April 28, 2008 / 7:44 PM / 12 years ago

UPDATE 1-Shell, TransCanada to appeal New York LNG decision

(Adds background, comment from Connecticut attorney general)

NEW YORK, April 28 (Reuters) - Energy companies Shell (RDSa.L) and TransCanada (TRP.TO) plan to ask the U.S. Commerce department to overturn New York state’s rejection of their plan to build a liquefied natural gas platform in Long Island Sound.

John Hritcko, regional project director for the Broadwater LNG project, has asked the Federal Energy Regulatory Commission to forward the details of the case to the Secretary of Commerce in preparation for an appeal.

The company plans to appeal to the Commerce department before the May 12 deadline, he said. He said the department has up to a year to process the appeal.

Earlier in April, New York Governor David Paterson rejected the proposal to build the Broadwater project, saying it was “fundamentally wrong” to privatize open water.

Under the Coastal Zone Management Act, the state of New York’s objection prevents federal agencies from issuing permits required by the project. However, the state’s objection may be overridden by the Secretary of Commerce through an administrative appeal.

The Federal Energy Regulatory Commission approved Broadwater’s construction in March despite concerns by local officials that the plant could be the target of an attack.

LNG is natural gas that is super cooled into liquid form for transport in ships. It is warmed and returned to its gaseous state at the import terminal.

The project would be the first floating terminal in the United States for storing and delivering LNG. It would be able to deliver 1.25 billion cubic feet of natural gas a day to fuel electric generating plants and heat homes, helping to meet energy demand in New York and Connecticut, which share the sound.

Connecticut Attorney General Richard Blumenthal vowed to continue to aggressively fight against the project.

“Shell Oil is once again turning to friends — appealing to the Big Energy Bush Administration’s U.S. Department of Commerce,” Blumenthal said.

“This federal administration and its Secretary of Commerce are short lived and certainly will not have the final say on Broadwater. If they fail to respect the law — which Broadwater would clearly violate — the courts can overrule them.” (Reporting by Michael Erman; Additional reporting by Tom Doggett in Washington; Editing by Marguerita Choy)

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