The developer of a controversial $60 million liquefied natural gas (LNG) plant on a city-owned industrial site in South Philadelphia has pulled back from the project, saying the “opportunity has passed.”

Liberty Energy Trust, a West Conshohocken firm whose Passyunk Energy Center was approved by a divided City Council in 2019 over community opposition, said the firm has moved on from its plan to build the gas liquefaction plant on land owned by Philadelphia Gas Works, the city’s natural gas utility. The plan was first proposed in 2016

“Over the past six years, this opportunity has passed, and the market is looking at new solutions to meet both environmental and economic goals of the city,” Matthew Taylor, a spokesman for Liberty Energy Trust, said in a statement to The Inquirer.

PGW, in its own carefully worded written statement, implied the project was stalled without declaring it dead.

Richard G. Barnes, PGW’s spokesman, said in a statement Monday that Liberty Energy Trust “has not had communications with PGW for several months” and that Liberty Energy wanted unacceptable changes in its deal with PGW. PGW’s website for the public-private partnership is inactive.

The Passyunk Energy Center would produce up to 120,000 gallons of liquefied natural gas a day for sale into commercial markets as fuel for heating or power generation. PGW owns a specialized LNG storage tank on the Passyunk site. It stood to earn a minimum of $1.35 million annually in profits, and potentially up to $4 million, that it said would have helped reduce residential heating bills.

LNG is produced by super-cooling natural gas to minus-260 degrees until it turns into a liquid. It is in great global demand for export, particularly by European buyers who are looking to displace Russian natural gas in the aftermath of the Ukraine invasion. The Passyunk plant would produce a relatively small amount of LNG for domestic consumption, not for export.

» READ MORE: Council approves $60 million LNG plant in South Philly over environmental opposition

Liberty Energy Trust, which is building a $120 million LNG plant called the Northeast Energy Center in Charlton, Mass., was circumspect about how the development project derailed. The Conshohocken firm seemed to leave the door slightly open for any future deals with the city.

Liberty Energy suggested that Philadelphia’s recent exploration of a business diversification strategy to reduce reliance on fossil fuels and reduce greenhouse gas emissions played a role in its decision to pull back from the Passyunk project.

“We’re still here for Philly and are actively working with new technologies in [renewable natural gas], carbon capture, energy storage, and hydrogen that may be part of a broader energy solution for Philadelphia,” the firm said. “The city must choose its policy toward PGW’s future and we will be there to execute on it.”

PGW said in a statement that City Council’s 2019 authorization to negotiate a contract with Liberty Energy required PGW to go forward only if it was in the best interests of the city and its gas customers, and was not risky.

“Unfortunately, as ‘[Liberty Energy Trust] developed their plan and changed many of their assumptions and deal terms, the agreements they offered were not sufficiently acceptable to us or our stakeholders,” PGW said Monday.

City Councilmember Derek S. Green, who chairs the city’s gas commission and ushered through the 2019 legislation authorizing the LNG plant, said the impasse was news to him.

“It is my understanding that both PGW and Liberty Energy Trust are still in conversations regarding the Passyunk LNG facility,” Green said Monday.

“In addition, I would hope that based on the opportunities from the PGW diversification study, as well as the Federal Investment Infrastructure and Jobs Act as well as challenges coming out of the Russian invasion of Ukraine, will provide opportunities to continue the conversations to move toward a goal of having this project come to fruition,” Green said.

City Council, in a 13-4 vote, approved the deal with Liberty in 2019 over objections of community groups and environmentalists, including the Clean Air Council and PennEnvironment.

Opponents fear the plant would generate local pollution and that its operation would enable the production of more natural gas from Pennsylvania’s Marcellus Shale region at a time when the city and the nation should be investing in renewable energy.

PGW was selected for a $2 million state grant in 2019 to install a solar energy system on the Passyunk plant to power the project. The solar project was not built, and the grant money was not dispersed.

LNG is produced at several plants in the region, primarily by gas utilities that use it as a means to store natural gas for distribution to customers on peak winter days. The methane gas takes up much less space when it is stored in liquid form. LNG needs to be warmed to revert to a gaseous state before it is distributed to customers.

Peco owns a liquefaction plant in West Conshohocken. UGI Energy Services has plants in Berks and Wyoming Counties, each about the size of the proposed Passyunk Energy Center.

PGW operates the region’s largest LNG facility in the city’s Port Richmond neighborhood. PGW’s off-system sales of surplus LNG production generated millions of dollars in extra income for the utility, prompting the city to explore expanding LNG production after City Council in 2014 rejected a plan to sell PGW for $1.9 billion.

PGW does not produce LNG now at its Passyunk plant, but it trucks fuel produced at Port Richmond for storage at the South Philadelphia site for winter distribution to its customers. The Passyunk storage tank has surplus capacity, which PGW was essentially renting to Liberty Energy Trust to use for the Passyunk Energy Center.

Liberty Energy, headed by Charles Ryan and Boris Brevnov, was an unsuccessful bidder to develop the Port of Philadelphia’s Southport project in 2016 and bid unsuccessfully to build and operate the Port of Wilmington.

This article was updated with additional information about the proposed solar project on the site.