BOSTON (AP) – Outgoing Gov. Mitt Romney has approved plans to build two liquefied natural gas terminals off the coast of Gloucester, the last major hurdle in an effort to help meet a growing regional demand for energy while minimizing threats to the fishing industry.

The proposed offshore terminals are expected to boost supplies by about 20 percent, all of which will be pumped directly into the New England grid, Romney said in giving his approval Tuesday.

The Northeast Gateway and Neptune projects, however, must still secure federal and local permits, and need to win approval from local and state environmental officials.

The terminals are expected to be located in federal waters approximately 7 and 13 miles south-southeast of Gloucester, a fishing community about 35 miles north of Boston. The final decision rests with the U.S. Maritime Administration.

If the agency grants the licenses, the Northeast Gateway project, proposed by Excelerate Energy LLC, could begin construction as early as the spring with service beginning in December of that year. Neptune could begin construction in the spring of 2009 with operations following in December of that year.

New England lies on the tail end of the gas pipelines from Canada and the Gulf of Mexico. Consumers in the region are hit by spot shortages when users upstream siphon off large amounts to satisfy surging demands.

New England currently depends on one supplier for its natural gas needs, and the new project also is expected to introduce competition in the market.

In Maine, there are two active proposals for LNG terminals in Washington County, one on the Passamaquoddy Tribe’s Pleasant Point Reservation and the other in Robbinston.

Demand for natural gas from power generators and residential consumers in New England is expected to grow between 1 and 2 percent per year over the next two decades.

At that rate, the region could face a shortage of nearly 500 million cubic feet per day in the year 2010, according to a statement by Suez Energy North America, the holding company for Neptune LNG LLC and a subsidiary of France-based Suez.

“We look forward to having Neptune supplement our onshore import terminal in Everett, Mass., to meet the growing demand for natural gas from consumers in the region,” said Zin Smati, president and CEO of SUEZ Energy North America.

Construction of the terminals would involve putting in underwater buoys on which LNG tankers would dock, vaporize the liquefied gas and offload it into a pipeline buried in the ocean floor.

Some fishing industry leaders had opposed the terminals, saying construction of the pipeline would disturb fish habitats and force more fishing ground closures in areas invaluable to Gloucester’s fishermen.

Both Texas-based companies proposing the terminals have agreed to pay $47 million in mitigation fees for any effects to the commercial fishing industry and the marine habitat.

A joint review undertaken by the U.S. Coast Guard and the Massachusetts Executive Office of Public Safety found the projects properly addressed public safety concerns, Romney said.

The companies also say offshore terminals will minimize risks to the public by eliminating the need to ferry the hazardous gas to Boston Harbor and eliminating the need for onshore storage tankers since the gas will be pumped out of the seagoing tankers and into the grid.

Sue Reid, an attorney with the Conservation Law Foundation, an environmental advocacy group, said she was pleased with Romney’s decision, especially the mitigation package.

“If done right, an offshore LNG facility eliminates the need for the more dangerous land-based LNG proposals,” she said.

The governor’s approval demonstrates there are safer alternatives to placing new LNG terminals in densely populated areas or sensitive parklands, said U.S. Rep. Ed Markey, D-Mass., a member of the House Energy and Commerce Committee.

“New England needs more LNG, but we have a responsibility to ensure that those LNG imports are delivered securely in this post-9/11 world,” Markey said in a statement.

AP-ES-12-20-06 1355EST

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