In a move deemed essential to developing Portland’s waterfront, a liquid propane company on Commercial Street in Portland is trying again to relocate its operation to a South Portland rail yard.

NGL Supply Terminal Co. LLC on Tuesday submitted a new downsized site plan to the city of South Portland to build a liquid propane depot at Rigby Yard, an industrial rail site off Route 1.

The company, a subsidiary of NGL Energy Partners of Tulsa, Oklahoma, initially submitted a plan in January for a facility that would include a rail siding and six 60,000-gallon tanks – for a total capacity of 360,000 gallons – for the storage and transfer of liquified propane gas. However, that proposal ran afoul of a city ordinance prohibiting the creation of any “new aboveground storage tanks” that hold more than 25,000 gallons.

NGL’s new proposal reduces the size of the proposed facility to a single 24,000-gallon propane storage tank.

The company’s existing facility in Portland has a total capacity of 280,000 gallons.

“While the storage volumes in our proposed project are less than our existing Portland facility, design changes will allow us to drive greater operational efficiencies,” said

Kevin Fitzgerald, NGL’s regional operations manager. “These changes reflect our commitment to work cooperatively with South Portland and to operate a facility that we believe complies with all existing ordinances.”

NGL is pursuing a new depot in South Portland because the state is forcing it to move. Its current location is the site of a proposed new cold-storage warehouse, part of the expansion of the International Marine Terminal near the Casco Bay Bridge. Fitzgerald said in June that the company has worked with federal, state and local officials to “carefully select” Rigby Yard for the propane depot. He said the project is “motivated by and in direct support of the state’s redevelopment of the Portland waterfront.” Because the state is forcing NGL’s relocation, the state is expected to pay for the move.

John Henshaw, executive director of the Maine Port Authority, which is involved in the International Marine Terminal expansion, was not familiar with NGL’s new application. But he said he believes NGL is still scheduled to vacate its facility on Portland’s waterfront by next spring or summer.

Its departure is important to the timing of the port’s development.

In August, the port authority announced it had awarded a bid to build a modern refrigerated warehouse to Americold, the world’s largest cold-storage company. The project is part of a state-led effort to make the port more competitive with other ports and to boost Maine’s seafood, agriculture, and food and beverage industries.

The warehouse is supposed to be built on a 6.3-acre site at the terminal, half of which is occupied by NGL’s existing facility. Americold expects to break ground on the project in the fourth quarter of 2016 and complete construction in the third quarter of 2017.

“We’ve listened carefully to residents and officials in South Portland and have submitted a revised proposal that we believe conforms to all existing city ordinances,” said Fitzgerald. “The proposed $3 million, state-of-the-art facility is designed to safely meet the high demand for clean-burning propane at over 50,000 homes and businesses throughout the Greater Portland region.”

A COMPLICATED MOVE

NGL’s earlier attempts to shift operations to South Portland had been difficult.

NGL tried earlier this year to convince South Portland officials that its original plan for six 60,000-gallon tanks should not be subject to the city’s ordinance. Consultants hired by NGL argued in May that the propane tanks are not “aboveground storage tanks,” which it said store liquids at normal atmospheric pressure. Instead, the tanks are “pressure vessels” that store liquids above atmospheric pressure and should, therefore, not be subject to the ordinance.

The city hired Portland-based engineering firm Woodard & Curran to make a determination. In a June memo, Woodard & Curran determined NGL’s proposed tanks would not be permitted under existing code.

The company then in August asked the city if it built a single 24,000-gallon tank, would the city council consider granting a waiver for NGL to build a second “accessory” tank of the same size, according to James Gailey, South Portland’s city manager.

But in reviewing the ordinance, the city rejected the request.

“The problem is the second tank would be identical to the first tank so it wouldn’t be considered an accessory,” Gailey said. “One tank can’t be an accessory to the other because it’s the same product.”

The company’s initial proposal also raised some local opposition from neighbors.

Gailey sidestepped a question about whether the city was willing to change its ordinances to allow NGL to build the depot.

“The only comment I would have is that the stance we’re taking is we are more concerned about the health and safety of the abutting commercial district and neighborhoods around that facility,” Gailey said. “That’s our number one concern at this point – the safety aspect of it all.”

Stephen Puleo, South Portland’s community planner, said NGL’s new application appears to address the previous storage concerns, but the city has only just begun the review process. Puleo said a review usually takes up to 40 days, at which time the proposal would be sent to the Planning Board for consideration.

“Their revisions meet those outlined in the Woodard & Curran letter and, based on that, we feel that meets the standard of the ordinance and we’ll process the application based on that,” Puleo said.

If NGL’s depot is approved at Rigby Yard, it would be the third liquid propane storage facility in the city, according to Gailey. There’s one on Lincoln Street, near Interstate 295, and another on outer Broadway, near the Scarborough line.