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Lack of FERC Quorum Not Hurting Jordan Cove LNG Project, Veresen CEO Says

While touting an enhanced ability to complete large-scale projects like the multi-billion-dollar Jordan Cove liquefied natural gas (LNG) export terminal and connecting pipeline with the friendly merger now pending with Pembina Pipeline Corp., Calgary-based Veresen Inc. officials said they are not concerned that the lack of a quorum at FERC will hurt the project’s pending rehearing filing.

Speaking Thursday on a quarterly earnings conference call, Veresen CEO Don Althoff talked more positively about the applications of Jordan Cove after the Federal Energy Regulatory Commission rejected the $7.5 billion, 1 Bcf/d project along the south-central coast of Oregon at Coos Bay.

Althoff said that the Jordan Cove request for reconsideration at FERC should be done by August, and the re-application should be in FERC's hands by August 2018. The currently unfilled vacancies at the Commission won't affect the ongoing process, he said.

The Jordan Cove project, which includes the 232-mile Pacific Connector transmission pipeline, has revised its capital estimates, according to Althoff, resulting in slightly lower costs for the terminal and higher costs for the pipeline linked to the interstate hub at Malin, OR.

"The pipeline is going to be more expensive than originally anticipated, and it includes a bit more of the owner costs that gets developed as we mature the project," Althoff said, adding that the estimated financial returns from the project stay basically the same.

The LNG processing plant now is estimated to cost a little less and have even greater throughput, but neither will require any permitting changes, Althoff said.

On Thursday, members of the U.S. Senate Committee on Energy and Natural Resources, Chairman Lisa Murkowski (R-AK) and Ranking Member Maria Cantwell (D-WA), spoke out against the Trump administration's continuing lack of a quorum at FERC and the White House's failure to have made any nominations in the more than three months.

Meanwhile, on Monday Pembina and Veresen announced a friendly merger, which bids to create a Canadian leader in natural gas, liquids byproducts and oil processing, transportation and storage. The deal calls for Pembina to pay a blend of shares and cash to buy Veresen. The C$9.7 billion (US$7.3 billion) transaction is scheduled to close this summer.

For 1Q2017, Veresen reported adjusted net income of $37 million (12 cents/share), compared to $16 million (5 cents) for the year-earlier period.

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