Canadian midstream player Pembina Pipeline Corp. has written down the assets for the Jordan Cove liquefied natural gas (LNG) export project in Oregon and no longer can predict if the project will move forward, executives said last week.
Pembina has logged a one-time C$1.6 billion ($1.27 billion) impairment, partly for the export project. Management cited the Covid-19 pandemic, market uncertainty and changing government policies in the United States.
The impairment also included Pembina’s 50% interest in the Kinder Morgan Inc.-operated Ruby Pipeline, which transports natural gas from Wyoming to Oregon. In addition, the one-time writedown was for a 50% stake in the Canada Kuwait Petrochemical Corp. in Alberta, now on hold indefinitely.
“We believe these opportunities remain strategic, make economic sense if derisked and are aligned” with Pembia’s environmental, social and governmental priorities, CEO Michael Dilger said during a fourth quarter earnings call. “While we believe the time for these projects may come, since we can no longer predict with certainty when that time maybe, we were compelled
to reflect their impairments through a non-cash charge.”
The announcement follows a number of setbacks for Jordan Cove, which has faced mounting opposition over the years. The election of President Biden, who has signaled support for more environmental reviews for energy projects, has made the project’s future more murky.
If it eventually moves forward, Jordan Cove would be the first LNG export facility on the U.S. West Coast. The development would be capable of liquefying up to 1.04 Bcf/d. The 229-mile Pacific Connector Pipeline would transport feed gas to the facility.
Though it has received federal approvals, the project has been denied some key state environmental permits. The most recent blow came in January, when the Federal Energy Regulatory Commission denied a petition by the sponsors to waive Oregon’s regulatory authority in denying the needed state environmental permits.
Spokesperson Dylan Darling of the Oregon Department of Environmental Quality, told NGI the regulator was still awaiting a revised permit application.
Meanwhile, spokesperson Allie Rosenbluth of Rogue Climate, an Oregon environmental group opposed to Jordan Cove, said there was no “viable” path forward for the export project or pipeline.
“It’s time for Pembina to throw in the towel and give up on Jordan Cove LNG for good,” Rosenbluth said. “Communities across Southern Oregon are excited to focus on creating local jobs in renewable energy and energy efficiency that are good for our communities and our climate.”
Pembina reported a loss in the fourth quarter of 2020 of C$1.216 billion, or C$2.28 per share, compared to earnings of C$150 million, or 22 Canadian cents, the year before. For the full year, the company booked a loss of C$316 million, or 86 Canadian cents per share, compared to earnings of C$1.507 billion, or C$2.69 per share, in 2019.
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