Calais LNG is requesting another extension of time -- to January 15 -- in its application before the Maine Board of Environmental Protection (BEP) -- this time so the company can both finalize negotiations with a new financial backer and renew its option on a parcel of land for the terminal site in Red Beach. In September the BEP chair had granted a delay until December 1 for the company to find financing for the project.
     Along with the lack of financing, the company presently does not have right to some of the land that would be used for the project. The owners of one of the parcels that is proposed for the terminal south of Devil's Head, Steven Carothers and Gail Roberts, had written on November 17 to the BEP, stating that, as of August 30, Calais LNG failed to exercise or renew its option to purchase their land and therefore lost any rights to use or to purchase the property. "Presently, Calais LNG has absolutely no title, right or interest in our land," they added.
     The landowners requested that the BEP enforce the requirement that applicants for projects being reviewed by the board must maintain "sufficient title, right or interest throughout the entire application processing period" to the property that is proposed for development. The property owners asked that the BEP continue to postpone or suspend the processing of Calais LNG's application.
     In a November 19 letter, BEP Chair Susan Lessard then asked Calais LNG to respond by November 24 on its intent with its pending applications. "If Calais LNG does not intend to withdraw its applications, it should show cause as to why the applications should remain pending," she wrote.
     In his reply to the BEP, dated November 23, Calais LNG attorney David Van Slyke wrote, "As part of the process of transitioning the project to new financial backers, the parties involved initiated discussions with Carothers to renegotiate the option agreement to more appropriately reflect the current economic climate. Those negotiations have been ongoing since prior to the expiration of the option agreement."
     In asking for the delay until January 15, he stated, "Calais LNG does not intend to withdraw its applications at this time. The project is in the final throes of transitioning majority ownership of the project from GS Power Holdings LLC to a new managing member for Calais LNG. Once that occurs -- and project funding is in place -- title, right and interest to the Carothers' property will be secured and various modifications to the project applications will be submitted to the DEP, BEP and the parties to this proceeding."
     Calais LNG Project Manager Ian Emery expects that the company will be able to start the BEP application review process and hearings this winter.
     Concerning the land option, Emery states, "This is not the first time we've had to renegotiate." Calais LNG has previously negotiated the option agreement twice before with the landowners. Emery adds that the contract with the Carothers expired when its financial partner, GS Power Holdings, a subsidiary of Goldman Sachs, left the project.
     The BEP hearings on the project had been scheduled in July, but the company had requested a postponement just before they were set to begin. Then it announced that GS Power Holdings was selling its interest in the project, and the BEP granted an extension until September 11 for the company to find a new financial backer. In September the company requested another extension, and BEP Chair Lessard had approved another postponement until December 1.
     "We hope in the next several weeks to have a finalized agreement with new investment partners," says Emery, adding that Calais LNG is presently negotiating with a company. He expects that negotiations with the Carothers also will be concluded within the same time. He notes that the 250-acre parcel owned by the Carothers is only a portion of the land that Calais LNG proposes to use for its terminal in Red Beach. "There are two properties we've optioned. The other is south of the Carothers', and we first considered using just that property."
     Emery continues, "There is a lot of interest in our project, since there is a market in New England that is still not being served. The situation is that they are dependent on sources from Canada for natural gas." The Canaport LNG facility in Saint John has been shipping natural gas into the New England market, but has been operating at less than 20% of its capacity.
     Emery maintains that costs have risen significantly for electricity imported from Canada, as transmission and production costs have increased. The Calais LNG project would reduce those costs by providing competition, he says, since it would provide opportunities for new power generation in Maine.