Ten miles off the coast of Gloucester, staging began Wednesday for the construction of a $6 million liquefied natural gas terminal that backers say will diversify the local economy and distribute millions in mitigation funding to the fishing industry and beyond.
It will also give the global LNG commodities market a second local intake terminal serving the energy-hungry New England states with an alternative to oil, according to Elliot Jacobson, director Action Energy in Gloucester.
Carrying the 170 workers of Caldive, the global sea drilling company from Quincy, the live-on construction barge Lone Star Horizon is now in position for the project. It was towed out Tuesday night for Suez Energy North America, according to company spokeswoman Carol Churchill.
The site of the terminal -- named Neptune -- was challenged by the fishing community, which objected to the loss of fruitful waters to the energy industry, but then-Gov. Mitt Romney authorized the LNG terminal on the site in December 2006. He also approved a second terminal site to the south that has been built and began receiving the tankers last month.
The Neptune site will consist of a buoy system at which the LNG vessels will moor and discharge natural gas by using onboard vaporization equipment, according to Suez Energy. The natural gas will be transported via a 13-mile pipeline connecting to the existing pipelines through Salem.
Churchill said the piping would be laid this summer. Work on the pipeline connection and the buoy installation is scheduled for next spring and summer. The first shipments could be arriving by late 2009.
Churchill said the system was designed to receive 400 million cubic feet of natural gas a day. Tankers can carry about 3 billion cubic feet of natural gas, she said.
The beginning of construction triggers the transfer of $23.5 million in mitigation payments, including $6.3 million to the Gloucester Fishing Community Preservation Fund. The same amount was given to the fund by Excelerate Energy, which built its similar terminal a bit to the south.
With the first grant, the fund -- organized and directed by Vito Giacalone -- began acquiring federal groundfish permits for a bank designed to store and sell fishing capacity during the regulated fluctuations in days at sea.
A fisherman, businessman and representative of the fishing community at the regulatory and research hearings, Giacalone said the second infusion of mitigation funding will not be spent immediately. He described the "bank" as essential to preserving Gloucester's place as the hub port for the Gulf of Maine and offshore banks.
"We developed the permit bank to preserve capacity in the port," he said. "We'll continue to add to the permit bank but there's no urgency."
Suez North America has leased space at Cruiseport and will use Gloucester as its home port, according to Churchill. Cruiseport founder-director Frank Elliott said the LNG decision to base operations here will mean sales in commodities -- food to parts -- to restock the tankers and provide for the needs of the crews, which will come ashore from time to time.
"It's a huge, huge economic benefit to the city of Gloucester," he said.
Also receiving mitigation funding is the Massachusetts Lobstermen's Association, which is slated for $1.7 million; the Island Alliance, $5.6 million; the Gulf of Main Ocean Observing System, $600,000; the state office of fishing and boating access, $350,000; the Peabody Essex Museum, $150,000; and the New England Aquarium, $750,000.
Also receiving mitigation funding is the state Office of Coastal Zone Management, $1.5 million; the Provincetown Center for Coastal Studies, $1 million, the state Division of Marine Fisheries, $1.4 million; the state's Right Whale Conservation Program, $750,000; and the National Oceanic and Atmospheric Administration, $3.25 million.
Copyright (c) 2008, Gloucester Daily Times, Mass. Distributed by McClatchy-Tribune Information Services.