NY rejects Long Island Sound LNG terminal

By Matt Daily

NEW YORK (Reuters) - New York's governor on Thursday rejected a proposal by energy companies Shell and TransCanada to build a liquefied natural gas platform in Long Island Sound, saying it was "fundamentally wrong" to privatize open water.

Rejection of the Broadwater plant was the latest setback for the energy industry's efforts to build a terminal off North America's eastern shores to import supplies of natural gas from the Caribbean, Middle East and West Africa.

New York's new governor, David Paterson, said he wanted to protect Long Island Sound, the body of water between Connecticut and New York's Long Island.

"Broadwater does not pass that test," he said.

The project, called for a terminal with a capacity of 1.25 billion cubic feet of natural gas per day that would be built for $700 million, according to 2004 estimates.

Connecticut Gov. Jodi Rell praised the decision by New York.

"Anyone who has ever stood on these shores and looked out over these beautiful waters understands that this is no place for a giant industrial barge. This is no place for a floating terrorist target," Rell said in a statement.

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.