PORTLAND (AP) – A company that wants to create a liquefied natural gas terminal on Passamaquoddy tribal land in Washington County plans to move forward with a proposal that could cut in half the original $400 million construction cost, officials said Thursday.

The proposal will be filed with the Federal Energy Regulatory Commission and other regulatory agencies in six to eight months and final action is expected within 18 to 20 months, said Brian Smith, project coordinator for Oklahoma-based Quoddy Bay LLC. The company has set a goal of launching operations at Pleasant Point by late 2009.

“We are now moving forward quickly – more quickly than anticipated – in the next steps,” Smith said in a conference call with reporters.

The announcement came a week after FERC approved an LNG terminal in Fall River, Mass. A separate proposal in Rhode Island was rejected. Two other LNG proposals off the Massachusetts coast have been filed with the U.S. Coast Guard this year.

In Maine, the LNG proposal would cost less than previously projected because there would be no massive storage tanks, Smith said. Instead, tankers would offload natural gas into a feeder line that links up with the Maritimes & Northeast Pipeline.

The proposal, unique in the United States, calls for tankers to tie up at the end of a half-mile-long pier, where supercooled liquid gas would be offloaded and warmed into a gaseous state. From there, it would be pumped into the pipeline, Smith said.

Under the leasing arrangement, the tribe would get between $6 million and $15 million a year depending on the flow of natural gas, officials said.

For now, Quoddy Bay is entering into negotiations with potential gas suppliers, Smith said. Once that’s completed, the company will enter into talks with Maritimes & Northeast Pipeline, which carries natural gas from Sable Island off Nova Scotia through Maine and on to markets in the Northeast, Smith said.

Pipeline capacity won’t present an obstacle to the LNG terminal, which would offload between 500 million to 2 billion cubic feet per day, he said.

Thursday’s announcement by Passamaquoddy and Quoddy Bay officials followed the public disclosure 24 hours earlier that the Bureau of Indian Affairs had signed off on the lease agreement. The documents were signed a month ago, but officials waited until after the 30-day appeal period expired to make the announcement.

Gary Guisinger of Save Passamaquoddy Bay, which opposes the LNG terminal, said it appeared that tribal leaders delayed the announcement to preclude dissenters from appealing the decision by the Bureau of Indian Affairs.

At least one of the three tribal members who voted against the lease agreement in May was unaware that the BIA had signed off.

“On the surface of this, it seems secretive and underhanded, if not illegal,” Guisinger said from his home in Perry. “That’s what the appeals process is for – to make sure everything is on the up and up.”

The Passamaquoddy tribe voted in favor of entering into negotiations last August for an LNG terminal on a 42-acre site that had been transferred to the tribe by the town of Perry. Perry voters ultimately rejected the proposal.

The Passamaquoddies regrouped and proposed a tribal site called Split Rock that was too small to accommodate large tanks. Quoddy Bay LLC then came up with an alternative proposal utilizing only 10 acres of land.

Forgoing storage tanks eliminates about $200 million in construction costs but those savings would be offset because offloading natural gas directly into the pipeline system ties up tankers for three to six days, said Don Smith, Quoddy Bay’s president. Because of that, the company would have to pay a rental fee for the tankers.

Another potential downside would occur if a storm prevented a tanker from tying up, stopping the flow of natural gas into the pipeline, he said.

To deal with that, Quoddy Bay has proposed having the ability to tie up a second tanker at the pier for backup capacity, officials said. Storage tanks could be built as a last resort if an economic analysis suggests it’s necessary as a backup, they said.

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