...gas-fired units, increased demand for natural gas just as North American gas production went into decline. The clash of trends has driven the price of natural gas to more than $4 per million Btu and has kept it there for two years.

CHOICES Gravity-based structures can have single LNG tanks and be daisy-chained for expansion (left), or have multiple storage tanks (above). (Renderings courtesy of Aker Kvaerner)

Industry analysts agree that gas prices above $3 make importation of liquefied natural gas in tankers economically attractive for terminal developers. In recent years, all four existing LNG receiving terminals in the U.S. have been reactivated and in some cases expanded. At least 30 new terminals to serve the North American market also have been proposed (ENR 2/2 p. 17). But a number of the proposals have died in the face of fierce local opposition fueled by fears of fire and explosion, terrorist attack and environmental degradation.

Pushed by such fears and aided by a 2002 law, the market for LNG terminals has moved out to sea. "For tankers, it’s better to move things off over the horizon. They make a less dramatic target," says Chip Ray, global marketing vice president at Chicago Bridge & Iron, The Woodlands, Texas, which builds LNG facilities.

The Maritime Transportation Security Act of 2002 transferred regulatory jurisdiction over offshore LNG termi-nals from the Federal Energy Regulatory Commission, the permitting authority for onshore terminals, to the Dept. of Transportation, which has delegated it to the Coast Guard. "Just being offshore doesn’t mean you avoid all your environmental problems," cautions Amos Avidan, Bechtel principal vice president and petroleum and chemical technology manager. Environmental impact assessments still are required, he notes. But under the Maritime Act, the entire approval process can take as little as 356 days from application to final decision.

One of the main bottlenecks at this point is the fact that the Coast Guard must build from scratch an entire regulatory infrastructure for deepwater port permitting, say industry observers. The last such permit, for the Louisiana Offshore Oil Port, was issued in 1976.

Vying with Excelerate to be first to market, ChevronTexaco Corp. last November received the first deepwater port permit issued by the Coast Guard for its Port Pelican LNG terminal (ENR 11/24/03 p. 7). The $650-million project is based on a concrete gravity-based structure 40 miles offshore Louisiana in the Gulf of Mexico and initially will be able to process 800 million cfd of gas. A second phase could double that capacity (ENR 1/27/03 p. 16).

Houston-based Aker Kvaerner now is doing front-end engineering design (FEED) on the project and construction will start this year at Harbor Island south of Corpus Christi, says Pierre DeGruy, ChevronTexaco spokesman. Commissioning is scheduled for 2007.

Fluor Corp., Aliso Viejo, Calif., has been awarded engineering, procurement and construction management of all platform topsides, related facilities and support equipment and overall program management for Port Pelican and Terminal GNL Mar Adentro, another ChevronTexaco LNG terminal in the Pacific Ocean off Tijuana, Mexico. Aker Kvaerner also is performing FEED for it. Black & Veatch, Overland Park, Kan., is teamed with Fluor for design of cryogenic works on both projects.

Altogether, nine offshore terminals in North America and two in Italy are in various stages of development. "There’s a lot of feasibility studies going on," says Charles Tumey, oil, gas and power sales vice president for Fluor in Sugar Land, Texas, which is performing some of the studies.

But many projects will not be feasible. "It’s not unusual for an offshore terminal to cost 40% more than an onshore terminal," says Bechtel’s Avidan. Black & Veatch’s Brian Prince, vice president of LNG technology, says costs can be double.

"There’s a general opinion that only three or four [proposed terminals] will go," says Billy Cash, business development manager for J. Ray McDermott, Houston.