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Jordan Cove LNG Export Backers Seek FERC Rehearing, Cite Terminal, Pipe Deals

With initial signed agreements for half of its proposed liquefied natural gas (LNG) export project's capacity, Veresen Inc. said Monday it has filed with FERC for rehearing of a rejection of the Jordan Cove terminal and supply pipeline in Oregon.

Citing new terminal and pipeline agreements, Calgary-based Veresen said Jordan Cove Energy Project, LP and Pacific Connector Gas Pipeline, LP have asked the Federal Energy Regulatory Commission (FERC) to reconsider its order last month denying the companies' applications for authorization to construct and operate the LNG terminal and connecting 232-mile, 36-inch diameter gas pipeline (see Daily GPI, March 14).

On March 11, FERC rejected the proposed $7.5 billion Jordan Cove LNG export project, citing problems with the Pacific Connector pipeline link to tap western Canada and U.S. Rockies supplies, along with the project's lack of contracts from buyers. At the time, Veresen vowed to file for a rehearing of the decision, and subsequently has lined up to preliminary market deals.

On Friday, Veresen struck a preliminary agreement for more capacity at the proposed Jordan Cove terminal at Coos Bay, OR, as ITOCHU Corp. tentatively agreed to purchase 1.5 million tonnes per annum (mtpa) of liquefaction capacity for a 20-year term (see Daily GPI, April 8). That followed an agreement last month between Veresen and JERA Co. Inc. (see Daily GPI, March 22). Veresen said 3 mtpa of liquefaction capacity of the project, or half, is spoken for.

In addition, Pacific Connector recently executed natural gas transportation service precedent agreements (TSPA) with Macquarie Energy LLC, Avista Corporation and JCEP, which in aggregate represent more than 75% of the rated capacity of the pipeline, a Veresen spokesperson said. Avista is a local distribution company which serves communities along the pipeline. The other two TSPAs are intended to facilitate the transportation of natural gas to the Jordan Cove LNG terminal.

In the request for rehearing, Jordan Cove and Pacific Connector asked that FERC consider the agreements with customers of the LNG terminal and shippers on Pacific Connector as evidence of market support for the projects, and said that the public benefits of the projects outweigh the acknowledged potential adverse impacts on landowners.

"[These related projects] will bring significant and lasting benefits to Coos County [OR] as well as communities all along the pipeline route," said Veresen CEO Don Althoff. "We continue to see an outpouring of support from project proponents at each of the local, state and national levels."

FERC has 30 days to grant or deny the request for rehearing. FERC may grant rehearing, deny rehearing or grant rehearing solely for purposes of extending the 30-day deadline, followed by an order on the merits at a later date, Althoff said.

The Jordan Cove LNG project is expected to have an initial design liquefaction capacity of approximately 6 mtpa, or about 1 Bcf/d.

Jordan Cove is a wholly-owned subsidiary of Veresen. Pacific Connector is owned equally by a subsidiary of Veresen and a subsidiary of Williams Partners LP.

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