Daily GPI / NGI All News Access / Liquefied Natural Gas (LNG)

Oregon LNG Seeks Partner/Tolling Customers

While the Columbia River-based Oregon LNG project to import/export shale gas supplies from British Columbia (BC) has quietly filed for a permit from the National Energy Board (NEB) in Canada, it is still searching for the right mix of partner/customers that can give the $6 billion venture a realistic chance of being completed before 2020.

Oregon LNG CEO Peter Hansen told NGI on Wednesday that he is not seeking contracts with BC producers because his project's future equity partners and/or tolling customers will ink their own supply deals. Hansen refuses to speculate on when the project at the mouth of the Columbia River at Warrenton, OR, might land some partner/customers, and whether that could happen this year.

The backer of the other Oregon LNG export project, Calgary-based Veresen Inc., last September filed a NEB application for a long-term license to export natural gas from Canada to the United States to supply its proposed Jordan Cove LNG project at Coos Bay, OR (see Daily GPI, Sept. 12, 2013). The application requests an export volume of 1.55 Bcf/d for 25 years, which would translate into 9 million metric tons/year (mmty), but the project still has no equity partner/tolling customers locked up.

Hansen said his project is talking with potential backers and tolling customers in the United States, Canada, and among the Asian nations that are in the market for long-term LNG supplies.

Given the outstanding Canadian and U.S. federal, state and local permitting still pending, Oregon LNG is on schedule to export BC supplies through its terminal by 2019, said Hansen, adding that the recent three-month extension on state coastal permitting will not push back that schedule.

"We agreed to sign a three-month stay-agreement with the Oregon Department of Land, Conservation and Development (DLCD) to give the state agency three more months to review our Coastal Zone Management Act (CZMA) application that was already deemed complete as of July 3 last year," Hansen said (see Daily GPI, Dec. 31, 2013).

"By statute, DLCD has six months in which to review and approve/disapprove our application [meaning without the stay the deadline would have come at the beginning of this year]."

Both Hansen's project, backed 80% by a Wall Street investment firm, Leucadia National Corp., and Jordan Cove are looking to be conduits for getting the robust BC shale gas supplies to Asian markets before 2020. Both have related pipeline projects to reach interstate pipelines with ties to western Canadian, but Oregon LNG's line is much shorter, stretching about 87 miles northeasterly to a point in the state of Washington, compared to the 232-mile Pacific Connector pipeline Jordan Cove proposes to build through southern Oregon.

Both projects contend that they can move the BC supplies to Asian markets quicker and cheaper than the many other coastal export projects proposed in BC itself, each of which involves long and costly pipeline connections, the two Oregon project backers have argued (see Daily GPI, Oct. 11, 2013).

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