Oil, Gas Utility & Midstream - Operations and Strategy
| Hess LNG buys Crown Landing from BP, views Delaware River site as attractive |  |
November 03, 2009 5:46 PM ET
By Bryan McBournie
|  Related Companies | Related Documents | Related Articles |
An affiliate of Hess LNG has purchased Crown Landing LLC from BP America Production Co. for an undisclosed amount, the company said Nov. 3. Hess LNG, an affiliate of Hess Corp., sees the proposed Crown Landing LNG terminal in New Jersey — and LNG in the United States in general — as a long-term opportunity and a strategic investment, company President and CEO Gordon Shearer told SNL Energy. "I think BP wanted to sell and we were interested in buying, so it was a meeting of the minds," Shearer said. BP spokesman Tom Mueller said LNG is no longer part of the company's plans in the United States. He said operating an LNG terminal was eliminated from BP's "strategy shift" that has taken place over the past few years. BP America Production is a subsidiary of BP plc. Shearer said there is no timeline on the project at the moment. He said the proposed location of the project on the Delaware River, which separates New Jersey and Delaware, is still a very attractive location. "Basically, the project has been thoroughly quiet and there's not a lot that has been done on it in the past 12 months," he said. At the time of the transaction, BP had been evaluating alternatives to address roadblocks the project had hit so far. Shearer said Hess will take several months to assess all of the information it has been given, as well as talk to local leaders, communities and regulatory bodies to find out where the project should go from here. Hess views Crown Landing as a long-term investment, he said. As proposed by BP, Crown Landing would have a 2,000-foot pier extending out from the facility, which would have a regasification capacity of 1.2 Bcf/d. The project ran into a major roadblock in 2008 when the U.S. Supreme Court ruled that Delaware had the right to reject a proposed terminal to be partially built in its waters. The case involved a border dispute between New Jersey and Delaware over which state has jurisdiction over the pier where LNG tankers would dock at the proposed Crown Landing site. Delaware cited a 1905 compact between the two states that gave it ownership of the subaquatic lands in the river up to the low-water mark on New Jersey's side of the river. The states have had leeway in building piers and wharfs that do not interfere with navigation, New Jersey argued. The Supreme Court sided with Delaware in its decision in March 2008. The 6-2 decision upheld the 1905 compact, which gave Delaware control over the river. Justice Ruth Bader Ginsberg wrote in the majority that Delaware acted within its rights when it refused to allow the terminal to be built. The court said that while Delaware did not have the ability to impede normal uses of piers and wharfs extending from New Jersey's shore, an LNG terminal did not fit the definition of normal use. At the time, BP said the court's decision would not stop it from continuing plans for the Crown Landing terminal. The company said in April 2008 that the project was important for the energy future of the U.S. Northeast and that it would examine other alternatives to get the terminal to comply with the law. Delaware also challenged a conditional approval issued by FERC for the project, which ended when a federal appeals court dismissed a petition filed by the state. The court said Delaware did not have standing in the proceeding and that its approval was not needed in FERC's decision. Hess LNG also is a partner in Weaver's Cove Energy LLC's proposed LNG terminal in Massachusetts. The Weaver's Cove project, proposed by Hess and Poten & Partners, received FERC approval in 2005. However, in an attempt to quell concerns about the terminal, the company subsequently proposed an offshore LNG tanker berth as an alternative to the company's original site in Fall River, Mass. The berth would be located in Mount Hope Bay. | 
Add to Library