New Fortress tries to advance Delaware River terminal for LNG made in Marcellus Basin

Tuesday, 23 July 2019
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New Fortress Energy, the owner of LNG facilities in Florida and in Jamaica, is attempting to advance with developing an LNG export terminal on the Delaware River in New Jersey for cargo containers produced from two small liquefaction plants in the Marcellus Shale in Pennsylvania.

The US Army Corps of Engineers has reopened a public comment period for the project’s permit as environmental protesters increase pressure to block the project.

The small LNG export terminal permit process is being overseen by the Delaware River Basin Commission (DRBC), a regulatory agency involving four states and the US government that oversees the Delaware River watershed on the Atlantic Coast.

New Fortress affiliate Delaware River Partners in 2017 requested a waterway suitability assessment from the US Coast Guard, saying in a letter that it wanted to construct a multi-use, deep-water port and logistics center for a variety of uses, including the handling of automobiles, other bulk freight, and LNG and liquefied petroleum gas.

The company told the Coast Guard that the terminal would have an LNG export capacity of 1.5 million tonnes per annum and an LPG export capacity of 9.6 million barrels per annum.

The company is developing two small-scale liquefaction projects in the Marcellus Shale Basin in Northeast Pennsylvania that would have a combined capacity of 7.3 million gallons per day, according to filings with the US Securities and Exchange Commission.

The company is led by Wes Edens, co-founder of the private equity group Fortress Investment.

Site work is underway on the first facility in the Marcellus Shale in Bradford County, with construction expected to start in 2020.

A dedicated tanker truck fleet would transport the Marcellus sourced LNG from Bradford County to the Delaware River terminal site for loading and distribution.

Environmental groups claim that the New Fortress subsidiary failed to fully explain its plans for LNG at the proposed facility in Gloucester County, NJ.

The Delaware River project also hopes to use the railroad to bring additional volumes, though this aspect of the venture has yet to be approved by the US Department of Transportation.

New Fortress made its debut on the Nasdaq global exchange in January 2019 after an initial public offering. Its main corporate focus is introducing LNG to markets that lack access to the fuel.

In addition to its 100,000 gallons per day liquefaction plant in Miami, it operates a floating LNG terminal in Montego Bay, Jamaica, along with a fuel-handling facility in the US territory of Puerto Rico.

The Miami facility began operations in April 2016 and enables the company to produce LNG for export in intermodal ISO containers to the Caribbean and to small-scale customers in southern Florida.

In the Marcellus Shale, small-scale LNG facilities are gaining in importance because of the natural gas supply glut. The Marcellus is lacking pipeline transportation so that shale gas production is sometimes shut in rather than being sent into natural gas networks.

Northeast LNG exports are also likely to remain flat at about 700 million cubic feet per day for the foreseeable future as Dominion Energy’s larger single-Train Cove Point export plant in Maryland is fully subscribed.


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