PRESIDENT OF FREEPORT LNG DEVELOPMENT
Jessica Kourkounis  /  AP
The work to turn Freeport, Texas, into a liquified natural gas port is in the hands of Freeport LNG Development President Charles Reimer, seen here describing construction plans.
By
updated 2/17/2006 3:17:27 PM ET 2006-02-17T20:17:27

The only business left in this beachfront town of 38 residents is the Quintana Yacht Club — a restaurant with fresh seafood but no yachts. That number doubles next year.

The state’s smallest incorporated city, which sits about 90 miles south of Houston, will be in the energy business and home to the nation’s first new liquefied natural gas storage facility in more than two decades.

It will be worth $1.31 million a year to the city’s coffers, nearly five times the annual budget of $271,000, but it will also be a source of angst to a handful worried about accidents.

“The pipeline runs right through my backyard,” said Jerry Masters, owner of the Quintana Yacht Club. “If there is a leak, how will I know? You’ll know when I’m dead.”

It’s a story that is being played out nationwide.

Energy companies say they need a place to store natural gas imported to ease tight domestic supplies; meanwhile, communities worry about hazards of a spill or an explosion from LNG, which is natural gas that has been pressurized to fit into tankers.

The most significant accident took place more than 60 years ago in Cleveland when a facility exploded and killed 128 people, according to the University of Texas Bureau of Economic Geology.

Company chief builds home nearby
Charles Reimer, president of Freeport LNG Development LP, said LNG operations are not only safe, but they will eventually be recognized as valuable. He’s backing his claim by building a $200,000 seasonal home on Quintana.

“The consumer will care about this project because it’s going to be projects like this that improve the supply of gas and keep prices stable in the United States,” he said.

The parent company of this $700 million project is Houston-based Freeport LNG-GP Inc., which is co-owned by ConocoPhillips Co. and businessman Michael Smith.

Work on the 200-acre site began last year and will feature two spherical storage tanks about 180 feet tall and big enough to hold 84 million gallons. They will be connected to a pipeline carrying 1.5 billion cubic feet of natural gas daily.

Local start, then national reach
The natural gas will be used partly as feedstock, raw materials used in chemical production, at the nearby Dow Chemical plant.

The rest will be distributed statewide, but it could easily reach the northeastern states, a region geologically unsuitable for underground storage facilities and prone to cold spells as late as May.

“The beauty of Freeport is it will be tied into intrastate and interstate pipelines, and it will flow to the highest markets,” said Sigmund Cornelius, Conoco’s president of global gas.

“No doubt in my mind some of the molecules will end up in the northeast, the Midwest and wherever the pipes will take it.”

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