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UpstreamOnline: Shell time-out at Gulf Landing

By Upstream staff

Shell has paused with front-end engineering and design work on the Gulf Landing gravity-base liquefied natural gas receiving terminal pending the completion of environmental impact studies (EIS) of the proposed graving dock sites and for closer alignment with the projected 2011 start-up of the Olokola LNG plant in Nigeria.

The FEED studies, which were projected to last 10 months to a year, could be on hold for three months or more, claimed a source familiar with the project.

A consortium of fabricator Kiewit Offshore Services, Japanese LNG tank builder IHI and engineering group Black&Veatch is performing one FEED while Saipem and its Technigaz subsidiary is engaged in a rival, separate FEED for Gulf Landing.

Shell invited both consortia to participate with the intention of proceeding with one ofthe two resulting studies.

Several sites are under consideration for building the GBS but Ingleside, Texas, is expected to be the preferred location for siting the graving dock. Saipem is believed to be pushing for construction to take place along the Manzanillo Bay coast in the Dominican Republic.

A US Coast Guard official in Washington DC confirmed the delay. “They are still waiting on some information,” the official said of Shell.

“Once they give us all the information we’re prepared to proceed with the development of an environmental impact statement.”

The official added that the additional data is likely to be submitted within the next few months.

The graving dock EIS is required before massive excavation of the concrete GBS can begin.

Once the draft EIS is published, a round of public hearings will be called before a final EIS is completed.

“The environmental impacts of creating a graving dock to build these things is something that could be significant,” said the Coast Guard official. “You actually have to essentially dig a huge hole in the ground next to a waterway, build this thing, and then punch through the earth between this hole and the waterway and flood this hole and then float your project out.”

A Shell spokeswoman in Houston said: “The US Coast Guard is currently preparing environmental impact statements for the construction site to satisfy the Gulf Landing Deepwater Port License. We expect to have a better idea of the construction timing once the licensing work is complete.”

The statement concluded: “In addition to the construction site work, Shell is progressing with marine data collection and development of a marine monitoring programme for the Gulf Landing LNG terminal location.”

The source familiar with the project said the delay does not actually hurt Shell, since it is in no rush to complete Gulf Landing before its projected supply source, the $6 billion Olokola LNG project in Nigeria, starts operations in 2011.

Since the Shell Gulf Landing permit approval, the Coast Guard now requires the construction site EIS to be appended to the impact statement for the overall project.

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