The sole financial backer of a $1 billion liquefied natural gas terminal proposed in Calais is pulling out of the project.

Ed Canaday, a spokesman for the global investment bank Goldman Sachs and its subsidiary, GS Power Holdings LLC, said Thursday that the firm will have no comment on the decision.

Calais LNG told state regulators Wednesday that if Goldman Sachs can’t sell its ownership interest by Aug. 11, all permit applications will be withdrawn.

The loss of Goldman Sachs is the latest setback to efforts to build an LNG terminal in eastern Maine, an energy project that many officials and industry leaders insist is crucial to the state’s economic health.

Environmental groups and other opponents of the project see it as vindication of their view that an LNG terminal isn’t needed in eastern Maine.

A week ago, Calais LNG startled the Maine Board of Environmental Protection with a last-minute request to postpone a long-scheduled hearing on its permit application. The board agreed reluctantly. It planned to meet today with lawyers in the case and reschedule the hearing.

But late Wednesday, Calais LNG made another surprise request, asking the board to cancel today’s meeting. Shortly after noon Thursday, Susan Lessard, the board’s chairwoman, agreed. She set up a conference call with the parties today to try to determine the project’s status, said Cynthia Bertocci, the board’s executive analyst.

Representatives of Calais LNG didn’t respond to calls and e-mails from The Portland Press Herald seeking comment.

Calais LNG wants to build a gas delivery terminal on 330 acres along the St. Croix River, seven miles south of downtown Calais. The project would have a 1,000-foot pier, two or three storage tanks and 20 miles of underground pipe connecting to the Maritimes & Northeast Pipeline. The terminal would have the capacity to move 1 billion cubic feet of gas daily, and be served on average by one or two tankers a week.

Supporters say an LNG terminal would give Maine a locally stored supply of natural gas, which would help lower energy costs, create jobs and encourage paper mills to switch from oil.

Critics, arguing against a terminal in the area, cite effects on coastal wetlands and fishermen, and potential hazards of large LNG tankers navigating Passamaquoddy Bay and the St. Croix River.

New natural gas sources elsewhere, such as shale gas deposits in Texas and the Northeast, further reduce the need for a terminal in Maine, they say. They see the departure of Goldman Sachs as a strong indicator that the numbers no longer add up.

“Their departure is clear evidence that the market doesn’t agree that any need exists,” said Sean Mahoney, vice president of the Conservation Law Foundation.

Another critic said the combination of poor economics, an inappropriate site and the effects on fishing and tourism are combining to doom the project.

“The fact that Goldman Sachs has pulled out is a reflection of the project’s lack of value,” said Ronald Shems, a lawyer representing Save Passamaquoddy Bay and American Indians who oppose the project.

To justify its request to delay the permit hearing, Calais LNG told the board last week that it was unable to gather key information such as soils test data and impacts on fisheries. Mahoney and Shems question whether that was the problem, or whether the pending loss of Goldman Sachs played a role.

“Calais LNG is manipulating the process,” Shems said. “The real story seems to be coming out in dribs and drabs, and we are yet to hear the real story of the serious and larger problems that Calais LNG is facing.”

A lawyer representing Calais LNG, David Van Slyke, didn’t return phone calls and e-mail Thursday asking if the developers were aware last week of Goldman Sachs’ pending pullout, and whether that had any bearing on their actions.

Three companies have tried in recent years to build an LNG receiving terminal in Passamaquoddy Bay.

One of them, Quoddy LNG, has withdrawn its applications for a project at Pleasant Point. If Calais LNG gives up, it will leave only Downeast LNG, which wants to build its project nearby in Robbinston, at the mouth of the St. Croix River.

Downeast continues to have the financial backing it needs, said Dean Girdis, the company’s president. The sole investor is Kestrel Energy Partners LLC, a private equity investment firm in New York.

Kestrel has spent more than $15 million and expects to invest another $2 million, Girdis estimated, to secure the necessary state and federal permits. Downeast has been granted a draft environmental permit from federal regulators and is preparing to resubmit state permit applications within the next few weeks.

Girdis downplayed the significance of Goldman Sachs’ exit. GS Power Holdings invests in power plants, he said, but is a minor player in LNG. It has spent roughly $24 million on the project, according to Calais LNG. Girdis said that by his estimates, the project could need another $10 million or so to pursue approvals.

“Maybe they spent more money than they expected to,” he said.

Girdis dismissed opponents who say Calais LNG’s troubles are evidence that a sudden glut of domestic natural gas has killed the market for LNG in New England. There’s not enough pipeline capacity for new gas supplies in the Northeast to reach New England, he said. Recent LNG projects in Massachusetts and New Brunswick won’t satisfy demand after 2025, he said.

“If I agreed with them,” Girdis said of LNG opponents, “we wouldn’t be doing what we’re doing.”

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

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