The U.S. federal energy regulator has denied an application by a subsidiary of a Calgary company for the construction and operation of a natural gas pipeline and LNG export terminal on the Oregon coast.
In May 2013, Jordan Cove Energy Project, a wholly owned subsidiary of Calgary-based Versen, applied to build and operate an LNG export facility in Coos Bay, Oregon. Less than a month later, Pacific Connector Gas Pipeline, which is owned equally by Jordan Cove and a subsidiary of the Williams Companies, applied to build and operate 373 kilometres of pipeline for transporting natural gas from Malin, Oregon to the proposed Jordan Cove terminal, where it would be liquefied, stored and loaded onto transpacific tankers. Together, the projects would be capable of producing 6.8 million tonnes of LNG each year using western Canadian and U.S. natural gas.
On Friday, the U.S. Federal Energy Regulatory Commission denied Pacific Connector’s application on the grounds that the benefits of the project to the public did not outweigh the potential adverse impacts. The commission asserts that Pacific Connector has demonstrated “little or no evidence of need for” the pipeline.
Similarly, the commission ruled that, without a pipeline connecting the Jordan Cove LNG terminal to a source of natural gas, the benefits to the public would not outweigh the potential adverse impacts that would arise from the construction of the facility.
“Clearly, we are extremely surprised and disappointed by the FERC decision,” said Don Althoff, president and CEO of Veresen, in a statement. “The FERC appears to be concerned that we have not yet demonstrated sufficient commercial support for the projects. We will continue to advance negotiations with customers to address this concern.”
The companies will request a rehearing of the decision.