Bechtel Scraps Power Plant Plans

Bechtel Enterprises Holdings made the announcement Thursday, two weeks after Shell U.S. Gas & Power withdrew as a partner in the 900-megawatt power station and liquefied natural re-gasification plant.

When Shell Gas and Power announced that it was pulling out of the partnership with Bechtel Enterprises to build the facility at the southern end of the island, Vallejo officials said that they opposed the Mare Island project.

Vallejo's City Council is scheduled to vote Tuesday on a resolution accepting both companies' decision to withdraw and terminating further discussions and negotiations regarding the LNG power plant project.

In a letter to Mayor Tony Intintoli on Thursday, Doug Brown, Bechtel's vice president for Power Development, cited continuing uncertainty in the energy sector and general economy as reasons for the company's decision. "Furthermore, unfolding international events are now complicating those conditions," he added. "Consequently, under present circumstances, we have concluded that we cannot carry out meaningful discussions with the city, nor with potential partners, and we are suspending all work on the project at this time."

A citizen's group strongly opposed the $1.3 billion project from the onset, citing fears it would be a target of a terrorist attack and other health and safety concerns.

When Shell announced its departure from the project, Intintoli and City Manager David Martinez said the project was dead.

"My reading of the health and safety report has led me to conclude that the construction of such a facility in close proximity to a populated area is not appropriate," says Intintoli. "The study indicates to me that there is a moderate chance of a maritime accident occurring within the vicinity of the proposed terminal that would likely affect populated areas of Vallejo."

According to city officials, Bechtel's announcement is expected to lead to a unanimous vote by the council to terminate any further discussions.