GloucesterTimes.com, Gloucester, MA

One of the liquefied natural gas companies building a terminal off Gloucester has distributed almost all of its $23.5 million mitigation obligation, with $6.3 million delivered to a new Gloucester nonprofit organization that will buy and lease local fishing permits.

Officials from Excelerate Energy LLC, a company based in The Woodlands, Texas, that is building a liquefied natural gas buoy 13 miles southeast of Gloucester, said nearly $24 million has been paid out as ordered by the state in December.

Of that, $6.3 million went to the Gloucester Fishing Community Preservation Fund, which was established once the mitigation package was ordered in December by then-Secretary of Environmental Affairs Robert Golledge Jr.

The nonprofit organization will buy fishing permits from local fishermen who wish to quit the industry and lease them to others in the area. The intent is to keep the stock of fishing permits around Gloucester. Strict limits on how much fish can be landed, as well as limitations on the days fishermen can be at sea, have reduced the fishing fleet in the city, leading some to worry that fishing-related infrastructure could dry up as a result.

Jackie Odell and Vito Giacalone, of the Northeast Seafood Coalition, who have been setting up the new nonprofit, did not return phone messages seeking comment yesterday.

However, in a statement Excelerate released yesterday, Giacalone, the fund's president, said, "We're beginning a new era where the energy needs of the commonwealth will require fishing interests to coexist with the deepwater LNG ports. That recognition led to funding for the Gloucester Fishing Community Preservation Fund, which is a concept that will provide recurring benefits to the fishing community for years to come."

Robert Bryngleson, executive vice president and chief operating officer for Excelerate, which will have an office in Salem, said the mitigation package was paid by about May 24, before construction began.

"It all had to be paid at or before the time construction started," he said following a press conference at Logan Airport in Boston yesterday.

Yesterday, state officials and Excelerate executives took a helicopter tour of the construction, which began last month. Robert Keough, a spokesman for state Secretary of Environmental Affairs Ian Bowles, said having the facility offshore reduces safety concerns posed by putting terminals near populated areas, such as the existing natural gas facility in Everett.

Juliette Kayyem, an undersecretary for homeland security for the state, said the Coast Guard will monitor the area around the buoys once they are completed.

The pipeline from the buoy to the existing HubLine pipe, which runs under the ocean floor from Salem to Quincy, is being installed about a mile per day, Bryngleson said, and it is expected that it will be buried by the third week of July. Overall, the project is on time and expects its first delivery around Dec. 1.

"Barring any weather delays we should be finished in October," he said. "But we have about six weeks of buffer there for weather."

The fishing industry's main concern about having the LNG terminals is their location in a stretch of ocean called Block 125. An 800-yard security perimeter around the ports and LNG tankers will keep fishermen out of the fertile area and force them to steam longer and farther out to sea, increasing their risks. Under current regulations, fishermen have a limited number of days they can be at sea.

Those concerns led to the mitigation offering to the Gloucester fishing industry. Other mitigation money goes toward environmental concerns, particularly worries about the massive tankers striking the endangered Atlantic right whales that live in the area.

Bryngleson said the company has agreed to stay in the Boston shipping lane, which runs to Boston Harbor, as much as possible and exit the lane when close to the buoy and steam only at 3 to 4 knots at that point.

Suez Energy North America, which is building a similar terminal about 7 miles southeast of Gloucester, agreed to pay $23.5 million in mitigation as well, with another $6.3 million to the Gloucester Fishing Community Preservation Fund. That package has not yet been paid.

Suez plans to have its facility operational by the end of 2009.

Where the money is going

When he issued environmental certificates for both LNG projects in December, then-Secretary of Environmental Affairs Robert Golledge Jr. attached a $47 million mitigation package - divided equally between the two companies - that includes some of the following beneficiaries:

* $12.6 million to the Gloucester Fishing Community Preservation Fund, which will buy and lease permits of Gloucester fishermen who decide to go out of business.

* $10.6 million for improvements to the islands in Boston Harbor.

* $6.5 million to build a passive acoustic buoy system to detect and monitor whales.

* $3.4 million to compensate commercial lobstermen.

* $3 million to map and study the activities and habitats of the sea floor.

* $150,000 to the Gloucester Marine Heritage Center.

* $150,000 to the Peabody Essex Museum in Salem.

* $150,000 to the Essex National Heritage Center.