In the midst of many unsettled regulatory permitting issues from the local to federal levels, the two proposed liquefied natural gas (LNG) export projects in Oregon are stepping up the pace of their marketing efforts for both customers and gas suppliers to their envisioned tolling facilities.
Ultimately, the Oregon LNG project slated for a site at the mouth of the Columbia River and Jordan Cove LNG along the south-central Oregon coast at Coos Bay are working to be a matchmaker between numerous Asian gas buyers and North American producers in western Canada and the United States.
Jordan Cove’s backer, Calgary, Alberta-based Veresen, earlier this month signed heads of agreements (HOA) with prospective customers in Indonesia, India and an unnamed “eastern Asian” nation (see Daily GPI, Oct. 14). A source close to the project’s planners in Oregon told NGI that the deals collectively could be worth more than $20 billion over a 20- to 25-year contract.
The prospective deals amount to more than the 1 Bcf/d initial capacity of the proposed Jordan Cove facilities, Project Manager Bob Braddock told NGI recently. The HOAs are expected to be turned into formal contracts by the mid part of next year, Braddock said.
Although there are no specific preliminary agreements yet, Oregon LNG’s Peter Hansen, a founder and project manager, said, “very active discussions” are ongoing with what he characterized as “quite a number of interested parties.” Hansen predicted that there wouldn’t be any announcements until his project has a “significant agreement” with a “brand-name” LNG buyer.
Hansen was silent on whether some North American producers were part of the current discussions.
Braddock said at this point he is not expecting “much activity” from Canadian producers. “They [eventually] would be dealing directly with the holder of [Jordan Cove] terminal capacity and not with us,” he said. “We are still talking to some producers but mostly to gas consumers.
“We would certainly function as a ‘matchmaker’ but at present most of the gas consumers we are dealing with already have a dialogue with gas producers under way.”
In announcing the HOAs in Canada, Veresen CEO Don Althoff called the deals an “important commercial milestone,” and he stressed that Jordan Cove’s senior people are continuing to evaluate additional opportunities “with several highly respected prospective customers.”
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