Backers of the Jordan Cove liquefied natural gas (LNG) import-export project along the south-central Oregon coast at Coos Bay are moving ahead with necessary federal regulatory filings in March while monitoring the decline in U.S. natural gas prices and what that will mean for both domestic and global markets.

Backed by a group headed by Fort Chicago Energy Partners, which has a conditioned approval for an LNG import facility and connecting 230-mile transmission pipeline, Jordan Cove earlier in March received an OK from FERC to start the pre-filing process for a permit to build a LNG liquefaction facility for exporting U.S. gas to the Asian markets, according to Project Manager Bob Braddock. This week it is expected to file with the U.S. Department of Energy (DOE) for export authority to non-free trade nations.

“Other than that, we are just doing the engineering design work and all of the other things you need to do at this stage,” said Braddock, reiterating that Jordan Cove earlier received the DOE export approval (as have others) to export to free trade nations. Late last year, it won some preliminary approval for exporting to designated “favored nations” (see Daily GPI, Jan. 10). It is seeking authorization to export up to 438 Bcfe of LNG annually.

In re-entering the Federal Energy Regulatory Commission (FERC) process, the conditioned approval earlier for its marine docking facilities and the connecting transmission pipeline, Pacific Connector, are not involved. Their previous approvals stand and will be part of the expanded project that now includes export capability and a 340 MW (baseload) to 380 MW (peaking) natural gas-fired electric generation plant adjacent to the Coos Bay site called the South Dunes plant.

Braddock told NGI that he expects to begin filings for the power generation plant at the state level before the end of March. Then on March 27 there will be a FERC open house on the overall project held in Coos Bay. “It is almost like a trade show atmosphere with various booths for the different contractors involved,” he said.

While the regulatory processes are on track and stable, the same cannot be said for the impact from continually falling natural gas prices, Braddock said when questioned about the ongoing trend.

The lower prices are causing a resurgence of interest among large industrial operators that had been taking their plants offshore for the past decade or so to come back to North America, attracted strictly by low prices for natural gas and gas liquids. Two huge companies, Nucor and Methanex, have done that in a big way recently, according to Braddock who has been involved with both companies over the years regarding some of their foreign-based facilities.

The largest methanol producer in the world, Methanex more than 20 years ago shut down plants it had in British Columbia and Alberta in favor of overseas locations. Now for the first time in 20 years a plant in Medicine Hat, Alberta, has been restarted, fueled by cheap natural gas supplies. “More important than that,” he said, is the fact that they now are shutting one production train at the world’s largest methanol production plant at the tip of South America in Tierra del Fuego and bringing it back to the Gulf of Mexico coast.

“So something is happening because of all this low-cost gas,” said Braddock, noting Shell’s recent decision to potentially site a “world-sized” ethylene cracker in southwestern Pennsylvania (see Daily GPI, Dec. 5, 2011). “I think it is cool; it’s great. It is the first time in my business career that we are starting to see something real happening that is now a result of some artificial [government mandated] legislation.

“This is a very interesting total shift. For the past 30 years, nobody has been building methanol plants in the states; they moved them all offshore, and now they are starting to come back.” Methanol has a wide range of industrial and transportation uses.

©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.