UPDATE 1-US high court: Delaware can block BP LNG terminal

Mon Mar 31, 2008 3:42pm EDT

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By Chris Baltimore

WASHINGTON, March 31 (Reuters) - The U.S. Supreme Court on Monday sided with Delaware and ruled the state can block a $750 million liquefied natural gas plant that BP Plc (BP.L) wants to build on the New Jersey side of the Delaware River.

The high court's 6-2 ruling is a setback to BP's plan to build the Crown Landing terminal to offload super-cooled liquefied natural gas from tanker ships. BP was not a party to the case.

At issue is a 2,000-foot-long pier extending into the river as part of the planned Crown Landing LNG terminal on the New Jersey shore near Logan Township.

But a land grant from England dating back to the colonial era gave Delaware control over parts of the river beyond the midway point between the two state's shorelines.

In the court's majority opinion, Justice Ruth Bader Ginsburg rejected New Jersey's claim of exclusive jurisdiction over any project that begins on the state's shore and extends into the river.

She said the facility's pier would extend into Delaware. "We confirm Delaware's authority to deny permission for the Crown Landing terminal," Ginsburg wrote.

BP wanted to build a terminal big enough to handle about 1.2 billion cubic feet a day, enough natural gas to supply the daily needs of about 5 million homes. The U.S. Northeast relies heavily on clean-burning natural gas as a heating fuel.

"We will continue to explore other options and anticipate that the project will move forward and eventually be built here on the Delaware River," said Tom Mueller, government and public affairs director for BP.

The ruling upheld a special master's key finding that Delaware has authority to approve or disapprove the proposed terminal, along with New Jersey, to the extent the project extends into Delaware's territory.

In summarizing the ruling from the bench, Ginsburg said Delaware has overlapping authority with New Jersey's to accept, reject or regulate structures extending off the shore of New Jersey and into Delaware's territory.

Justices Antonin Scalia and Samuel Alito dissented. (Additional reporting by James Vicini in Washington; Editing by Christian Wiessner)

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