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Gulf LNG Energy leases land at Pascagoula port

Gulf LNG Energy has exercised its option to lease 100 acres from the Port of Pascagoula, another step in locating a liquid natural gas terminal in Mississippi.

The action means $350,000 a year in rent during the construction phase of the terminal and $1 million a year after that, said port director Mark McAndrews.

Gulf LNG plans a closed-loop system, which company officials have said is the least harmful environmentally. It still has permits pending before federal and state regulatory agencies.

Port commissioners and the Jackson County Board of Supervisors are expected to vote on the lease Monday. Both granted Gulf LNG an option on the land in 2003 without opposition, McAndrews said.

Houston, Texas-based Gulf LNG has said it planned to develop around 40 acres of the state land held by the Jackson County Port Authority along the Bayou Casotte ship channel. The company has estimated that a 30-year lease would bring $14.17 million to the Public Trust Tidelands Fund. It also expects to hire 1,500 workers to build the terminal and 50 to operate it.

McAndrews said the first rent payment would be due “six months after we sign the lease or when construction starts.”

Half the rent will go the state tidelands trust and the other half to the port.

McAndrews said Gulf LNG is one year into the 18-month regulatory process, which addresses any environmental concerns.

“They are far enough along to exercise their option,” he said.

Gulf LNG was cleared on state Department of Marine Resources-regulated portions of its terminal in July. The DMR considered the company’s plan to remove 3 million cubic yards of dredge material to build the terminal.

When complete, the company plans to ship in natural gas that has been chilled to such a low temperature that it becomes a liquid, warm it back into a gas and pipe 1.3 billion cubic feet of natural gas daily to the national market.

Another terminal developer, Chevron, expects to clear the state and federal regulatory process with approval “within the next few months,” said Casotte Landing LNG manager Richard Lammons.

The terminal would be adjacent to Chevron’s refinery east of Pascagoula on Chevron property and in the same general area as the Gulf LNG.

Lammons said locating near the refinery will allow the terminal to capture and use waste heat from the refinery in the process where they warm the liquid natural gas, which helps minimize environmental impact.