Gulf LNG breaks ground on Mississippi LNG terminal

Gulf LNG Energy breaks ground on a liquefied natural gas terminal southeast of Pascagoula that is estimated to be complete in 2012 with supply contracts in place that will keep it busy for 20 years.
The $ 1.2 bn terminal will accommodate one tanker at a time from Africa and Italy hauling natural gas cooled to -260 degrees Fahrenheit and compressed. The terminal will be built to store, warm and pipe the LNG to destinations in the United States.

Officials with Gulf LNG hailed natural gas as a clean energy source and a "bridge to the alternative fuels" that are coming for this country; projected consumption would increase 40 % in the next two decades.
The liquefied natural gas coming to Pascagoula will have an added world environmental benefit, said John McCutchen, chief operations officer for the terminal. In Angola, like other areas of Africa, it is a by-product of oil drilling.
"When you take oil out of the ground, a lot of natural gas comes with it, co-mingled," McCutchen said. "Thesupply coming from Angola LNG is basically this, gas associated with withdrawing oil." Instead of burning off this gas, "it's now being recovered and converted to LNG and transported," McCutchen said.

The terminal will have a 27-foot-high, 3-foot-thick protective wall, revised to be taller after Katrina changed the model. A typical terminal wall is eight feet of chain link with barbed wire.
The nearest populated area is 1.7 miles. Access to the terminal will be more than a mile off the beaten path. The US Coast Guard will have a major role in security at the terminal. State and federal agencies will regulate safety.

The project will have two 160,000-cm storage tanks, with a combined capacity of 6.6 bn cf, and 5 miles of pipeline connecting the terminal to the Gulfstream, Destin, Florida, Gas Transmission and Transco pipelines. It will handle 150 tankers a year at a turn-around time of 24 hours.
El Paso, a major North American independent natural gas producer which owns half-interest in the Gulf LNG project, also owns one of the four operating land-based LNG regasification terminals in the US, at Elba Island near Savannah, Georgia. El Paso moves one-third of the natural gas in the United States and has a $ 8 bn backlog of pipeline projects.

The Crest Group, held by Houston investors, owns 30 % of the project, and Sonangol USA owns 20 %. Sonangol is the state-owned national oil company of Angola.
Bill Baerg, with El Paso, said having an LNG terminal in Mississippi will benefit the region and the state, though it won't affect the price of natural gas for consumers in the area. He said Mississippi consumes 1 bn cf of gas a day. The terminal can store 6.6 bn cf. What the terminal is designed to handle could serve the state for a week if there was ever a need for that.

"It's amazing the resource it will bring and the state of Mississippi can benefit from that," Baerg said.
The business is in a period of economic growth, Baerg said, and expects 1 to 2 % growth a year. And according to the company, the "project will help establish Mississippi as a key player in the US energy market."