Pilot LNG proposed plant

A rendering shows the LNG fueling station that a private company, Pilot LNG, has proposed building in the waters off Pelican Island. The company said Thursday it had filed applications to begin the permitting process for the project.

GALVESTON

The company proposing to build a liquid natural gas fuel bunker in the water off Pelican Island in Galveston has filed permitting paperwork with the U.S. Army Corps of Engineers and other agencies to begin the next step in bringing the project to fruition.

The announcement, made Thursday in a press release, is the first news about the proposed fuel facility since it was pitched to the Galveston Wharves Board of Trustees in April.

Pilot LNG has proposed building a natural gas terminal that would provide fuel to ships that use the cleaner-burning fuel. In pitches to port officials, the company said it was trying to take advantage of the increased demand for natural gas fuel because of new regulations requiring ships to produce fewer emissions.

“The proposed Galveston LNG Bunker Port would provide the necessary infrastructure to supply the growing market for LNG marine fuel, substantially reducing marine emissions and cutting shippers’ fuel costs at the same time,” said Jonathan Cook, the CEO of Pilot LNG.

The company in January approached the Wharves Board to propose building a terminal on undeveloped land on the northeast part of Pelican Island, a space that would be convenient for ships heading to Galveston, Texas City or other points around Galveston Bay and the Houston Ship Channel.

The floating facility would store up to 16,000 cubic meters of gas at any time and require a pipeline to be built to be constantly supplied with gas.

The company does not yet have a lease or a memorandum of agreement with the Port of Galveston, Port Director Rodger Rees said Thursday. However, Rees said the port had agreed to give the company 90 days to develop a proposal with the port for use of the land.

“It allowed them to know that the property was not going to go away to anybody else,” Rees said.

Rees said he granted the company a 30-day extension on that deadline on Wednesday. The company did not pay the port for the period of exclusivity on the land, but Rees said there is generally little interest from businesses in the site, which has no road access.

A draft agreement between the port and the company was presented to the Wharves Board in March but was not voted on. At the time, Rees said the port and company officials had yet to meet about the project in person because of the COVID-19 pandemic.

The draft agreement proposed giving the company up to three years to finalize plans to build the facility. At the end of that period, the company would enter into a long-term lease with the port, according to the draft agreement.

The memorandum has not appeared on the Wharves Board’s agenda since March 31, and it has not been put to a vote.

Putting a three-year option on the land would require the company to pay the port and a vote from the Wharves Board, Rees said.

The company said it expected to make a “final investment decision” about the project in the second half of 2021 and to complete construction by 2024.

John Wayne Ferguson: 409-683-5226; john.ferguson@galvnews.com or on Twitter @johnwferguson.

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(2) comments

Gary Scoggin

Looks like a good project. I assume that pipeline natural gas gets liquified on shore and piped to the floating facility for loading.

Charlotte O'rourke

Question - when did the “port” (which means the port board) vote on a 90 day exclusive agreement with an option to extend without any fee for the exclusive option on Pelican Island port property.

It appears the “port” committed to a policy course of action and a specific vendor without the terms of the arrangement or financial competitive considerations being considered and approved in open session.

“Rees said the port had agreed to give the company 90 days to develop a proposal with the port for use of the land.”

“It allowed them to know that the property was not going to go away to anybody else,” Rees said.

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