The Calhoun LNG Project under development at The Port of Port Lavaca – Point Comfort will be designed, constructed, and permitted for a capacity of regasifying up to 1 Billion cubic feet (Bcf) of natural gas per day. The terminal facility will be located on a remote piece of Port property fronting on the Matagorda Ship Channel. The project has several strategic advantages compared to other proposed LNG projects in North America such as existing deepwater port and facilities infrastructure, strong support of the Port Authority, interest from large industrial users in the area, and nearby access to gas pipelines. Provided below is a brief description of the technical aspects of the Project.

Marine Facilities
The berthing facility will be structurally designed to handle a variety of LNG tanker sizes and designs. The unloading dock will be equipped with three 16” diameter articulated LNG unloading arms and one 16” diameter articulated vapor return arm. Each arm will be equipped with emergency shut-down systems to minimize the possibility of a spill during unloading operations. Construction of the marine facility will require some dredging along the property and the turning basin.

Storage Tanks
The storage facilities will consist of two storage tanks with each tank capable of storing 160,000 cubic meters (5.7 million cubic feet) of LNG at a temperature of minus 260 degrees Fahrenheit. The inner tank will be fabricated from 9% nickel steel plate, aluminum hanging roof plate, further enclosed by a carbon steel outer tank and roof. Specialty insulation will fill the annular space between the inner and outer tank, and blankets the internally suspended roof plate. The tank will be constructed on a pile-supported concrete cap and will be situated inside a dike capable of containing 110% of its full contents.

Vaporization and Separation
The vaporization and separation system will consist of LNG transfer pumps, vaporizers and a re-condenser/separation system necessary to warm LNG back into a gaseous state to meet natural gas pipeline quality specifications for Natural Gas. The Facility will be designed to separate natural gas liquids (NGL’s) from the LNG thus allowing the Terminal to take higher Btu LNG which provides added benefits to potential industrial end-users and conformity of natural gas to meet the stringent pipeline specifications of the natural gas pipelines.

Utilities
The Terminal will tie into and utilize existing Port utilities such as power, water, waste water and fire protection systems. Supplementary infrastructure will be installed as required including a dedicated and self-contained fire detection and emergency system within the Facility. A central control center and administration building will be constructed within the facility, and tied into the exiting port control room.

Interconnecting Pipelines
The pipeline connecting to the Calhoun LNG terminal and delivering the natural gas to the local markets and major pipelines in the region will be owned and operated by Point Comfort Pipeline Company, L.P., an affiliate of Gulf Coast LNG Partners, L.P. The natural gas pipeline will consist of 27 miles of 36-inch pipeline designed to transport one billion cubic feet (Bcf) per day of natural gas from the LNG terminal. The pipeline will be able to access approximately 5 Bcf per day of pipeline takeaway capacity, allowing it to reach two-thirds of the natural gas consumers in the U.S. as well as Northern Mexico. The planned pipeline connections include Energy Transfer (Houston Pipe Line/Channel System), Florida Gas Transmission, Kinder Morgan (Texas and Tejas Systems), Enterprise (Valero and Channel Systems), Boardwalk (Gulf South System), Natural Gas Pipeline of America, Transcontinental, and Tennessee Gas.

Permitting
The permitting process for LNG terminals is led by the Federal Energy Regulatory Commission (FERC) and also involves numerous other state and federal agencies such as the Texas Commission of Environmental Quality (TCEQ), the Coast Guard and the U.S. Army Corps of Engineers.

Additional information regarding the FERC permitting process can be found at the following link: www.ferc.gov/industries/gas/indus-act/lng-what.asp

Project Schedule
The project schedule can be divided into two phases, permitting and construction. The permitting phase is expected to last between 12 and 18 months. The construction phase will commence once all permits and necessary commercial contracts have been secured. Once underway, construction of the facility will take approximately 3 years. The Facility could be operational in late 2009 or early 2010.