Northwest Natural Gas Co. will forge ahead with plans to build a portion of its Palomar pipeline through Eastern Oregon, despite failed plans to connect it to a proposed liquefied natural gas terminal at the Columbia River.
The announcement, made Thursday by Chief Executive Officer Gregg Kantor at the company's annual shareholder meeting in Portland, comes despite opposition from environmental advocates, including some shareholders, who fear the pipeline's construction will damage crucial habitats and displace landowners along its path.
NorthernStar Natural Gas Co. on May 4 declared bankruptcy and abandoned its proposed Bradwood Landing import facility in Oregon. The bankrupt company had contracted with NW Natural to build the Palomar pipeline, which would have connected the terminal to the interstate system. NW Natural, in return, would have purchased a portion of the imported liquefied natural gas to diversify its natural gas supply.
Now without the Bradwood terminal, NW Natural is in a bind. The company must find other new supplies of natural gas and NorthernStar still owes NW Natural $17.2 million for the contract, Kantor said Thursday.
"NW Natural is holding the only lien on the assets of that company so we're confident they'll be able to recover what little investment they've made so far," said Michael Bates, a research associate with D.A. Davidson & Co.
That leaves the supply issue.
The 217-mile Palomar pipeline would stretch across the Cascades into the Willamette Valley to provide a back-up supply of natural gas from Canada and the Rocky Mountain region.
The company will abandon the western portion of the pipeline, which would have connected Bradwood to the interstate pipeline system. But, he added, finishing the 111-mile eastern portion of the pipeline between Molalla and Madras is now even more crucial for maintaining reliability and supporting population growth.
Some 300 Clark County residents went without heat late last year when weeks of single-digit temperatures maxed out NW Natural's supply system and a gas pipeline to the Felida and Hazel Dell neighborhoods lost pressure.
"Had Palomar been in service, we could have avoided those outages," Kantor told shareholders.
Environmental advocates picketing the meeting, however, say the pipeline is unnecessary. Kantor's remarks at the meeting were loudly interrupted by an anti-LNG activist who called his comments "lies," labeled the project "irresponsible" and called upon shareholders to oppose the pipeline.
"There are 250 people outside who demand that you stop the pipeline," shouted Olivia Schmidt, a community organizer for the anti-LNG movement, who was invited to attend as a guest, as she was escorted from the meeting. A large rally had gathered outside an hour before the meeting in protest.
"Well, there are 3.5 million Oregonians who depend on us building that pipeline," Kantor responded.
Copyright (c) 2010, The Columbian, Vancouver, Wash. Distributed by McClatchy-Tribune Information Services.