LNG work begins off Cape Ann, maritime groups receive $23.5 million

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July 23, 2008

LNG work begins off Cape Ann, maritime groups receive $23.5 million

By Patrick Anderson The Gloucester Daily Times Wed Jul 23, 2008, 05:35 AM EDT

Suez Energy is marking the start of construction of the Neptune liquefied natural gas pipeline and offshore terminal today by dolling out $23.5 million in mitigation to an assortment of regional maritime causes.

The new $1 billion Neptune port, which will be run from a control center in Cruiseport Gloucester, has been touted as a source of jobs and spending for the local economy. The 400 million cubic feet of gas that can be off-loaded in a day at the facility has been called a vital source of energy for New England.

But to ease fears in the community about possible detrimental effects of the LNG port on the fishing industry, Suez agreed to a series of contributions, including $6.3 million to the Gloucester Fishing Community Preservation Fund and $1.7 million to the Massachusetts Lobstermen's Association.

Texas-based Excelerate Energy, which opened the Northeast Gateway terminal last month, has already paid out a similar mitigation package.

Preliminary work on the Suez pipeline began last week, triggering the payments, which were wired to the various organizations Monday.

Today at Cruiseport, Suez executives are scheduled to present a ceremonial check to an undisclosed group of mitigation recipients, with city officials, including Mayor Carolyn Kirk, in attendance.

The Suez officials also will deliver a report on Neptune's projected economic benefits to Gloucester, company spokesman Carol Churchill said yesterday.

Suez last year estimated the entire project could pump $10 million into the local economy and create at least 24 new jobs. including office managers, technicians and support staff. A 130-foot tow-and-maintenance boat will be docked at Cruiseport, under a 20-year lease with Suez.

From the surface, Neptune includes a buoy which gas-laden, custom-designed LNG tankers moor to while a floating, underwater connection to the pipeline rises up to meet them.

When the tankers are connected to the system, the super-cooled liquid gas is vaporized and transmitted through a 13-mile underwater pipeline that leads to a larger pipe, called the HubLine, located off the shore of Marblehead.

Hoegh LNG, a Norwegian subsidiary of Suez, owns two custom-built tankers which will be used at the Neptune port.

The HubLine crosses underneath Massachusetts Bay and connects the North Shore with an LNG plant in Weymouth. Suez officials have said the 400 million cubic feet of gas the port can off-load each day could supply natural gas for up to 1.5 million homes a day.

The first stage of the construction process involves preparing the sea floor and then laying the pipe from the terminal site to the HubLine. Right now in the waters off Gloucester, 170 workers living on the pipe-laying construction barge named Lone Star Horizon are beginning work.

Churchill said inclement weather and the threat of Tropical Storm Bertha delayed work temporarily, but the first sections of the pipeline are on schedule to hit the water in September.

The LNG port is expected to open for business in September 2009 and is projected to have a lifespan of 30 years.

While the largest single chunk of the mitigation payment is going to the Gloucester Fishing Community Preservation Fund, which buys fishing permits to keep them for local fishermen, some have expressed disappointment that many of the payments are ticketed to regional causes and organizations.

The payments include $3.25 million to the National Oceanic and Atmospheric Administration for an acoustic whale monitoring system in Stellwagen Bank National Marine Sanctuary, $5.6 million to the Harbor Alliance for preservation of the Boston Harbor Islands, $1.4 million to the state Division of Marine Fisheries, $1 million to the Provincetown Center for Coastal Studies, $600,000 for the New England Aquarium in Boston and $150,000 for the Peabody Essex Museum in Salem.

Today's event at Cruiseport Gloucester is scheduled to begin at 11 a.m.

Patrick Anderson may be contacted at panderson@gloucestertimes.com.