"We have been looking at the global market conditions surrounding LNG, and the timing just isn't right," says BP external affairs director Tom Mueller, in a statement. "So we have put the project on hold for at least two years. We will hold onto the property and look at conditions down the road. The company believes New Jersey will need LNG infrastructure in the future, and we will position ourselves to provide that.
"The decision…is really based on the likelihood of LNG cargos actually coming to the US," Mueller says. "With higher prices in Asia and elsewhere for natural gas, it is very unlikely enough LNG cargoes are going to be coming to the US to justify a new terminal in New Jersey for the foreseeable future."
The project was initially revealed in 2002, and detailed plans were rolled out in late 2003 for a 2008 delivery of a terminal encompassing a trio of storage tanks, conversion equipment, connections to an existing pipeline system and a mile-long pier for ships carrying LNG. The latter component became a major sticking point that has had the project in the courts for years.
Under an agreement that dates to the earliest days of the US, the border between New Jersey and Delaware for a 29-mile stretch is, effectively, the New Jersey shoreline at low tide. And a century-old compact between the two states gave Delaware regulatory rights over projects extending beyond that boundary.
So while the State of New Jersey approved the on-site terminal facilities, Delaware officials would not approve the pier portion of it, citing safety concerns. The US Supreme Court subsequently ruled earlier this year that Delaware has veto power over projects that extend into the river.
For the facility to move forward in any case, the London-based BP, which has its US headquarters in Houston, would have to substantially redesign the project. And while on-shore work has proceeded with the support of New Jersey officials, the redesign step has been rendered moot by BP's decision to put the whole project on hold.
If the terminal is eventually completed, it's designed to store 3.5 billion cubic feet of LNG, and to handle more than 1.2 billion cubic feet per day. It would have the capacity to serve some five million homes.
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