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Jordan Cove Seeks Draft Environmental Nod of LNG Project by July

Jordan Cove Energy Project LP last Tuesday asked FERC to issue a draft environmental impact statement (DEIS) by the end of July so that construction of its proposed West Coast liquefied natural gas (LNG) terminal can be completed in time to attract long-term Pacific Rim supplies.

"While there is no assurance that a draft environmental impact statement will lead to FERC certification, the document, by definition, provides insight as to potential risks and, therefore, the markets assign a great value to the issuance of the DEIS and its implication to project viability," wrote Joseph B. Oris, vice president-commercial director of Jordan Cove, in a letter to the Federal Energy Regulatory Commission (FERC) [CP07-444].

A West Coast LNG regasification terminal would have to be available by either late 2012 or early 2013 in order to secure reliable long-term supplies of LNG, and construction must start no later than mid-2009, he said. To meet this timetable, a DEIS would have to be issued by no later than the end of July, Oris noted. The proposed Jordan Cove terminal would provide natural gas to customers in the Pacific Northwest, Northern California and northern Nevada.

"The global market for LNG supplies has been tight over the past year...While this may remain the case in the near term, there is presently a wave of new liquefaction facilities entering front-end engineering design and final investment decision stages, particularly in the Pacific Rim. These projects could add 22.7 Bcf/d of new liquefaction capacity in the Pacific Basin market by late 2012 and 2013," Oris told the Commission.

"Based on extensive and repeated discussions with developers of these new projects...they well understand that traditional and emerging Asian markets are not capable of absorbing this much new supply in the near to medium term. As a result, in part driven by the need to secure stable long-term markets to support financing, many of these suppliers view the West Coast U.S. market, given its size and liquidity, as strategically important to achieving their objectives."

Jordan Cove Energy, a limited partnership between an affiliate of Alberta-based Fort Chicago Energy Partners LP and Energy Projects Development LLC, is seeking to build the terminal at the International Port of Coos Bay, OR. The project, which faces significant opposition at the state and local level, calls for the construction of a marine berth; two storage tankers with a total 6.4 Bcf of capacity; regasification and sendout capacity of 1 Bcf/d; an electric power plant; and a natural gas liquids extraction facility to recover propane and butane (see NGI, Sept. 10, 2007).

Pacific Connector Gas Pipeline LP proposes to build a 230-mile, 36-inch diameter pipeline to transport up to 1 Bcf/d from the proposed Jordan Cove terminal to markets in the region. The pipeline would interconnect with Williams' Northwest Pipeline near Myrtle Creek, OR; Avista Corp.'s distribution system near Shady Cove, OR; and the systems of Pacific Gas and Electric, Tuscarora Gas Transmission and Gas Transmission Northwest, all located near Malin, OR.

An official with Jordan Cove said the project backers expect more pushback related to the pipeline than they will encounter regarding the relatively small proposed LNG terminal.

Canadian-based Fort Chicago LNG II LP and engineering firm EDP LLC are the backers of the terminal, which is seeking potential sources of LNG as it moves through the permitting/siting process. Fort Chicago also has a stake in Pacific Connector Pipeline as a partner along with units of Williams and PG&E Strategic Capital Inc. The latter trio so far has picked up nonbinding interest in pipeline capacity that the companies say equals 1.5 Bcf/d.

Bob Braddock, Jordan Cove project manager, told NGI that he would like the FERC draft environmental assessment released by the end of July, but it is likely to be a month later since the federal regulatory commission staff has many other LNG and other high-profile energy projects.

Last week FERC issued a favorable final environmental review of Bradwood Landing LLC's proposed LNG terminal in the Pacific Northwest and NorthernStar Energy LLC's associated pipeline project (see related story).

The Pacific Northwest needs a new infusion of natural gas supplies longer term, including LNG imports, according to a variety of industry speakers at a conference held last Wednesday in Portland, OR (see related story).

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