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DOE OKs Oregon LNG Non-FTA Exports

LNG Development Co. LLC (Oregon LNG) on Thursday got a conditional OK from the U.S. Department of Energy (DOE) to export liquefied domestic natural gas to non-free trade agreement countries (FTA).

The license applies to the Oregon LNG Terminal in Warrenton, OR (see Daily GPI,July 3). Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export at a rate of up to the equivalent of 1.25 Bcf/d of gas, for a period of 20 years.

The project's application was the next in line at DOE before the department proposed procedural changes that if/when implemented would reshuffle the order in which license applications are considered by the department (see related story; Daily GPI,May 29). The Federal Energy Regulatory Commission has yet to issue environmental documents on the project, which is necessary before an ultimate ruling from the Commission on the facilities. The project was docketed at the Commission in June 2013.

Oregon is the sixth such project to receive DOE conditional export authorization and the seventh overall if the first non-conditional license granted to Cheniere Energy's Sabine Pass LNG is included in the tally.

DOE cited Energy Information Administration projections of 2014 domestic gas production in the neighborhood of 73 Bcf/d but said it also considered the fact that Oregon LNG has said a predominant amount of gas to be liquefied and exported from its facility would come from Canada rather than the United States.

"Oregon LNG states that the project will connect to the Oregon Pipeline, which will extend approximately 86 miles to an interconnect with the interstate natural gas pipeline system of Williams Northwest Pipeline Co. (Williams system) near Woodland, WA. Through this interconnect, Oregon LNG anticipates that the project will have access to supply basins in both Western Canada and in the U.S. Rocky Mountains..." the DOE order said.

"Oregon LNG states that it 'does not expect that the gas feedstock for the export project will be derived to any significant degree from Rockies supply given that the market modeling commissioned by Oregon LNG demonstrates that Canadian supply is the economically preferred resource for the project.' According to Oregon LNG, the proposed exports are scheduled to commence from the terminal in late 2017."

U.S. Sen. Lisa Murkowski (R-AK) applauded Wednesday action at FERC approving the construction of Freeport LNG export facilities in Texas (see related story) and the Thursday DOE approval of Oregon LNG's export license.

"This has been a good week for those of us advocating for an expansion of our nation's natural gas exports," Murkowski said. “Rising domestic production presents a golden opportunity to become a world leader in energy exports, while still meeting the full demand for gas at home."

U.S. Sen. Mary L. Landrieu (D-LA) concurred. "These steps by FERC and DOE demonstrate that responsibly exporting LNG is clearly in the national interest of the United States," she said. "DOE and FERC need to maintain positive momentum for additional LNG exports and to process outstanding applications efficiently."

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