SOUTH PORTLAND — NGL Energy Partners announced Thursday that it has withdrawn plans to develop a liquefied petroleum gas distribution terminal at Rigby Yard and will seek an alternative location in a “welcoming, business-friendly community in Maine.”

NGL notified city officials after trying for more than a year to address some residents’ concerns about the potential for a life-threatening explosion at the propane depot proposed for the site off Route 1 near Cash Corner.

NGL made a “good-faith effort … to address all legitimate safety concerns and to comply with the city’s existing and prospective regulations,” Kevin Fitzgerald, NGL’s regional operations manager, said in a news release. “It has become apparent that some in city government are determined to oppose the project by any means possible and under any circumstances.”

NGL executives are considering several sites in southern Maine that have railroad access and have received positive responses to initial inquiries, a company spokesman said. He declined to say where the sites are located.

The city has rejected two proposals from NGL since it first applied to build a $3 million propane depot at the rail yard. Now the City Council is considering proposed fire code changes that could make it difficult, if not impossible, to develop a propane facility anywhere in South Portland. The council is expected to review an amended fire code proposal Monday.

RESIDENTS’ SAFETY THE KEY ISSUE

NGL had submitted a third depot proposal Jan. 28 that would have reduced the depot’s potential fuel capacity by nearly half. Three weeks earlier, the city’s code enforcement director rejected the second proposal, saying it didn’t comply with existing zoning ordinances that limit new fuel storage facilities to 10,000 cubic feet or 74,805 gallons of liquid propane.

NGL is a Tulsa, Oklahoma, company that includes Brunswick-based Downeast Energy. It operates a propane distribution depot on a leased site on Commercial Street in Portland, which it must leave to make way for the planned expansion of the International Marine Terminal.

“NGL is committed to providing a safe, reliable propane supply to over 50,000 homes and businesses in the region,” Fitzgerald said in the release. “In order to serve existing and new customers, we will increase our supplies at other regional terminals, including a site in Auburn, for the short term while exploring the development of a new facility at an alternate location in Maine.”

Opponents of NGL’s plans in South Portland said it would pose a public safety threat to commercial and residential properties near the 245-acre rail yard, which is between the Thornton Heights and Cash Corner neighborhoods. Local fire officials vouched for the safety of the project, noting that as many as 100 rail cars loaded with propane pass through Rigby Yard daily with little local security or oversight.

Councilor Brad Fox, who led opposition to the project, said he was “feeling pretty good” Thursday after hearing that NGL had dropped its plans.

“I’m happy it worked out for the people in the neighborhood,” Fox said. “Our residents winning over a billion-dollar corporation isn’t too bad for a year’s work. (The propane depot) should be in a safer location and not make a neighborhood less safe.”

LOOKING FOR WELCOMING COMMUNITY

Councilor Claude Morgan wasn’t celebrating Thursday. He said the city has suffered a setback with NGL’s decision to look elsewhere because it sends a message to others that South Portland has an unstable project review process, including a failed effort to pass a six-month moratorium on propane facilities.

“This is not a banner day for the city of South Portland,” Morgan said. “The council treated this company and this project very shabbily. The city kept moving the goalposts and blocked wherever it could and tried to (reinvent) a new process – all to block a specific project.”

In NGL’s news release, Fitzgerald said company executives “are confident that another Maine community will value the jobs, financial investment, tax revenues and energy security our terminal will provide.”

Fox and others have disputed the depot’s direct economic benefits to the city, noting that it would transfer a handful of jobs from Portland to South Portland. Moreover, they have said that tax revenue generated by the depot – $52,200 per year on a $3 million facility – wouldn’t offset its demand for public safety oversight and other public services, including an additional 40 to 50 propane delivery trucks on the city’s roads each day.