LNG Projects

Upstream:
Sakhalin Island, Russia
Amazon Rainforest, Peru
Tangguh, Indonesia
Barrow Island, Australia

Downstream: Baja California
Costa Azul (Near Ensenada)
Coronado Island

Downstream: California
Long Beach
Oxnard – BHP Billiton
Oxnard – Crystal Energy

Proposed and Announced Southern California and Nowrthwest Mexico LNG Terminals and Capacity (inMMcfd)

LNG: Site by Site Impacts

Upstream: Sakhalin Island, Russia

Sakhalin is a Russian island that is located about 50 miles north of Japan. After the collapse of the Soviet Union in the early 1990’s, multi-national oil and gas companies wasted little time in exploring the waters around the island for oil and gas. It is now one of the leading oil and gas producing regions in Russia, and almost all of what is being produced is for the export market.

Natural gas is a by-product of the crude oil that is being extracted from Sakhalin. Despite industry claims to the contrary, getting natural gas from beneath the ocean floor has proven to be a dirty and dangerous process. Sakhalin’s oil and gas is being drilled from two huge off-shore oil platforms, one operated primarily by ExxonMobil (the Sakhalin I project), and the other primarily by Shell and Mitsubishi (the Sakhalin II project). Sakhalin II would be a potential supplier of the Shell/Sempra import terminal at Costa Azul in Baja California.

Both of these platforms are located in a pristine marine habitat, and can potentially impact the only feeding ground of the critically endangered Western Pacific Gray Whale. There are about only 100 of these magnificent creatures alive, and the health of the surviving whales is being seriously compromised. Scientists studying the whales have observed malnourished, or “skinny,” whales in the area. These scientists are concerned that continued oil and gas drilling adjacent to whale habitat, tanker traffic, and underwater pipeline construction could push the last of this dying breed into extinction.

For the next phase of the Sakhalin II project, Shell wants to build massive infrastructure to get the oil and gas to markets abroad. This will involve laying underwater oil and gas pipelines that will run right through whale feeding habitat, as well as through the home of many other species of fish, and on to the shores of Sakhalin. Environmentalists and local fishermen are very concerned that the construction of these pipelines could seriously disrupt this habitat, and that the pipeline could leak and contaminate the waters.

Once on the island, the oil and gas would be sent through parallel pipelines that will run the length of Sakhalin Island, over 800 kilometers, to its southern tip. Along its route, the pipeline will cross over 1,000 streams and rivers. Hundreds of these waterways provide spawning grounds for wild salmon, and together they contribute to one of the most robust salmon habitats in the world. The pipeline crossings will gouge right through the beds of these streams, with very little concern given to the well-being of the salmon, or the local economy and community that depends on the salmon for a substantial part of their diet.

The Sakhalin II project is dependent upon the public’s money for its construction. The U.S. Export-Import Bank, and the European Bank for Reconstruction and Development are currently considering financing the further development of the Sakhalin II project, including the gas pipeline and the regasification terminal.

For more information: www.pacificenvironment.org

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Amazon Rainforest, Peru

The Camisea Gas Project in Peru is located in previously inaccessible Peruvian jungle in one of the most biologically diverse areas in the world. The project is also located in the Nahua Kugapakori State Reserve neighboring the Urubamba River, which was created over a decade ago to protect vulnerable native cultures.  These nomadic, indigenous communities have had little or no contact with the outside world.  In spite of the protected status of this land, Phase I of the Camisea Gas project will be completed in August 2004. This project is highly controversial due to the extensive environmental damage and the impact on indigenous peoples caused during the construction of the gas wells, gas plant, and 700-kilometer pipeline from the jungle to the coast.

Companies involved in the Camisea project consortium include Hunt Oil, Halliburton, Argentina’s PlusPetrol and Techint, and Belgium's Tractebel. The consortium has been fined by the Peruvian government for violating erosion control and water quality standards. The pipeline right-of-way passes through many kilometers of steep jungle terrain with unstable soils and has been completely exposed for two consecutive rainy seasons. The failure of the consortium to promptly replant and close the pipeline right-of-way has resulted in tremendous erosion, landslides, and water quality impacts in the jungle portion of the project. This failure has also opened the region to “invasion” by outside colonists, further degrading this sensitive environment and threatening the health and way-of-life of the indigenous inhabitants.

