Harbor plan leaves LNG out of mix at Kalaeloa

A plan proposed more than 30 years ago to build a dedicated fuel pier at Kalaeloa Barbers Point Harbor is finally advancing as part of the state’s effort to meet the changing needs of Hawaii’s fuel and energy markets.

The state Department of Transportation recently filed an environmental impact statement preparation notice for the proj­ect that will consolidate the handling of bulk fuel imports and exports at Piers 3 and 4 at Kalaeloa Barbers Point Harbor.

Kalaeloa is the state’s primary harbor for the interisland distribution of liquid fuel and propane. Most of the crude oil that is refined in Hawaii is unloaded from tankers at two offshore moorings about two miles off of Barbers Point.

Ships and barges carrying fuel shipments in and out of Kalaeloa are forced to compete with other vessels in an increasingly congested environment, according to the notice filed by the DOT. Kalaeloa also is limited in the types and quantity of fuel it can handle, the DOT said.

"In short, the new fuel pier will have to be designed with an accurate view of the anticipated energy and fuel markets of the future, with sufficient flexibility to serve a changing operational and technology market," according to the notice.

While the broadly worded document talks about the need to accommodate "new fuel supply requirements," it doesn’t mention specific types of fuel, such as liquefied natural gas. The ability to ship in LNG would require the construction of a specialized import terminal that would be the first of its kind in Hawaii.

Gov. Neil Abercrombie has stressed the need for Hawaii to begin importing LNG as a cheaper alternative to oil for electricity generation. And Hawaii Gas, the state’s only gas utility, has launched a three-phase plan for using small-scale ships to bring in LNG for power generation by 2019.

The fact that LNG wasn’t addressed in the 25-page EIS notice caught the attention of some in Hawaii’s energy community, said Sha­sha Fesha­raki, chief operating officer at energy consultancy Facts Global Energy.

"There was no specific mention of LNG in the document. Some parties we deal with reached out to us saying they were concerned," Fesha­­raki said. "There is some confusion out there."

A spokeswoman at the state Department of Transportation said there were no DOT officials available to comment on the EIS notice. The state’s Energy Office, which coordinates state energy policy, referred questions about potential LNG shipments to the DOT.

Tom Young, executive vice president for Hawaii Gas, said it was his understanding that any plans for an LNG terminal at Kalaeloa would be part of the Kalaeloa Barbers Point Harbor Master Plan. That document, expected to be completed in 2015, would guide development at the harbor through 2040.

The EIS for the dedicated fuel pier, meanwhile, is expected to be completed by 2014, according to the DOT notice. The proj­ect is expected to take five years to design and build.

Young said that even if an LNG terminal is not part of the dedicated fuel pier, the proj­ect will be a welcome relief for Hawaii Gas. Right now the company is forced to use barges to ship in propane because of space restrictions at the harbor. The new facility will be able to accommodate bigger propane tankers that will allow Hawaii Gas to bring in larger quantities, he said.

One of the two dedicated berths at the new fuel pier will accommodate tankers 750 feet long, while the other will be able to handle 400-foot barges, according to the EIS notice.

The Marisco Ltd. shipyard, which occupies Piers 3 and 4, will be moved to the mauka side of the harbor.