Americans squabble, Mexicans move on LNG

Seeking to fill the gap between supply and demand in California's natural gas markets, would-be receiving terminals are getting various welcomes in the U.S. and Mexico. North of the Border, squabbles between the State and Federal government are threatening the future of Mitsubishi's Long Beach project:

The lead attorney for California's energy regulatory agency on Wednesday denounced federal regulators for seeking sole power to place liquefied natural gas terminals nationwide, including Long Beach.

Last week, the Federal Energy Regulatory Commission asked members of the Senate energy committee to change language in the 67-year-old Natural Gas Act so that the federal commission had ultimate power in deciding where and whether LNG terminals are built.

"It's a pretty extreme position FERC is taking, but it's a pretty extreme FERC," said Harvey Morris, principal counsel for the California Public Utilities Commission. "FERC's move for exclusive jurisdiction is a threat throughout the state."

The state utilities commission is fighting FERC in federal court over who has the power to determine if a proposed LNG terminal in the Port of Long Beach is safe enough to be built. The Long Beach project is one of a handful of proposed LNG terminals statewide that could be affected by the court case.

Meanwhile, in Mexico, a new entrant in the California/Baja California LNG picture is raising eyebrows:

An intriguing new player has entered the fierce competition to supply liquefied natural gas to Baja California and Southern California. A private Baja California company has teamed with Moss Maritime, a global leader in the design and engineering of LNG tankers, to build a $55 million floating LNG project about 5 miles off the coast of Rosarito Beach. The partners plan to convert an LNG vessel into a floating storage and regasification unit -- known in energy circles as an FSRU -- that would supply LNG to the cross-border region.

"We believe an FSRU is the best way to receive, store, regasify and transport the gas, which will be delivered to shore," said Lucy Ocaña, public relations director for the Mexican partner, Terminales y Almacenes Maritimos de Mexico S.A. de C.V., known as TAMMSA.

"This concept has less impact on the environment compared to shore-based and gravity-based platforms," she said.

TAMMSA and Moss applied in mid-January for a federal environmental permit to develop the project.

Projects in Mexico have gone through less rigorous environmental approvals than those north of the border, thereby giving them a leg up in the race to build LNG facilities off the coast.