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Western Slope Operators Rally Behind Jordan Cove LNG

With an overseas market in sight for their under-developed reserves, producers and pipeline operators that work on Colorado’s Western Slope are rallying around the proposed $7.5 billion Jordan Cove liquefied natural gas (LNG) export terminal and pipeline in Oregon.

Calgary-based Veresen Inc. filed for a rehearing last Monday at FERC, citing viable market interest, after the Commission last month denied approval (see Daily GPI, April 11).

Since then, Colorado stakeholders have peppered the Federal Energy Regulatory Commission with filings in support for the project that would be cited along the south-central coast of Oregon at Coos Bay.

The West Slope Colorado Oil and Gas Association (COGA) and its members want approval for the 6 million metric ton/year liquefaction terminal and 232-mile Pacific Connector transmission pipeline to allow U.S. Rockies and Western Canadian gas supplies to flow to Asian markets.

Later this month (April 21-22) West Slope COGA plans to host the Jordan Cove project managers and representatives of two Japanese gas buyers that have signed preliminary agreements.

"These project managers are coming to Grand Junction to meet with elected leaders in the region and the chambers of commerce economic development groups," West Slope COGA executive director David Ludlam told NGI on Tuesday.

The upcoming meeting is an "extension" of a trade mission-like trip made to Calgary last year by Colorado officials from the Western Slope to meet with Veresen (see Daily GPIOct. 6, 2015). Elected officials in natural gas-rich Garfield County in the Piceance Basin also last year wrote FERC urging expedited approval of the proposed Jordan Cove project, and they have again urged the Commission to reconsider its rejection (see Daily GPIMarch 14).

Colorado Gov. John Hickenlooper last Monday also wrote FERC Chairman Norman Bay urging that Veresen's request be reheard, noting that Jordan Cove could provide U.S. gas producers "direct and efficient access" to Asian Pacific countries, the "fastest growing LNG market in the world."

Hickenlooper said the Oregon projects "have clearly demonstrated" the Asian market demand in its two recent announcements on preliminary agreements with JERA Co. Inc. and  ITOCHU Corp., a domestic trader, import/export, and overseas trader of numerous products  (see Daily GPIApril 8).

Similar letters of support have come from various Oregon organized labor organizations, including the state Building and Construction Trades Council, the Oregon Business Council, as well as landowners whose holdings are adjacent to the proposed terminal site.

Kinder Morgan Inc. (KMI) CEO Steven Kean also urged FERC to let the projects "continue to move forward without further delay." KMI holds a stake in the Ruby Pipeline from Opal, WY, to Malin, OR, where the Pacific Connector pipeline intends to tie in.

"KMI and Ruby eagerly await the anticipated sale of the remaining capacity of the LNG facility and the corresponding sale of pipeline capacity on the Pacific Connector pipeline, but do not believe the lack of current commitments should be the basis for placing [the projects] back to the starting line [in federal permitting]," Kean said.

Citizens Against LNG Inc., claiming to represent up to 5,000 residents and workers in southern Oregon, thanked FERC for its initial denial of the project and urged regulators to look carefully at what it alleged is "misinformation" in many of the support letters.

"The preliminary agreements that Jordan Cove has signed with JERA and ITOCHU Corp. are just that -- 'preliminary'," said executive director Jody McCaffree.

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