Page 4 - NorthAmOil Week 12

NorthAmOil COMMENTARY NorthAmOil
Jordan Cove LNG receives federal approval, but state battle remains
The proposed Jordan Cove LNG facility has received its long-awaited federal regulatory approval, but operator Pembina still has a battle on its hands to ensure the project can go ahead
OREGON
WHAT:
The Jordan Cove LNG export project has received regulatory approval but state-level hurdles remain.
WHY:
State regulators have previously denied the project key permits that it still requires in order to move forward.
WHAT NEXT:
A number of planned US LNG ventures could be cancelled or delayed as a result of collapsing demand.
THE Jordan Cove LNG export project, being developed by Pembina Pipeline in Oregon, on the US West Coast, has received federal regu- latory approval. The authorisation comes after years of delays, and indeed the US Federal Energy Regulatory Commission (FERC) previ- ously rejected the project in 2016.
Jordan Cove LNG has since undergone a change of ownership, with former operator Veresen being acquired by Canada’s Pembina in 2017. But even with its federal approval now acquired, the project still faces a battle at the state level to obtain certain permits before it can pro- ceed. This comes as new LNG ventures in the US and elsewhere appear increasingly under threat as global energy demand collapses owing to the coronavirus (COVID-19) pandemic.
Outlier
The Jordan Cove terminal, proposed for Coos Bay, was originally one of two LNG export pro- jects planned for Oregon. However, the other project, Oregon LNG, proposed for Warrenton, was scrapped in 2016 after its backers struggled to access funding, and also encountered obsta- cles in the regulatory approval process.
Now Jordan Cove LNG is the only export project still being proposed for the West Coast. While this makes it an outlier in US terms, the facility would be in relative proximity to the Canadian border. North of that border,
construction is underway on the LNG Canada megaproject. Indeed, Jordan Cove LNG would receive Canadian natural gas as feedstock – as well as gas from the US Rockies region.
Pembina hopes that Jordan Cove’s location will give the project a competitive advantage. Tankers would have a shorter distance to travel to Asia from the terminal compared with facili- ties on the Gulf Coast, and with no need to pass through the Panama Canal. Onshore, the project aims to benefit from connectivity to a gas trading hub near Malin, Oregon, as well as from its diver- sified gas supply through existing pipelines and gas-gathering networks.
However, unlike most Gulf Coast LNG pro- jects, Jordan Cove needs to overcome consider- able local opposition, and state-level regulatory hurdles.
Hurdles
Several state permits are still required in order for Jordan Cove to be able to proceed, some of which have previously been denied. Last year, the Oregon Department of Environmental Quality denied a water quality certificate for the project, though the rejection was partly attrib- uted to procedural reasons, with Pembina able to reapply. However, the department warned at the time that it had “insufficient information to demonstrate compliance with water quality standards, and because the available information
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w w w . N E W S B A S E . c o m Week 12 26•March•2020