natural) gas is so low," Churchill said.

The price of natural gas, according to the U.S. Energy Information Administration, averaged about $2.08 per million British thermal units (mmbtus) in March. That price wasn't expected to get any higher this month as 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 drops, according to an Associated Press report.

While the increased natural gas production hasn't effected GDF Suez and Distrigas directly, Churchill said that sales have slowed down as utilities and power plants have used far less natural gas this winter.

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 like Neptune and Distrigas' Mystic River terminal in Everett.

The four shipments in two years, said Churchill aren't unusual.

The terminal, completed and opened in October 2010 for $1 billion, was a long-term investment, she added. It was meant to supplement the deliveries at the 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.

The Neptune project has involved multiple components stretching from the North Shore to shipyards in South Korea and refineries in the Middle East.

It has also involved extensive federal security reviews that have evolved over the years along with shifting terrorist threats. The platform consists of two off-loading buoys that connect ships to the underwater pipe system.

Neptune was the second offshore LNG port to open off the North Shore since 2008. Five miles to the west of the Neptune terminal 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.

The project, including Neptune's two tankers, is expected to provide enough gas to heat 1.5 million homes per day.

Suez estimated that Neptune would generate $10 million in local economic activity over 20 years.

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