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FERC Takes Third Oregon LNG Proposal

November 3, 2008
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FERC last Monday accepted a third application for a liquefied natural gas (LNG) receiving terminal in Oregon, the proposed Oregon LNG project near the mouth of the Columbia River on the Skipanon Peninsula in Warrenton, OR. Project backers are proposing a $1.3 billion facility, which has cleared most of its local permitting hurdles.

Oregon LNG filed its application with the Federal Energy Regulatory Commission (FERC) Oct. 10, noting that it was staying on schedule and the extensive application demonstrated the project, originally conceived by a part of the independent power plant operator/developer Calpine Corp., was feasible and should be approved.

FERC posted acceptance of the application last Monday, and the project already has completed local land-use approvals, according to Oregon LNG CEO Peter Hansen, who originally helped launch the Skipanon project at Calpine.

"Our FERC applications included extremely detailed and specific studies on every aspect of the project," Hansen said. "FERC's response confirms that our studies meet the standards of the federal approval process."

Hansen said he expected FERC to issue a draft environmental impact statement (EIS) in the first quarter next year, and a final EIS in mid-2009. Construction is expected to begin in 2010 but won't start until the company has sufficient tolling agreements with LNG shippers/marketers in place.

Hansen said earlier in October that the company would begin another round of negotiations with potential capacity customers (upstream and downstream shippers). He began the now $1.3 billion project in 2004 as the head of western development for Calpine, and then following the power plant developer's Chapter 11 bankruptcy filing in late 2005 he led a small group of management to purchase the development rights, along with publicly held funding partner Leucadia National Corp., a New York City-based diversified holding company.

From the beginning, Oregon LNG has applied a different approach to the permitting, focusing on securing local approvals first and then moving to the federal process, and as a result the company has the only LNG project in Oregon that has received its land-use approvals and successfully completed the appeals process, it said.

Oregon LNG claims its site on the ocean-side of the Astoria Bridge, a four-mile expanse over the mouth of the Columbia River, which links Washington and Oregon, is ideal from a shipping standpoint because there is little or no navigation of the river required. The site was taken over for LNG development in 2004 (under Calpine) and at the time had to go through what Hansen called a "comprehensive plan" for the zoning change.

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