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Jordan Cove Does Not Rule Out Possibility of Exporting LNG

Pointing out that they have not sought authorization to export liquefied natural gas (LNG), Jordan Cove Energy Project LP and the associated Pacific Connector Gas Pipeline have called on FERC to deny a third-party request that the agency either conduct a supplemental environmental analysis of the projects or terminate their certificates.

Jordan Cove was certificated as an LNG import facility in late 2009 (see Daily GPI, Dec. 18, 2009), but the U.S. LNG import market has slowed down considerably since then due to the onslaught of domestic shale natural gas supplies. Jordan Cove does not rule out the possibility that it may seek to become an LNG export facility in the future because of the shift in the market, but it stressed that it has not yet filed an export application with the Federal Energy Regulatory Commission (FERC).

In early June an attorney for Western Environmental Law Center (WELC) told FERC that "such a significant change in the fundamental purpose of the project warrants at least supplemental NEPA [National Environmental Policy Act] analysis if not outright termination of [the] Jordan Cove" facility and pipeline project. Failure to do a supplemental NEPA analysis would be "arbitrary, capricious and not in accordance with NEPA," the center claimed (see Daily GPI, June 14; June 9).

To justify its request for a supplemental NEPA review or project termination, WELC argued that Jordan Cove and Pacific Connector allegedly are considering amending their business plans to use the LNG terminal and pipeline as export facilities [CP07-444]. However, Jordan Cove and Pacific Connector countered that they " have not...made any filing with the Commission (or any other agency) proposing to take such action."

They further noted that FERC staff "previously rejected similar requests that it consider use of the terminal for exports in its responses to comments filed on the draft environmental impact statement...It also made clear that because Jordan Cove had applied only to construct and operate an LNG import terminal, 'the Commission would only consider that action...Jordan Cove would not be allowed to export LNG under this application.'"

There is "no basis for a different conclusion now," Jordan Cove and Pacific Connector said. "If at some point in the future Jordan Cove and [Pacific Connector] decide to seek to modify their projects to accommodate LNG exports as well as imports, they would be required to make a formal filing with the Commission requesting authority to do so.

"In the absence of such a filing, however, there is no reason for the Commission to undertake a supplemental NEPA review or take any other action with respect to the matters raised in WELC's submission."

In May Veresen Inc., a Canadian firm with a controlling interest in the Jordan Cove/Pacific Connector project, announced plans to explore "alternative uses" for the project, namely utilizing the facilities as an export pipeline and terminal, said Susan Jane M. Brown, staff attorney for WELC.

Backers of the Jordan Cove LNG facility and connecting transmission pipeline at Coos Bay, OR, have been encouraged by players in the western natural gas market to change the project to an LNG export facility in the same way that backers of the Kitimat LNG proposal in British Columbia transformed that project (see Daily GPI, March 22).

Geared for a 1 Bcf/d terminal capacity connected to the proposed 1.2 Bcf/d Pacific Connector, Jordan Cove is a limited partnership of an affiliate of Alberta-based Fort Chicago Energy Partners LP and Energy Projects Development LLC, proposing to build the terminal at Coos Bay's international port. Fort Chicago and units of PG&E Corp. and The Williams Cos. are partnering on the Pacific Connector project.

Jordan Cove has conditional approval from FERC for its terminal as does the affiliated Pacific Connector pipeline, which would be needed for any LNG export project. The backers would have to go back to FERC to get the go-ahead for an export facility.

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