It appears internal problems caused a fledgling LNG company to fall apart, but no one has said what precipitated the breakup of Calais LNG near the Maine-New Brunswick border.

Rep. Ian Emery, R-Cutler, and former Passamaquoddy tribal state Rep. Fred Moore started BP Consulting two years ago, later changing its name to Calais LNG.

The business plan called for a $500 million facility to be built on a 300-acre site in Red Beach between Devil's Head Park and St. Croix Island, near Route 1. Red Beach is a village within Calais. A pier was to be built in the St. Croix River, across from the Canadian shipping port at Bayside, New Brunswick. The gas would be piped along the pier to two storage tanks on shore.

Moore and Emery sought and received the backing of the Indian Township tribal government and for a time it appeared they would be a rival developer to two other plans - the Oklahoma-based Quoddy Bay LNG, which hopes to build a facility at the Passamaquoddy's sister reservation at Pleasant Point near Eastport, and the Washington D.C.- based Downeast LNG, that wants to build a facility in Robbinston

Then, everything started to come apart.

Last month, Emery announced he had reconfigured the company with the help of a Texas-based company called Northeast Energy Development LLC. Art Gelber of Gelber and Associates a nationally recognized energy consultant specializing in energy trading practices and protocols, joined with Emery.

Although the company put forward a new face, for months now there have been nagging questions about what happened to the original company. Also at issue - who put up the money for the option on the 300-acre site.

On Wednesday, Calais businessman William Barnett answered a part of the question. "We were a company called Downeast Property Development, a private corporation involved in funding the land options for Calais LNG," Barnett said. "We later made a decision to no longer pursue that project and have no further involvement in the project." Barnett did not elaborate, but it is known that the company consisted of several area businessmen.

Contacted Wednesday, Emery declined to comment on the breakup. "First off what are they saying? I'm not sure what the point of this is other than to put something out in the media," he said.

Asked if the Calais businessmen have been compensated for their loss, Emery declined to comment.

Although Emery had little to say, his former partner Fred Moore did offer some insight into what had happened. He confirmed that he and Emery had held the option on the land, but that Downeast Property Development had put up the money.

Although he declined to elaborate on why the company unraveled, Moore did say he walked away from it last year. "I withdrew from the project back in August," he said. "According to the terms of my withdrawal agreement I am prohibited from making any statements disparaging my former business partner," he said.

But Moore did say he developed the concept of Calais LNG in an effort to benefit the Passamaquoddy Tribe. "When it was determined that the tribe no longer would be participating in the project, I no longer saw a role for myself in it," he said. "It became increasingly clear that the tribe was going to have difficulty in negotiating successfully with members of the company and as a result of that difficulty the tribe chose not to expend resources toward that effort."

At issue are the terms of the agreement with the tribe. Moore did not elaborate except to say, "I didn't see the project heading in the direction that it originally was intended to go in, so I withdrew."

Weeks later, Moore was hired by Quoddy Bay LNG. That company plans to build a LNG facility at Pleasant Point with a tank farm in neighboring Perry.

Moore said his only regret was that a lot of time and energy was spent on the project. "I also believe that while Calais LNG didn't go forward as originally configured, I at the same time am happy to see the tribe taking steps to get behind one project." Moore was referring to the Quoddy Bay LNG project.

Right now Pleasant Point, which is working closely with Quoddy Bay LNG, has agreed to share its payments from the company with its sister community at Indian Township. If Indian Township voters approve a measure to enter into a tax agreement with Quoddy Bay, then Pleasant Point will split its payment 60-40 with Indian Township.

Emery said he would not comment on why the tribe decided to drop the project. He also declined to talk about the breakup. "I think Fred explained it clearly. Both sides signed a mutual agreement that we would not discuss any of the circumstances that led to his departure," he said.

Although Emery had little to say on Wednesday, he did comment on the breakup during an interview with the Bangor Daily News last month. "Although our intentions were certainly genuine and [we did] the best that we could with the original group, things got really complicated," he said.

Indian Township tribal Councilor Elizabeth Neptune, who served as the point person for many of the meetings last year, did not return a telephone call Wednesday.

Calais City Manager Linda Pagels said she didn't know anything about the breakup.

(C) 2007 Bangor Daily News Bangor, ME. via ProQuest Information and Learning Company; All Rights Reserved

Related Project
Calais LNG
Facility Type: LNG Owner: Calais LNG Project Co., LLC
Scope: New Construction Location: Calais, ME United States