EIA REPORT AES Ocean LNG, Ltd. Environmental Impact Assessment Prepared for: Bahamas Environment, Science & Technology Commission VOLUME I OF V 1 ENVIRONMENTAL IMPACT ASSESSMENT OCEAN CAY AND THE BIMINIS, THE BAHAMAS by Haley & Aldrich, Inc. for AES Ocean LNG, Ltd. File No. 27701-402 September 2002 Environmental Impact Assessment AES Ocean LNG, Ltd. EXECUTIVE SUMMARY This Executive Summary provides an overview of the Environmental Impact Assessment (EIA) for the AES Ocean LNG, Ltd. (AES) project proposed for Ocean Cay and the Biminis, in The Bahamas. AES and the Government of the Commonwealth of The Bahamas are in the process of negotiating a Heads of Agreement; Article 6 of the current Draft of the agreement addresses environmental protection and safety and requires AES to prepare an EIA. This EIA was prepared to satisfy the evaluation criteria of The Bahamas Environment, Science and Technology (BEST) Commission, and has been developed in consultation with that agency and in accordance with applicable Bahamian regulations as well as in consideration of applicable State of Florida regulations, U.S. Federal requirements and World Bank Guidelines. S.1 Introduction and Objectives AES Corporation, the world’s largest independent power producer, has conceived the proposed project in response to demands for natural gas in South Florida and the demand for alternative supplies of fuel and fresh water in The Bahamas. The project includes: a Liquefied Natural Gas (LNG) plant, a Liquefied Petroleum Gas (LPG) plant, a seawater desalination plant, two undersea pipelines to supply fresh water and natural gas from Ocean Cay to North Bimini (designated as AES Cay Express Pipeline), as well as Ocean Cay employee housing and associated facilities on South Bimini and a 610 mm (24 in) undersea natural gas supply pipeline (designated as the AES Ocean Cay Pipeline) to the U.S. Exclusive Economic Zone (EEZ) boundary. The Ocean Cay Pipeline will interconnect at the EEZ boundary with a new, 610 mm (24 in), undersea natural gas pipeline extending to delivery points in Broward County, Florida (Ocean Express Pipeline). The Ocean Express Pipeline will be constructed and operated by AES Ocean Express LLC, a U.S. affiliate of AES Ocean LNG, Ltd. The major project elements are shown on Figure 1.1. The construction of the project is expected to begin early in 2003 and will be completed within 36 months at an estimated cost of $550 million. The specific objectives of the project are to: ¾ Locate, design and operate the project in a manner that results in minimal impact to the natural and socioeconomic environment of The Bahamas. ¾ Serve the growing demand for natural gas in Florida, which is projected to increase to 2.39 billion cubic feet (Bcf)/day by 2010, and to 4.54 Bcf/day by 2020; ¾ Create benefits for local economies through job creation and services; S-1 10 September 2002 Environmental Impact Assessment AES Ocean LNG, Ltd. ¾ Serve the growing demand for alternative fuel supply and fresh water to the Biminis as well as other viable markets in the Bahamas; ¾ Distribute separated LPG to the US aftermarket by ship transfer; and ¾ Comply with all Bahamian regulations, with reference to appropriate U.S. Federal and State of Florida requirements, including constructing and operating the project to standards no less stringent than the regulations placed on a similar facility located in the United States. AES has undertaken extensive studies of the natural and cultural resource environment on Ocean Cay and at locations along the proposed pipeline routes to define existing conditions in the project area. Starting in the Fall of 2001, AES initiated wave and weather studies, geophysical and video surveys of the underwater routes, and marine and terrestrial biological assessments. Archeological assessments, various engineering studies, and emissions modeling (air, water, noise) were performed in the area surrounding Ocean Cay and along the proposed pipeline routes. The methodology and results of these studies are presented and discussed within this EIA. The EIA also presents a detailed description of the project facilities, a summary of project construction methodologies, operational characteristics, an assessment of the potential environmental impacts, a description of environmental impact mitigation measures, an evaluation of alternatives to the project as proposed, and the framework for public review and comment on the project. S.2 Project Description The proposed LNG facility, discussed in greater detail in Section 2 of the EIA, will be located on Ocean Cay, situated approximately 30 km (18 mi) south of South Bimini island and 80 km (50 mi) east of the coast of Florida. The facility will receive LNG from ocean-going LNG tankers, store it, remove LPG from it, re-gasify it, and deliver natural gas via pipeline to Florida and North Bimini. LNG will be delivered to Ocean Cay in LNG tankers having various capacities, with the