May 19, 2008 / 4:23 PM / 12 years ago

UPDATE 1-Excelerate's US Northeast LNG site starts service

(Adds details, background)

NEW YORK, May 19 (Reuters) - Excelerate Energy said Monday its Northeast Gateway liquefied natural gas facility off the coast of Massachusetts received its first cargo and commenced operations.

The completion and commissioning of the site marks the first new LNG facility to be built on the U.S. East Coast in more than 30 years, since the Cove Point facility in Maryland became operational in 1978.

“With the arrival of the vessel Excellence at the new Northeast Gateway deepwater LNG port, the facility has commenced commercial operations,” the company said in a statement.

“Operating approximately 18 miles (30-km) east of Boston in Massachusetts Bay, Excellence is currently off-loading its cargo into the existing HubLine natural gas pipeline system operated by Spectra Energy,” it added.

Excelerate and Spectra extended a 16-mile, 24-inch (61-cm) pipeline lateral from Spectra’s HubLine to the deepwater port. Regional energy studies show that New England’s demand for natural gas will increase considerably in coming years, meaning new supplies are needed to ensure price stability, Excelerate said.

Excellence is expected to offload about one billion cubic feet of gas in order to test all of the port and pipeline systems. Ultimately, the company said the system would be capable of supplying up to approximately 20 percent of New England’s natural gas needs.

LNG is natural gas cooled to liquid form for loading on special tankers and delivery to receiving terminals where it is regasified and pumped into onshore pipelines.

The regasification system developed by Excelerate allows its vessels to regasify its LNG cargo and deliver it to one of two turret loading buoys located approximately 90 feet (27 meters) below the water surface.

The vessel draws one of the buoys into a specially designed compartment and connects it to the onboard regasification equipment. The buoys act as a conduit for the gas delivery, and also as a mooring for the vessels, eliminating the need to anchor the ships at the deepwater port.

Excelerate has used the system in the U.S. Gulf of Mexico at their Gulf Gateway site, about 116 miles south of Louisiana.

Germany’s second-largest utility RWE AG (RWEG.DE) said in February it agreed to buy half of privately-owned Excelerate for $500 million. (Reporting by Eileen Moustakis and Joe Silha; Editing by Marguerita Choy)

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