The latest entrant in the competition to site a liquefied natural gas (LNG) receiving terminal in Oregon has big plans and a five-year timetable for siting a tolling facility at the mouth of the Columbia River with potential sources of LNG being literally worldwide, according to one of the two principal executives running Oregon LNG, Mohammed Alrai, senior vice president, who spoke to NGI last Friday.
Earlier this month Oregon LNG, a unit of Leucadia National Corp., confirmed it was beginning the pre-licensing review phase with the Federal Energy Regulatory Commission (FERC) to build a 117-mile pipeline along the Oregon side of the Columbia River that would link the proposed LNG terminal near Warrenton, OR, with the major interstate pipelines traversing Oregon's Interstate 5 corridor (see Daily GPI, June 12).
Alrai said Leucadia National, although public, is essentially controlled by a set of private equity investors. They formed Vancouver, WA-based Oregon LNG to pursue a receiving terminal after the fledgling company last January obtained the management and development rights from Chapter 11-bound Calpine Corp.'s Skipanon project. Alrai was part of the Skipanon project management that came with the purchase.
A 96-acre site was originally leased by Calpine from the Port of Astoria, OR, and a long, local site rezoning process was completed successfully last October. The City of Warrenton approved the rezoning to allow the building of an LNG terminal, and all appeals now have been exhausted. Oregon LNG considers the local permitting process complete.
Oregon LNG expects to get through the FERC process by early in 2009, and be able to begin a three-year construction process by mid-2009, Alrai said. That would call for beginning operations of a $1 billion, 1 Bcf terminal some time in 2012, with the option of expanding it to 1.5 Bcf, depending on the market interest.
"We hope to be a major player in the Pacific Basin," said Alrai, who added that he was concentrating on looking at potential sources of the LNG, talking to producers who are located around the world, from Australia to Qatar with South America in between. Another former Calpine LNG project manager, Peter Hansen, is concentrating on the terminal siting work, he said. Although he did not want to talk about any specifics, Alrai said they are talking to all of the major gas producers.
With its private equity backing, Oregon LNG has sufficient funds -- in the $30 million to $40 million range -- to carry out the permitting for the project. The project will be financed later, with an estimate of $700 million for the terminal and $300 million for the connecting pipeline from the coast to the major north-south interstate transmission pipelines.
Oregon has four other active proposals for LNG terminals -- three upstream along the Columbia River in Oregon and one at Coos Bay along the southern Pacific Coast of the state. The latter project, Jordan Cove, was slated to make a filing this month to FERC, but has since delayed it until September (see Daily GPI, June 13).
A project farther in from the coast and along the banks of the Columbia, Northern Star Natural Gas Co.'s Bradwood Landing, is the furthest along in the permitting process, and in March it received a favorable U.S. Coast Guard report, saying the lower Columbia River is suitable for LNG deliveries as long as several safety and security conditions are met.
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