Along the North American West Coast, the prospective liquefied natural gas (LNG) export business is shaping up as a Canadian-U.S. tussle, with the provincial government in British Columbia (BC) and others in western Canada pushing multiple export sites, compared to the lone U.S. project, Jordan Cove, along the Oregon coast at Coos Bay.

Jordan Cove Project Manager Bob Braddock told NGI Tuesday he thinks at least one project will get built in Canada, leaving room for his project in the United States, which would depend on BC shale gas supplies for up to 70% of its exports. He is unconcerned with the stampede of projects in western Canada.

According to a report by Navigant Consulting Inc. that Jordan Cove included in a recent filing to the Department of Energy (DOE) (see Daily GPI, March 27), if the proposed Oregon import-export facility began operations in 2017-2018 about 60-70% of its supplies would come from Canada, Braddock said.

While the Navigant study paid for by Jordan Cove’s backers — a limited partnership of an affiliate of Alberta-based Fort Chicago Energy Partners LP and Energy Projects Development LLC — criticizes supply studies relied on by DOE as understating the potential from U.S. shale gas sources, it also predicts that Canadian shale gas in British Columbia will be “a major source” of supplies for Jordan Cove. Navigant estimates that BC shale supplies will more than double, from 4 Bcf/d to 9 Bcf/d, during the next 23 years.

At least six proposals are in various stages of development to transport LNG from Kitimat, on BC’s west coast, to Asia Pacific markets. Another proposal surfaced recently from the BG Group plc, proposing to ship LNG from Prince Rupert, on BC’s north coast. More proposals and possibly consolidations of proposals likely are under way as well, according to energy analysts (see Daily GPI, Feb. 10).

Because of existing, under-used gas transmission pipeline infrastructure from western Canada to the Pacific Northwest, including Oregon, getting BC shale gas supplies to Jordan Cove could be cheaper and easier than developing all the new infrastructure between the shale supplies and the BC coastal liquefaction facility sites, Braddock said. As part of Jordan Cove, Fort Chicago and units of PG&E Corp. and Williams are partnering on the 1.2 Bcf/d, 230-mile Pacifc Connector transmission pipeline, which would connect the Coos Bay facilities to interstate pipeline coming down from Canada.

“Although the amounts will vary over time, we inevitably will get gas out of Canada,” Braddock said. “That is just the nature of the beast up here in the Northwest.

“We see our project as kind of an alternative to BC export terminals, but not as an alternative to a single terminal. BC is going to build one or several terminals. If we get built, they may build one less than they are now planning to build. They are going to build at least one, there is no question about that, and now they are intending to build three. It is a current objective of the BC government.”

According to Braddock, besides the Kitimat project and a floating export facility (see Daily GPI, March 16, 2009), the British Columbia government is looking for a third site near Prince Rupert.

It would be an understatement to say BC has a keen interest in LNG export possibilities. Earlier this month high hopes for budding LNG exports dominated an ambitious economic growth forecast released April 2 by BC Premier Christy Clark. Of C$25 billion (U.S. dollar at par) in investment anticipated by Clark within 10 years, her Liberal government is relying on LNG for C$18 billion (see Daily GPI, April 4).

The export potential is such in BC that the producers there are “scrambling,” according to Braddock, who noted that it was the Canadian producers who first came to Jordan Cove to talk up export possibilities because they are looking for ways to get their increasingly abundant supplies to market.

“They are not going to be able to develop [all those supplies] unless they can find a way to get it to market,” Braddock said. “The first people who expressed interest in our terminal were producers, and they continue to express strong interest. They just have to find another market. And the provincial government sees the exports as an opportunity for diversification and economic growth.”

Navigant’s analysis for Jordan Cove concludes that a U.S. West Coast LNG market can help contribute a less volatile natural gas market nationally.

“In today’s market, with a surplus of supply compared to demand, additional baseload LNG export demand offers the ability to sustain the ongoing development of gas supply that fosters a sustainable industry at prices that are more stable and less volatile,” Navigant’s report said.

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