KeySpan Still Fighting for LNG Site

By Jon Chesto; JON CHESTO

The Patriot Ledger

PROVIDENCE – KeySpan Corp. has rejoined the race to open New England’s next liquefied natural gas terminal.

The company appealed the Federal Energy Regulatory Commission’s denial of the project to the U.S. Court of Appeals in Washington on Friday, a spokeswoman said. KeySpan had planned $100 million in renovations to a natural gas storage site it operates on the Providence River so it could accept LNG tankers there. KeySpan would partner with British energy company BG Group, which would operate the ships. Liquefied natural gas is currently delivered by trucks.

The FERC voted against KeySpan’s plan last summer, and recently refused to reconsider that vote. Meanwhile, the regulators approved a controversial LNG terminal proposed for a site 20 miles away in Fall River, Mass.

Several energy companies are competing over which can build the next LNG shipping terminal for the New England market. The Distrigas terminal, which opened in Everett in the 1970s, is the region’s only LNG shipping terminal. KeySpan’s LNG plan would be less expensive than others proposed for Fall River, the Boston Harbor and Maine, as well as offshore proposals south of Gloucester and in Long Island Sound.

The Providence project – like other LNG proposals – has run into resistance from political leaders and environmentalists.

Although the terminal would be in an industrial area, the Conservation Law Foundation is concerned about its proximity to residential neighborhoods, said Christopher D’Ovidio, a staff attorney with the group. He said his organization will continue to fight the project, partly because an accident or terrorist attack could be potentially devastating. Federal regulators expressed concern that KeySpan’s property in the Fields Point section of Providence might not be large enough to include a safety zone around the storage terminal. The Providence Journal reported that National Grid has unveiled plans to buy both KeySpan and New England Gas, which has a site that surrounds the KeySpan tank, potentially solving that problem. But regulators also expressed concern that the storage tank doesn’t meet certain modern safety standards, D’Ovidio said.

Jon Chesto may be reached at jchesto@ledger.com.