Hunt Oil will be responsible for Phase II of the project, the construction of a liquefied natural gas (LNG) liquefaction terminal on the Peruvian coast south of Lima. The target markets for this LNG are California and Mexico.  While Hunt Oil and the other companies involved stand to make a substantial profit from LNG, the cost to the Machiguenga indigenous communities in the Camisea region is a decline in health, attributed to pollution and the invasion of construction, and the potential loss of their culture. 

The indigenous cultures living in the Nahua Kugapakori State Reserve are in the initial stages of contact with the outside world.  One of their early communications with the outside world was an expression of outrage at the invasion of the oil companies; “In the past, Shell worked here and almost all of us died from the diseases...We know that if another company comes here, our rivers and land will be destroyed. What will we eat when the rivers are dead and the animals have run away?"

For more information: www.amazonwatch.org

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Tangguh, Indonesia:
A Traditional Way of Life at Risk: BP’s Tangguh Project in Indonesia

BP has proposed an LNG exploitation site at the Berau and Bituni Bays, which are located in the Indonesian province, Papua.  The project, named the Tangguh (which translates to all-powerful in Indonesian) project by BP, requires the construction of two offshore gas platforms, a 2,000 meter long and 150 meter wide airfield and an LNG plant that will cover 600 hectares of what is now rainforest.  The massive construction required to operate BP’s plant is having a significant impact on the local populations. 

Bituni Bay is a fishing community.  Fishing and shrimping account for US$13 million/year.  Many fisher folk, both male and female, have taken jobs with BP.  However, the effects of BP’s construction threaten those that are not fortunate enough to claim one of the limited available positions of employment.  The seismic testing performed in the waters south of Bituni Bay has impacted fishing and reduced revenues for the local fisher folk.  Additionally, large fields of Mangrove have been cut to clear the way for the construction, resulting in large stacks of logs that disrupt local fisheries. 

As the mangroves are cut down to create space for the new LNG plant, the mangrove ecosystem is disrupted.  Mangroves are a major source of revenue, generating over US$10 million per year. The mangrove ecosystem is already under pressure from the wood chip exporting industry.

While many community members view the Tangguh project as an opportunity, citing BP estimates that 5,000 temporary construction jobs will be created with about 10 percent of those jobs being permanent, many citizens are angry about the lifestyle changes that the Tangguh project will force on them. The Economist reported that all information supplied to the villagers came from BP, NGO’s paid for by BP, or the Indonesian government, which stands to profit from the site.  If the villagers were informed of the potential safety and environmental harms associated with the site, they may be less captivated by the promise of a comparatively small number of jobs. 

The Papua province is in a state of extreme unrest as it seeks independence from Indonesia.  Local conflicts and investigations into human right’s abuses made the area too volatile for Exxon Mobil to operate in nearby Aceh, another province seeking independence from Indonesia.  Developing a natural gas exploitation site in this conflict stricken community may cause additional problems in the area. In addition, if BP is forced to close its LNG site due to safety concerns resulting from the conflict, the California market that it supplies will suffer a lack of supply.  The impacts of that drastic reduction in supply could be reminiscent of the previous energy crisis.  

For more information: http://www.jatam.org/english/case/bt/uploaded/not_power.html

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Barrow Island, Australia

ChevronTexaco, ExxonMobil and Shell are currently proposing to put over $6 billion worth of industrial gas processing facility and equipment on Barrow Island in a development known as the Gorgon Project.  This infrastructure, which includes an LNG liquefaction plant, could be located offshore, on the mainland or on less important islands nearby.

Barrow Island is Western Australia’s second largest island and home to internationally significant biodiversity.  If no concerted effort to regulate human access and activities on the island is made, the unique biodiversity of the island will be jeopardized or lost forever.  

There are 24 known indigenous animal species or subspecies that exist only on Barrow Island. This exceptional assemblage includes five forms of mammals, two types of reptiles, one species of bird and sixteen species of invertebrates.  The island is also a refuge for the magnificent Perentie that, at lengths of over six feet, is the world's second largest lizard.

Barrow Island is such an important habitat for unique species that it is referred to as “Australia’s Ark”.  A large construction workforce will soon invade this important habitat in order to build the proposed facilities. The estimated 52,037 personnel movements per year that will be required to build the new facilities is a manifold increase in the level of human industrial activity presently occurring on Barrow Island. This activity is one of the central threats posed to the 24 known types of animals that live nowhere else but Barrow Island. Increased human activities on the island increase the risk of the introduction of weeds and diseases that could wipe out the island’s biological diversity forever.

