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Lease Signed for Natural Gas Plant

If various agencies approve, a Houston firm would process fuel at sea and pipe a vaporized form to Oxnard. Critics call the plan unsafe.

March 20, 2003|Fred Alvarez | Times Staff Writer

A Houston-based energy company is proposing to convert an oil platform off the Ventura County coast into a liquefied natural gas terminal and processing facility.

Crystal Energy LLC announced Tuesday it has signed a long-term lease to use Platform Grace, set in federal waters 11 miles offshore, as the West Coast's first natural gas importation and processing plant.

The company wants to ship liquefied natural gas to the platform, convert it there into vapor form and funnel it via an underwater pipeline to an area near the Mandalay Bay power plant in Oxnard.

The proposal, which still faces years of regulatory hurdles, already has stirred concerns among some city officials, community leaders and environmentalists who last year beat back a similar project at Ormond Beach in Oxnard.

But Crystal Energy officials say they believe their $125-million project will be an easier sell, noting that the proposal minimizes potential safety and environmental concerns by moving the processing of liquefied natural gas offshore.

Company officials said the project also would provide a safe and much-needed natural gas supply for California consumers, eventually pumping out enough fuel to meet a quarter of the state's residential energy needs.

"The project presents a unique opportunity for California to meet its rising natural gas demand," said William O. Perkins, president of Crystal Energy. "By locating the facility 11 miles offshore on an existing platform, public safety and environmental impacts will be reduced to the simple installation of a state-of-the-art natural gas pipeline."

Some locals remain unconvinced, saying the proposal reminds them of a controversial effort last year by Oxy Energy Services to build a liquefied natural gas terminal next to an Ormond Beach power plant in Oxnard.

After a heated anti-Oxy campaign, those plans were scuttled when a state conservation agency purchased the marshland where the facility would have been built.

Oxnard Mayor Manuel Lopez, who opposed the Oxy project, said he has even greater concerns about the current proposal, since the pipeline is scheduled to come ashore at the heavily populated area around Mandalay State Beach.

"My concern is for the safety of the 200,000 people in our city," Lopez said. "I think we have an obligation to look out for their best interests."

Crystal Energy representatives say they believe their project will go a long way toward eliminating many of the concerns raised by critics of previous proposals.

Not only will the processing operation take place at sea, they say, but the new pipeline from Platform Grace to the Oxnard shore will follow an existing pipeline right of way. The pipeline would connect on the mainland to an existing system, eliminating the need to erect tanks or other storage facilities.

At peak capacity, six to 10 tankers a month would dock at the ocean platform, constructed in 1979 by Chevron and now owned by Carpinteria-based Venoco. The platform has not produced gas or oil for several years, company officials said, and serves to support other platforms.

Now that the lease has been signed, the company will file formal applications with various permitting agencies. Those include the U.S. Coast Guard, the California State Lands Commission and the California Coastal Commission. The Ventura County Board of Supervisors and the Oxnard City Council also must sign off on the project.

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