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Reuters: New York needs LNG facility, TransCanada CEO says

Thu Jan 17, 2008 9:47pm GMT 

CALGARY, Alberta, Jan 17 (Reuters) – Completing the Broadwater LNG terminal in Long Island Sound will help smooth out natural gas price spikes in New York City, one of the project’s backers said on Thursday.

Hal Kvisle, chief executive of TransCanada Corp (TRP.TO: Quote, Profile, Research), said the regasification facility will bring badly needed natural gas to Manhattan and Long Island, relieving a supply bottleneck that pushed prices above $21 per million British thermal units during a cold snap last month.

“We’ve had $25 to $30 premiums in the New York market versus (benchmark) Henry Hub prices,” Kvisle told reporters following a speech to a Calgary conference. “That illustrates the incredible bottleneck there … and the situation is getting worse.”

Kvisle said that adding natural-gas fired power generation in New York would further exacerbate shortages and boost prices unless new supplies could reach the area.

Completing the $700 million, 1 billion cubic feet per day, Broadwater facility will add new supplies to the market and lower prices, Kvisle said.

The Broadwater LNG terminal, backed by TransCanada and Shell U.S. Gas and Power (RDSa.L: Quote, Profile, Research), is a floating facility 9 miles from shore in the middle of Long Island Sound.

The proposal received environmental approval from staff at the U.S. Federal Energy Regulatory Commission earlier this month. However the project still needs state approvals and is facing opposition from some Connecticut state officials and environmental groups.

That concern is being dismissed by TransCanada’s chief executive.

“The logic of opposition to this project is questionable. I don’t understand why people would oppose this,” Kvisle said. “They either have a unique agenda of not wanting anything built anywhere or they have not examined the supply-demand crisis that is heading towards New York City.”

(Reporting by Scott Haggett; editing by Rob Wilson)

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