Presently, only 150 barge movements occur per year and only 150 people live on Barrow Island at any one time. The number of visitors to the island is carefully controlled based on Barrow Islands status as a Permanent Class A Reserve. Yet, even this relatively low level of activity has led to the introduction of eight known species of environmental weeds, four of which have been impossible to eradicate. In recent years it has also been necessary to implement eradication programmes for black rats, house mice, and European bees.

The Gorgon proposal estimates that 861 barge movements and 52,307 personnel movements per year will be required to build the new facilities.  The Australian Northwest Territory State Environmental Protection Authority (EPA) warns that temporary contractors will do the majority of this work.  This transitory work force will increase the risk of introducing foreign weeds, pests and diseases to the degree that the EPA considers “virtually certain”.

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Downstream: Baja California

Costa Azul (Near Ensenada)

Shell International Gas Limited and Sempra Energy LNG Corp have jointly proposed a Liquid Natural Gas (LNG) receiving terminal in Baja California.  The two companies will own and operate the $600 million facility.  The proposed location for the terminal is on the Costa Azul in Mexico, 23 km Northwest of the city of Ensenada.  The terminal has a designed natural gas delivery rate of 1000 million cubic feet per day (mmcfd).  A 64 km pipeline will stretch northwards from the terminal to the Industrial Park, El Florido, in the municipality of Tijuana. 

The Baja California site was chosen after evaluation of potential coastal sites near the U.S. border.  The final decision was made based on zoning, proximity to population centers, and proximity to deep water. The Shell/Sempra LNG terminal will be located within 2 miles of one of the most of the popular tourist resorts, Bajamar.  The associated pipeline will pass through an inland route that avoids residences, but has a more negative environmental impact as compared to other proposed routes.   

The Baja California LNG terminal will occupy 40 acres of coastal land, with 24 additional acres being used for the service road.  It will take three and a half years to construct, requiring approximately 1,000 construction workers.  Construction of the pipeline will disrupt nearby communities and will take one year to complete.  After construction, 30-40 technical workers will be required to operate the facility.  It is likely that already trained individuals will fill all of the higher-paid, skilled positions. Members of the local community are not likely to fill these higher-paying jobs.  In addition, 35 contract workers will be hired for services such as security, catering, cleaning, and maintenance.

The terminal will unnecessarily harm the coastal environment.  Shell and Sempra plan to use at least 100 million gallons per day of seawater to regasify the LNG at the terminal.  This process is expected to kill 100 percent of any sea life entrained in the seawater used for regasification.

There is concern that construction will destroy archeological remains dating back thousands of years. The archeologists who conducted the review are scrambling to study the site before the evidence is lost forever.

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Coronado Island

Chevron-Texaco has proposed an offshore LNG terminal that will use oil and gas industry technology to construct a receiving and regasification site in 20 meters of water, 13 km off the coast of Tijuana, Mexico.  The terminal will have an average capacity of 700 mmcfd. The LNG terminal will be located just 600 meters east of the Coronado Islands and will cost $650 million dollars to build.  Construction will last at least three years and is expected to require 1,200 construction workers.

The offshore LNG terminal at the Coronado Islands will receive LNG from a ChevronTexaco-owned exploitation site located in the Gorgon gas fields off the coast of Western Australia.  The site of the proposed ChevronTexaco LNG liquefaction plant in Barrow Island, Australia is highly controversial due to the unique habitat Barrow Island provides for a number of unique or endangered species.  The LNG receiving terminal off the Baja California coast will have the capacity to store 250,000 cubic meters of LNG.  The LNG will be warmed using seawater and then shipped through a new underwater pipeline that will join Baja California’s existing energy infrastructure.  The gas will be available to customers in Northern Baja California and throughout the West Coast of the U.S.

The offshore site was chosen based on the natural breakwater provided by the Coronado Islands.  Another consideration was the distance that an offshore site provided from residential communities. The site is within 600 meters of the Coronado Islands, critical habitat for a number of marine bird species.  A major concern is the impact of lights from the terminal on birds nesting on the island.

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Downstream: California

Long Beach
The proposed facility would have a throughput of 700 Million Cubic Feet per day of natural gas, the equivalent of 5 Million Metric Tons or 68.3 million barrels of LNG per year. The Terminal would have two LNG receiving tanks, each with an anticipated capacity of 160,000 cubic meters, an offloading berth and regasification unit. The estimated cost for the construction is USD $350 to 400 Million.