Port remains closed to natural gas tankers

By JOHN McELHENNY The Associated Press 10/8/01 5:13 PM

BOSTON (AP) -- As temperatures fell sharply and thermostats clicked on across New England, the Northeast's only port for liquefied natural gas remained closed Monday, after the Coast Guard began turning away tankers because of terrorist-related security concerns.

Liquefied natural gas provides 15 to 20 percent of the gas that heats homes and businesses across New England, and there is concern that any interruption in the supply could raise heating rates.

"Any time you take 20 percent out of the market, there'll be an impact," said Rick Grant, president of Distrigas of Massachusetts, operator of an LNG port in Everett, a Boston suburb, which is the only such facility between Canada and Cove Point, Md.

On Sept. 26, the Coast Guard denied entry to a tanker carrying liquefied natural gas because of concerns after the Sept. 11 terrorist attacks.

The Coast Guard and state officials are now trying to come up with a plan to handle vessels with potentially dangerous cargoes. No LNG tankers have been allowed in since before Sept. 26.

Normally, Distrigas gets about one tanker per week carrying enough super-cooled, compressed gas to serve 30,000 residential customers for a year.

Experts from the Department of Energy came to Boston last week to work on new safety procedures for LNG tankers but nothing has been finalized, a Coast Guard spokeswoman said Monday.

Tom Kiley, president of the New England Gas Association, with 2.2 million customers, said some companies were already bracing for a winter without LNG, given the uncertainty surrounding the Everett facility.

That, in turn, would force some companies to use propane, which is more expensive than gas, and would force some electricity-generating power plants to burn oil, which pollutes more than gas.

Grant, of Distrigas, said, "You have a domino effect if one commodity in the region is affected."

Last winter, unseasonably cold weather pushed up demand for natural gas and sent prices sharply upward, boosting monthly bills for heating gas but also for electricity. Natural gas is used to generate electricity.

Acting Gov. Jane Swift is concerned that the LNG blockade in Boston Harbor could affect the price of heating gas, a spokesman said, just as demand is increasing.

"We're well aware of the potential for increased heating costs if LNG tankers are not able to unload their cargo," said James Borghesani, Swift's spokesman.

There are currently only three operating liquefied natural gas facilities in the U.S.: in Everett, Lake Charles, La., and Elba Island, Ga. Another facility at Cove Point, Md. is expected to open next year.

The tanker that was denied entry to Everett on Sept. 26 changed course and unloaded safely at Elba Island, Grant said.

Liquefied natural gas, or LNG, can be highly flammable. It is traditionally used for supplemental supplies, particularly during periods of peak winter demand.

The gas is stored in liquid form at 260 degrees below zero in the tankers and land-based storage tanks that act as giant Thermos containers, Grant said. When in liquid form, the gas takes up 1/600th as much space as when it is in vapor form.

New England is more reliant on LNG than other parts of the country because it is so far away from the Gulf of Mexico, where most U.S. natural gas originates. Most of the LNG is shipped from Trinidad and Tobago.

The National Weather Service predicted freeze warnings and near-record cold temperatures in some parts of Massachusetts on Monday night, with lows expected in the low 20s in western and central Massachusetts. Temperatures were expected to rise later in the week.

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-- Martin Thompson (mthom1927@aol.com), October 08, 2001