facility able to accommodate ships with storage capacities up to 160,000 m3 (1 million bbl). In addition to the facilities located on Ocean Cay, an undersea pipeline will be constructed to deliver natural gas from Ocean Cay to the EEZ boundary with the U.S., and ultimately to a location near Fort Lauderdale, Florida by the Ocean Express Pipeline as described above. Two undersea pipelines will also be constructed from Ocean Cay to North Bimini, one to deliver natural gas and the other to deliver fresh water. The pipeline routes are shown on Figure 1.5. A small portion of the natural gas produced at the facility will be used as fuel for generating electricity to be utilized on-site. S-2 10 September 2002 Environmental Impact Assessment AES Ocean LNG, Ltd. The facility will also extract LPG from the LNG for export via ocean-going LPG tankers. The LPG tankers will have storage capacities ranging from 29,000 to 80,000 cubic meters (m3) (182,000 to 500,000 barrels (bbl)). There are expected to be 150 LNG and 50 LPG shipments per year. The primary daily production of the LNG facility will be about 22.7 million cubic meters per day (mmcmd) (800 million cubic feet per day (mmcfd)) of natural gas via pipeline to Florida and up to 5,565 cubic meters per day (cmd) (35,000 bbl/day) LPG. The facility is also capable of delivering up to 77,000 cmd (2,719,210 cubic feet per day (cfd)) of natural gas and approximately 1893 cmd (500,000 gallons per day (GPD)) of fresh water to North Bimini. Project improvements at Ocean Cay are discussed in detail in Section 2 and shown on Figure 1.4. A three-dimensional depiction of the completed facility is presented on Figure 5.5. Improvements that will support the tanker operations include expanding and deepening the existing approach channel and turning basin, installing berths, and providing loading and unloading facilities for the LNG and LPG terminals. Improvements that will support the LNG and LPG facilities will include: expanding the size of this man-made island, building two LNG storage tanks and one LPG storage tank, constructing LNG and LPG processing facilities, installing a once-through seawater system for process heat exchange, building a desalination plant and installing an electrical generating plant. Ancillary facility construction that supports the project will include airstrip improvements, a worker hostel on Ocean Cay and permanent employee housing on South Bimini. S.3 Operational Framework and Procedures As discussed further in Sections 2, 3 and 4, the project will be designed, constructed and operated in conformance with applicable environmental and safety requirements, and standards and guidelines set forth by The Commonwealth of The Bahamas, the World Bank, the U.S. Environmental Protection Agency and the State of Florida. An Environmental Management Plan (Section 10) has been created to describe the extensive environmental protection strategies that will be employed at the site, and to document planned emergency response actions in the unlikely event of spills or releases to the environment. The Environmental Management Plan addresses safe transfer and storage of liquid fuels and other petroleum products, as well as safe management of chemicals and waste products. It sets forth procedures for monitoring and documenting wastewater and stormwater discharges and air emissions. Contingency plans are also provided for possible natural hazards, such as hurricanes, and for accidental release of contaminants to the environment. S.4 Baseline Description of the Project Environment S-3 10 September 2002 Environmental Impact Assessment AES Ocean LNG, Ltd. Ocean Cay is a man-made island, developed in approximately 1970, encompassing approximately 38 hectares (95 acres). Reports indicate that Ocean Cay was created adjacent to two small islets by using slurry dredging techniques, whereby sand and gravel were removed from the ocean floor and pumped to the eastern side of the islets. The island currently serves as a base of operations for an aragonite mining and processing facility. The proposed 610 mm (24 in) diameter natural gas pipeline will depart from the western shore of Ocean Cay and extend westward to Florida along the route shown on Figure 1.1. Benthic habitats along the pipeline route in the survey area are primarily soft bottom/sand habitats with low diversity of benthic macrofauna. At some locations along the proposed route, there are small, isolated patches of seagrass and a few isolated patches of reef, rubble and soft corals. Marine habitats along the 60 mm (2 in) and 219 mm (8 in) diameter pipeline route to North Bimini are predominantly areas of soft bottom/sand with less than ten percent vegetative cover, though a small portion of the route is soft bottom/sand with up to fifty percent seagrass cover. Section 4 of the EIA contains extensive information describing and characterizing the natural resources and existing environment of the project area.