MANATEE -- For the Port Dolphin Energy terminal, it's all a matter of bad timing.
Delays with the permitting process have pushed the proposed natural gas pipeline off the coast of Manatee into a market where demand has seemingly vanished.
The $850 million pipeline, which would be buried deep under the mouth of Tampa Bay and connected at Port Manatee, was first proposed in 2007. It was slated to open last summer.
But now developers say construction is still a year out, with projections that the project won't be completed until late 2016 or early 2017.
Despite the setbacks, company officials vow Port Dolphin is not dead, and they still see opportunity in a natural gas market where domestic prices have bottomed out.
"All of (Florida's) natural gas demand is imported and supplied from out-of-state sources," said German Castro, vice president of Port Dolphin Energy. "The Florida Public Service Commission projects growing demand for natural gas for use in electric power generation, and new transportation will be required to meet this demand."
The Port Dolphin Energy project calls for a 36-inch offshore natural gas pipeline to be built in water 100-feet deep and about 28 miles southwest of Tampa Bay.
Ships carrying liquid natural gas will anchor at the pipeline, sending the energy through the 42-mile subsea plumbing and into Port Manatee, where it will connect to an existing pipeline on the shore.
The natural gas then would be distributed to power plants across the state. The entire system has been designed so
nobody on a Florida beach could see it, according to Höegh LNG, the project developer.
The infrastructure has the capacity to provide up to 1.2 billion cubic feet of natural gas per day to the region -- enough energy to power several million homes.
When first proposed, the energy terminal faced heavy opposition from environmental groups fearing its impacts. Their efforts forced the developers to alter the pipeline to avoiding crossing the Terra Ceia Aquatic Preserve.
The Norwegian firm also agreed to put $100 million into an escrow account to help renourish corroding beaches, records show.
"Our intent was never to stop the project but to make it the most environmentally non impactful," said Glenn Compton, director of Manasota-88, which became a party to the permit proceedings. "There are benefits to more natural gas, and we see that."
Port Dolphin has obtained all of its state permits. But the pipeline is still battling to satisfy federal requirements, which the company hopes to surmount by the first quarter of 2013.
Höegh said it will have the $850 million needed for construction through a combination of equity and bank credits. The company reported $109.8 million in total income in 2011, up 16 percent from the year before. Höegh has 36.3 million shares outstanding.
But the project has taken so long to get off the ground, questions now have surfaced as to whether the concept is even still viable.
When Port Dolphin was originally proposed, the prices of natural gas in Florida were among the highest in the world, making it profitable to link the Sunshine State with foreign suppliers.
Advancements in natural gas drilling technology, however, have reversed the domestic supply and demand picture, causing the price of natural gas in the U.S. to plummet.
When Port Dolphin was first proposed in 2007, natural gas in the U.S. cost more than $7 per million British Thermal Units, or mmBTUs. Today, the U.S. price is a modest $2.44 -- less than the countries it was being imported from, according to BNP Paribas in New York.
As a result, Höegh now has shifted its focus from foreign producers to those in other states like Louisiana and Texas. The problem is most of those current producers already have means to bring their supply to Florida.
A similar project off the state's East Coast was scratched completely last summer.
"The need for these traditional import facilities has changed," said Teri Viswanath, director of commodity strategy for BNP Paribas in New York. "There's a lot going on in the U.S. right now backed by a near endless supply. But (Port Dolphin) is being very creative in looking for ways to help this project make sense."
Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman.