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Second Oregon LNG Project Seeks Import/Export OK

Oregon LNG, the liquefied natural gas (LNG) import project proposed for the mouth of the Columbia River at Warrenton, OR, has asked FERC for permission to switch to a bidirectional import-export project and has signed an agreement with Williams' Northwest Pipeline Co. to expand the capacity of lines bringing Canadian gas into the Pacific Northwest. It is the 14th U.S. project seeking an export permit to cover all nations.

After hanging back behind Jordan Cove, a competing Oregon LNG project that requested the same switch last year (see NGI, March 26), Oregon LNG is now a $6 billion undertaking, compared to an import project that previously had been calculated to cost $1.2 billion, project manager Peter Hansen told NGI last Thursday. A pre-filing for the revised project was recently submitted to the Federal Energy Regulatory Commission (FERC). Northwest Pipeline will also participate in FERC's pre-filing process so that the terminal and all related pipeline work can be handled under one environmental review, according to Hansen. He said Oregon LNG hopes to get final FERC approval by the end of next year.

"There is an awful lot of interest in export projects from the United States, particularly from the West Coast," said Hansen. Pacific Northwest locations have a big advantage over projects slated for the Gulf of Mexico (GOM), he said, because the shipping time to Japan, for example, is half as long as it is for GOM export terminals (nine-10 days from Oregon versus 22-34 days from GOM).

"We have direct access to huge supplies of Canadian gas with a nine- to 10-day sailing time to the Asian market, which is the best LNG market in the world. The Pacific Northwest is a perfect shipping location for LNG."

Oregon LNG has received authorization from the U.S. Department of Energy to export to free-trade agreement (FTA) nations, but it still needs to apply and obtain authorization to export to non FTA nations. The project already has the approvals it needs from Oregon's Department of Energy, Hansen said. Hansen signaled Oregon LNG's change of plans and the potential for a deal with Williams' interstate pipeline in April (see NGI, April 30). If everything works as planned, Hansen said the Oregon LNG facility would be exporting LNG to the Asia Pacific in 2018.

"We're maintaining a good part of the old [proposed import] facility so that we can import if necessary," Hansen said. "We're maintaining the capacity of being able to regasify what is ever in the tanks and send it back out into the system." What will be added is a 9 million tons/year liquefaction plant, drawing on a 1.25 Bcf/d, 36-inch diameter transmission pipeline that will interconnect with the enhanced Northwest Pipeline lines at Woodland, WA, about 25 miles north of Portland.

In addition to adding billions of dollars worth of liquefaction facilities at the proposed Warrenton site, Oregon LNG has revised it proposed interconnecting pipeline to shorten it, cross the Columbia River and run easterly on the Washington side of the river for most of its now 86-mile route. The original proposal called for a 130-mile pipeline that ran easterly on the Oregon side of the river.

Oregon LNG's newly signed agreement with Northwest Pipeline calls for the LNG project backers to pay for all of the pipeline company's regulatory processing fees for the completion of an upgrade of two pipelines running from the Canadian border to Woodland, roughly paralleling Interstate Highway 5. The upgrades, estimated by Hansen to cost $650-$750 million, would provide two parallel 30- and 36-inch diameter pipelines to carry British Columbia and Alberta gas for export.

Pursued by a group headed by Fort Chicago Energy Partners for a half-dozen years and holding a conditional approval for an LNG import facility and connecting 230-mile transmission pipeline, Jordan Cove entered the export sector last year and won some preliminary approval for exporting to designated favored nations from DOE (see NGI, Jan. 16).

Hansen said there is plenty of room for two LNG export facilities in Oregon because the potential supplies coming out of Western Canada in the years to come are expected to be huge and demand among Pacific Asian nations is going to be substantial. He also thinks that Oregon LNG costs for getting the supplies to its liquefaction facility are going to be much lower than rivals on either side of the international border.

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