While acknowledging that the global liquefied natural gas (LNG) market is hurting, the Canadian-based backers of the proposed $7.5 billion Jordan Cove LNG export project along the south-central Oregon coast said Thursday their project continues to move ahead as it awaits a final FERC approval.
Calgary, Alberta-based Veresen Inc. CEO Don Althoff pointed to "steady progress" last year by the longstanding Jordan Cove project, including a final environmental review by the Federal Energy Regulatory Commission (see Daily GPI, Sept. 30, 2015). Althoff spoke on a quarterly earnings conference call in which Veresen recorded adjusted net income of $15 million (5 cents/share), compared to $9 million (3 cents) for 4Q2015.
Althoff called the Jordan Cove project, which aims to sell Canadian and U.S. Rockies gas supplies to Asian markets, "a very attractive project for Veresen even in the context of today's global LNG dynamics."
The FERC final environmental impact statement (EIS) on the export terminal and connecting pipeline was cited as a key regulatory milestone last year in the midst of other steady progress. Veresen now expects FERC's final order for the project to come "in due course," Althoff said.
"Based on the conclusions in the final EIS, we are comfortable with the mitigation conditions recommended," said Althoff, noting a team in Houston is now finalizing the plant's design and engineering, procurement, construction (EPC) contract.
Althoff thinks the current downturn in capital markets has created "an opportunity to optimize capital costs for the project and improve the strength of the terms in the EPC contract.
"Commercially, Jordan Cove is also making good progress in finalizing the key terms to strengthen the EPC contract," Althoff said. "We are in the process of finalizing term sheet agreements with an initial lead customer."
He said Veresen at the same time is having negotiations with other customers, which also are progressing.
Jordan Cove expects to get supplies from both Western Canada and the U.S. Rockies. It is seeking a Canadian National Energy Board (NEB) export license. Project backers have told the NEB that most and potentially all of its LNG will be made from Canadian-sourced gas.
Veresen-Jordan Cove's target supplies can travel most of the way to the proposed Oregon terminal on current export legs in the TransCanada and Spectra pipeline systems between BC, Alberta and the U.S. Pacific Northwest. Its proposed Pacific Connector pipeline link will interconnect with the established pipeline grid at Malin, OR, near the Oregon-California border, a hub for both Canadian and Rockies supplies.
Jordan Cove, if built and operated, would be among the largest commercial ventures in Oregon's history, with the capacity to export up to 1 Bcf/d. A second export project, Oregon LNG, at the mouth of the Columbia River on the Oregon side, is still awaiting its final FERC EIS, after finishing a series of public hearings on its draft EIS last year (see Daily GPI, Aug. 6, 2015).