Alabama Governor Approves Closed-Loop LNG Facility

Governor Bob Riley has approved the application submitted by TORP Technology to operate a liquefied natural gas terminal 63 miles off the Alabama coast after the company agreed to use an environmentally-friendly method to reheat the gas.

The company had originally proposed using an open-loop system that would have used seawater from the Gulf to warm up the imported LNG. Governor Riley has consistently opposed applications by companies that planned to use the open-loop system because of the negative impact on Alabama’s marine resources.

In 2006, Governor Riley opposed a plan by ConocoPhillips to build an LNG facility using the open-loop system 13 miles south of Dauphin Island. In 2008, TORP withdrew its original application shortly after Governor Riley announced he would not allow the project to go forward with an open-loop system.

Governor Riley continued discussions with TORP after the company withdrew its original application, and the result is a re-designed LNG terminal that will use a “closed-loop” system and is projected to create 250 direct and indirect jobs.

In addition, because of the Governor’s continued negotiations with TORP, the company has agreed to pay the state $25m to establish a fund that will go toward protection, restoration and improvement of Alabama’s marine and coastal resources. That fund will be maintained by the Alabama Department of Conservation and Natural Resources.

“With this agreement we’re able to protect and enhance our environment, improve our economy with 250 new jobs, and provide an important alternative source of natural gas for Alabama,” said Governor Riley. “I commend TORP for its proposal. Instead of using technology that would harm our valuable marine resources, now they will use an environmentally safe system. At the same time, the project will generate new jobs and help the state establish a fund that will enhance our environment. I believe this agreement is a model of cooperation between government and business and for the responsible development of future energy projects.”

Casi Callaway, Executive Director of Mobile Baykeeper, an environmental group with more than 4,000 members, said the change to the closed-loop system alleviates the organization’s concerns about the project.

“The concerns we had have been alleviated and I commend Governor Riley for his insistence on making sure this facility will operate with a closed-loop system. Governor Riley has been tenacious in protecting the state’s marine resources,” said Callaway.

Joe Berno, CEO of TORP Terminal, said: “The application process resulted in a win-win situation for everyone involved. We at TORP take our environmental stewardship very seriously, and we feel very positive about the support the project now enjoys and look forward to moving ahead with the process. With the Bienville Terminal, we plan to offer innovative commercial, as well as technical, solutions to the industry.”

The LNG terminal is a natural gas receiving facility and will not be used in the exploration or production of oil or gas.