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FERC Denies Rehearing Request for Jordan Cove LNG Project

FERC dashed the prospects for a U.S. West Coast liquefied natural gas (LNG) export project when it rejected Friday a request for rehearing of the Jordan Cove LNG project along the south-central Oregon coast.

The project had been turned down by the federal regulators earlier this year.

Calgary, Alberta-based Veresen Inc.'s rehearing request, submitted in April, was turned down "without prejudice," meaning the Canadian backers of the $7.5 billion LNG export project and connecting 232-mile transmission pipeline could submit a new application if a market need for it can be demonstrated.

Veresen officials said they plan to review all of their options, including an appeal or new application to the Federal Energy Regulatory Commission.

"Veresen remains committed to this important energy infrastructure project," said Veresen CEO Don Althoff. "We are very disappointed by FERC's decision, especially in light of the significant progress that has been made in demonstrating market support for the project and the strong showing of public support for the project."

Althoff said Jordan Cove would provide significant economic benefit to Oregon. "The company will provide an update on its strategy to advance the Jordan Cove LNG project at an appropriate time in the future," he said.

FERC said that its March 11 rejection order against the Jordan Cove application was the correct decision and, therefore, it would not reopen the record and consider evidence filed subsequent to the initial decision, as the request for rehearing did not demonstrate the existence of "extraordinary circumstances."

In it initial rejection in March, FERC indicated that the public benefits from the proposed Pacific Connector pipeline did not outweigh its potential for adverse impacts on landowners and communities. Last year, FERC delayed a final environmental assessment because of concerns locally over part of the proposed route by the pipeline, which is a partnership between a unit of Veresen and the Williams Companies Inc.

Sen. Cory Gardner (R-CO) blasted FERC for its denial of another chance for the more than decade-old proposal for Jordan Cove LNG facilities and Pacific Gas Connector pipeline.

"Once again, FERC has shut down [Veresen's proposed] pipeline, and prevented [its backers] from getting the assistance they need to open the facility to be able to export LNG to our allies," Gardner said. "This is nothing more than a misguided attempt to stop exporting LNG completely, a common sense energy resource, out of the Rockies to our allies in the West."

Natural gas producers in Colorado and prospective Asian energy buyers had urged FERC to grant the rehearing for a project that they have supported for some time. Japan's electric utility joint venture and a major national energy buying force, JERA Co. Inc., and the West Slope Colorado Oil and Gas Association urged FERC in October to move the stalled project forward. In contrast, Oregon Gov. Kate Brown has shied away from taking a position on the project, which was originally proposed 12 years ago as a LNG import project.

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