Port Dolphin Energy has received a three-year extension to complete its onshore facilities, two years less than it requested after changing natural gas market conditions prompted the company to re-examine its project.
The deadline of Dec. 3, 2011, has been extended by the Federal Energy Regulatory Commission (FERC) to Dec. 3, 2014, for the Houston-based company to complete the onshore part of its project at Port Manatee. The port would be the final destination of natural gas pumped through a planned 42-mile-long underwater pipeline connecting a submersible liquefied natural gas (LNG) port proposed for 28 miles off the northern tip of Anna Maria Island.
At the deepwater Port Dolphin, submerged buoys would rise to the surface to dock tankers that convert liquefied natural gas to vapor and offload it into the pipeline for distribution to Florida energy companies.
Port Dolphin, whose parent company is in Oslo, Norway, applied for permission to build the project in 2007, receiving a federal deepwater port license in 2010, a state environmental resource permit in 2011 and more than a dozen other permits ranging from air and water pollution variances and waivers to a permit allowing underwater construction noise that could disorient marine mammals and other marine life.
But since 2007, the increased availability of natural gas in the U.S. has caused the company to shift its original plan – importing LNG from foreign sources and distributing it to Florida power plants – to a variety of import/export scenarios, including importing from U.S. sources, according to documents the company filed with FERC.
"Port Dolphin is actively working to adapt the commercial design of its project to the changing natural gas market in the U.S. Due to Florida's lack of indigenous gas production and storage capabilities, the project still has substantial commercial potential together with a unique ability to meet the natural gas needs of Florida," the company's attorneys wrote in its request.
They added that the company needs "time to market its modified business plan, to align upstream and downstream participants, and to construct the authorized facilities."
Upon completion, the attorneys wrote, "Port Dolphin will be positioned to receive LNG from any source, both from U.S. producers (where gas is priced better than gas from foreign suppliers) or from any other world market in the future (if the gas pricing situation reverses again)."
The project's groundbreaking date remains uncertain as Port Dolphin still awaits approval of necessary licenses, company spokesman Harry Costello said.
Meanwhile, Port Dolphin is upholding its agreement to pay Manatee County and Longboat Key for underwater beach sand reserves that would be lost during construction of the project.
The company agreed in 2009 to reimburse up to $5.5 million each to the county and the town for locating and mining sand after municipal officials argued that the fine, white sand in the path of the port and its pipeline would be destroyed during construction.
Under the agreement among Port Dolphin, the Florida Department of Environmental Protection (DEP) and the Florida Fish and Wildlife Conservation Commission, the DEP holds $1 million in escrow for the reimbursements. Port Dolphin has not yet escrowed the remaining $10 million.
Manatee County has received $320,000 for expenses in securing approval to excavate sand in advance of the pipeline construction, drawing from the $500,000 set aside for the county, according to Charlie Hunsicker, Manatee County's Natural Resources director.
The next renourishment of Anna Maria Island beaches is not planned until at least 2014, depending on federal funding and permit approvals, he said.
Longboat Key has been paid $500,000 of the $1 million it has spent so far, said town Public Works Director Juan Florensa, adding that the town has beach renourishment projects planned in three areas, including one at the northern tip of Longboat Key.
Loss of sand is not the only objection the company has had to overcome.
Environmental and other groups expressed concerns about impacts on water and air quality, wetlands, navigation, fisheries, marine mammals and sea turtles. A competing pipeline company also objected to the project.
Anna Maria Island residents were concerned about visual blight until the company made assurances that the port's equipment would be submerged most of the time.
Port Dolphin also was required to alter its original pipeline route to avoid Terra Ceia Aquatic Preserve.