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Second try for LNG venture by Crystal parent Potential Alaska gas buyer’s parent company holds an unused 2001 permit to import LNG from Canada or overseas Larry Persily Petroleum News Government Affairs Editor
Crystal Energy LLC, the Alaska Gasline Port Authority’s hopeful partner in bringing liquefied natural gas to Southern California, has applied for state and federal permits for an offshore receiving terminal, though it’s several months behind a competitor in the same waters.
The venture’s parent company also tried getting into the gas business more than two years ago when it received federal permission to import LNG at an existing East Coast or Gulf Coast terminal, but never followed through on its Department of Energy authorization.
Crystal Energy’s sole endeavor is to develop an LNG receiving terminal off the California coast and broker purchase and sales deals. The company last month filed its project applications with the U.S. Coast Guard and California State Lands Commission, said company spokeswoman Lisa Palmer.
The company, wholly owned by Small Ventures USA LLC, a Houston-based privately held firm, has agreed to negotiate a possible LNG purchase with the Alaska Gasline Port Authority. The 5-year-old port authority wants to build a North Slope pipeline to feed gas to an LNG shipping terminal at Valdez if it can find financing and convince North Slope producers to sell gas to the municipally owned venture. Parent company holds import permit Small Ventures received federal permission in October 20001 to import 80 billion cubic feet of gas from Canada or overseas suppliers over a two-year period but has never reported any activity to authorities, said Drew Malcomb of the Department of Energy in Washington, D.C. “They have imported no LNG.”
Small Ventures is owned by William Perkins III, who founded the company in 1997 after working at energy trading companies. Perkins and his wife recently had a child, so he is not available for comment, Palmer said.
The Coast Guard will be the lead agency for Crystal Energy’s environmental impact statement. Assuming the federal agency determines the application is complete, it could begin its scoping hearings this summer, Palmer said.
The Australian mining, oil and gas company, BHP Billiton, also is working toward building and operating an offshore LNG receiving terminal in the same area north of Los Angeles. BHP submitted its applications more than five months ahead of Crystal Energy, with Coast Guard scoping hearings starting this month.
Crystal Energy wants to convert a 25-year-old former Chevron production platform into an LNG terminal 11 miles offshore of Oxnard, in the Santa Barbara Channel, about 50 miles up the coast from Los Angeles. The project is estimated at $300 million for the platform conversion, tanker dock, regasification facilities and pipelines to shore. The company says it could handle an average 1 billion cubic feet per day of gas. Competing project farther offshore BHP is looking at a site farther from shore, 21 miles from Port Hueneme in front of Oxnard. The floating plant would include tanker berthing facilities, regasification and storage operations, connected by an undersea 30-inch pipe to the mainland. The storage tanks, aboard a hull tethered to the ocean floor, would hold 6 billion cubic feet of gas.
BHP calls its project Cabrillo Deepwater Port, with an in-service date of 2008. The project is estimated at about $500 million, with gas flow expected at 800 million cubic feet per day. The company has its own gas supplies from Australian fields.
Crystal Energy, though later to start the permitting process, has said it could start accepting LNG tankers in 2007. It could take several years longer, however, for the Alaska Gasline Port Authority to build its project and start deliveries, and the company says it is looking for other suppliers to fill the gap and supplement the Alaska supply.
The port authority, comprised of the North Slope Borough, Fairbanks North Star Borough and city of Valdez, says it needs to move 2 bcf per day of LNG to make its project economic, and is talking with possible customers in addition to Crystal Energy. Long list of potential LNG projects The BHP and Crystal Energy proposals are among seven projects proposed by different developers for supplying LNG to the U.S. West Coast, either from new receiving terminals in Southern California or just past the border on Mexico’s Baja Peninsula. None have started construction, though several are into the permitting process.
Opponents of the BHP and Crystal Energy projects cite safety and environmental concerns, similar to challenges raised to most other proposed LNG terminals on the U.S. West, East and Gulf of Mexico coasts.
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