Claiming two Oregon state departments are putting the project in a legal box, proponents of the proposed Pacific Connector Gas Pipeline, the link to a proposed liquefied natural gas (LNG) terminal, recently filed a lawsuit alleging the departments are undermining federal authority.

In an action filed in the U.S. District Court in Eugene, OR, Pacific Connector, with offices in Salt Lake City where one of the project's backers, Williams Pipeline, is located, contends that the state is requiring the pipeline proposal to be approved by about 220 private landowners over whose property the 234-mile, 36-inch diameter 1 Bcf/d pipeline is projected to cross. The departments of State Lands and Land Conservation Development want the individual approvals before processing the pipeline's application for a removal-fill permit.

Pacific Connector attorneys are calling it a "legal Catch-22."

The lead authority on natural gas transmission pipeline construction rests with the Federal Energy Regulatory Commission (FERC), which approved both the Jordan Cove LNG terminal and the related Pacific Connector pipeline projects last December (see Daily GPI, Dec. 18, 2009). FERC could grant Pacific Connector eminent domain powers, but it cannot do so until the project gets the necessary state permits.

Pacific Connector was described in press reports as arguing that Oregon is illegally pre-empting federal law as represented by the FERC jurisdiction.

The proposed pipeline would make connections with a number of existing gas pipelines near Malin, OR, including Williams' Northwest Pipeline near Myrtle Creek, Avista Corp.'s distribution system near Shady Cove, Pacific Gas and Electric Co.'s transmission system, Tuscarora Gas Transmission's system and Gas Transmission Northwest's system.

Pacific Connector said previously it had entered into agreements with seven customers for the full capacity of the pipeline. The proposed pipeline is a limited partnership of Williams Pacific Connector Gas Pipeline LLC, PG&E Strategic Capital Inc. and an affiliate of Fort Chicago Energy Partners, Fort Chicago LNG II US LP.

State officials are not commenting on the lawsuit. Pacific Connector Project Manager Derrick Welling was not immediately available for comment. Opponents of the LNG terminal and pipeline have characterized the court filing as another indication that local opposition is frustrating the pipeline proponents.

Jordan Cove is one of two LNG receiving terminal proposals still active in Oregon. The other is an Oregon LNG proposal for a terminal at the mouth of the Columbia River near Warrenton, OR. Earlier this year the seemingly most advanced project, the FERC-approved Bradwood Landing , was dropped, and its Houston-based sponsors, NorthernStar Natural Gas Corp., filed for bankruptcy (see Daily GPI, May 6).

Company officials cited the extended permitting delays and a "difficult investment environment" as the primary causes. Both are factors for the remaining two projects, as the Pacific Connector lawsuit attests.

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