Jun. 18--PLEASANT POINT, Maine -- The owner of an Oklahoma company that hopes to construct a liquefied natural gas terminal on Passamaquoddy Bay expressed surprise this week that the Passamaquoddy Tribe has voted to terminate its land lease contract with his firm.

Donald Smith, president of Quoddy Bay LNG, said Tuesday that he received a letter Monday from Passamaquoddy Tribal Gov. Rick Phillips-Doyle informing him that the council voted last week to end its relationship with the company. Smith added that he does not think the tribe has legal grounds to terminate the contract.

"I am surprised to receive the letter," he said. "I don't feel the contract has expired."

Smith declined to provide a copy of the letter to the Bangor Daily News.

Tribal Councilor Ed Bassett confirmed Wednesday that on June 9, the council authorized Phillips-Doyle to send a letter to Smith notifying the company that their LNG partnership had ended.

Bassett said the ground lease that the Pleasant Point Passamaquoddy Reservation and Quoddy Bay signed years ago had expired.

"It is very simple," Bassett said in a telephone interview. "We determined that it is expired and we no longer have any legal relationship with respect to the lease."

Bassett said there was language in the lease that made it clear that either side could end the business relationship.

"There is a provision that has a timeline somewhere around four years. If it is not permanent within four years, either party can opt out of the agreement. So it is pretty cut and dry," he said.

Smith contends that the tribe has not upheld its legal obligations under the land lease contract. He said that as a result of a lawsuit brought in 2005 by Nulankeyutmonen Nkihtahkomikumon, a Passamaquoddy group that opposes LNG terminal development on the bay, a settlement was reached by all parties over the federal Bureau of Indian Affairs approval process for the project. The tribe agreed to this settlement in negotiations, Smith said, but never signed off on the formal settlement.

Smith said the tribe is legally required to formalize the agreed settlement.

"I am surprised and I am going to ask the reservation to fulfill its legal obligations," Smith said, referring to the tribal government at Pleasant Point.

Smith said that part of his surprise is based on meetings he had with Phillips-Doyle this past winter. He said the meetings, which were about his firm's continued interest in securing state and federal permits for an LNG terminal on Passamaquoddy Bay, were "productive."

Phillips-Doyle did not return phone messages left requesting comment.