NorthernStar Energy LLC could start construction in the first of half of next year on the Bradford Landing liquefied natural gas (LNG) receiving terminal on the Columbia River in Oregon, following what one of the company’s senior officers called a “positive recommendation” from FERC staff in the project’s draft environmental review.
“With proper mitigation, the project is environmentally acceptable,” said Joseph Desmond, the former chief energy adviser to California’s governor who is now a senior vice president with NorthernStar.
Local planning/zoning issues will need to be worked through in the next few months, along with a series of public hearings beginning in October on the draft environmental documents. “If things go according to the schedule, we would hope for a final license some time in the first quarter of 2008,” Desmond said. At this point, NorthernStar has no agreements with any suppliers or buyers of gas at the $600 million terminal.
A number of the mitigation measures captured in the draft environmental impact report by the staff of the Federal Energy Regulatory Commission (FERC) were things that the project sponsors proposed, Desmond told NGI during an interview late last Friday. This is particularly true regarding the measures for improving the river’s salmon populations in and around the proposed LNG terminal.
NorthernStar is proposing to spend up to $59 million over the life of the LNG project to fund a salmon habitat restoration effort along the lower Columbia River run by two nonprofit fish recovery organizations in the Pacific Northwest and nationally. The sponsors aim to have the LNG terminal end up as a “net benefit” to fish life in the Columbia, Desmond said.
From Desmond’s recent past as head of the California Energy Commission and Gov. Arnold Schwarzenegger’s chief adviser on energy, he said each proposed LNG project along the West Coast faces its own unique set of challenges based on its own geography and other characteristics. In addition to the Oregon project, NorthernStar has a project in the early permitting process offshore Southern California called Clearwater Port.
“I can’t say if we are better or worse off with a river-based terminal in Oregon,” Desmond said. “We obviously have an offshore proposal in California on which we are working with the California State Lands Commission and the U.S. Coast Guard process, and we’re currently awaiting a determination from the Coast Guard that we are data adequate and that will start the permitting clock.”
The proposed Oregon terminal would be located on a 40-acre site at the former townsite of Bradwood in Clatsop County, OR, about 38 miles up the Columbia River from the Pacific Ocean — the main economic artery for the Pacific Northwest. The project, which would provide up to 1.3 Bcf of natural gas to the region, has become a politically charged issue in Oregon and Washington, with state legislators and landowners opposing it (see Daily GPI, July 2).
The project calls for the construction of a single ship berth capable of receiving and unloading LNG tankers with capacities ranging from 100,000 to 200,000 cubic meters; two 160,000-cubic meter storage tanks; a 36.3-mile high-pressure pipeline in Clatsop and Columbia counties, OR, and Cowlitz County, WA; and associated pipeline support facilities [CP06-365, CP06-366].
Desmond said the site is being developed with expansion in mind — a third LNG holding tank could be added later — but that would require going through a whole new permitting process, including environmental review, from start to finish. “The site, in terms of the land-use requests, would provide for an expansion sometime in the future if market conditions justified it,” he said. “But it requires we go back through the permitting process all over again.”
NorthernStar is currently in discussions with a number of shippers and buyers, Desmond said, noting that many of them are “expressing heightened interest, given the forward movement of the project, but beyond that I cannot comment.”
Would supply and sales deals come before or after a final FERC ruling? “The discussions are based on confidential terms, and as we get close to receipt of a permit things really begin to solidify,” Desmond said.
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