Two days before a showdown with state regulators, the company that wanted to build a $1 billion liquefied natural gas terminal in Calais is putting the project on hold.
In a letter today to the Maine Board of Environmental Protection, Calais LNG said it was withdrawing its permit applications. It blamed “the meltdown of the financial markets,” for the action.
“It is our firm belief that, but for the extreme turbulence of the capital markets,” Maine would be well on its way toward having an LNG facility in Washington County…” wrote Harold Ian Emery, one of the developers.
The announcement comes as the board was preparing to consider a recommendation from its chairwoman that the permit application be returned to the company. The chairwoman, Susan Lessard, had granted three extensions to Calais LNG since July, when the company asked to postpone a long-awaited public hearing on its permit. In the interim, the company has sought to resolve financial and technical issues, including the loss of a key investor and title to the project property on the St. Croix River.
Today’s announcement was a blow to business interests trying to bring an LNG terminal to Maine. They say it would help lower energy costs for paper mills and other industries.
“This is an unfortunate development,” said Tony Buxton, a lawyer who represents several large industrial customers and also had been active in promoting Calais LNG.
Buxton expressed hope that the project could be revived when the financial markets are stronger and natural gas prices rebound.
“It’s difficult to get any energy project financed today,” he said.
Calais LNG was one of three import terminal proposals looking to locate in Passamaquoddy Bay, on the Maine-New Brunswick border. The first application was from Quoddy Bay LNG for a terminal at Pleasant Point. That application was dismissed by the Federal Energy Regulatory Commission.
The other, Downeast LNG, continues to make progress pursuing a federal environmental permit for a terminal in Robbinston. Downeast completed a hearing with the BEP three years ago. But after its pipeline route was rejected, the developer withdrew the BEP application. It’s planning a resubmittal next year, after the federal review is complete.
Calais LNG had proposed a gas delivery terminal on 330 acres along the St. Croix River, seven miles south of downtown Calais. The project featured a 1,000-foot pier, two or three storage tanks and 20 miles of underground pipe connecting 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.
Opponents to LNG in the bay say new gas sources elsewhere reduce the need for a terminal in Maine. They also have raised concerns about the impacts to coastal wetlands and fishermen, and potential hazards of large LNG tankers navigating Passamaquoddy Bay and the St. Croix River.
Tankers also must pass through New Brunswick to reach the terminal. The Canadian government has said repeatedly that it won’t allow ships carrying LNG to transit its waters, a dispute that remains unresolved.
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