April 19, 2012 Thursday

Sean Sullivan

FERC vacated without prejudice an order authorizing Jordan Cove Energy Project LP to construct and operate an LNG import terminal in Coos County, Ore., and the related Pacific Connector Gas Pipeline that would have run from the terminal to a point near the Oregon-California border.

In the same April 16 order that eliminated the authorization, FERC dismissed as moot the requests for rehearing of its authorizing order filed by the National Marine Fisheries Service, Oregon and the Western Environmental Law Center, the last of which represented a group of environmental and citizen organizations and individuals. Commissioner Philip Moeller dissented in the April 16 order.

FERC said Jordan Cove's prefiling application for authorization to build export facilities will be considered on its merits.

In conversations that took place before the April 16 order, Jordan Cove Vice President Bob Braddock indicated that his company planned to build a bi-directional import-export terminal such as the one FERC authorized for Cheniere Energy Inc. subsidiaries in Louisiana. But, contacted after the April 16 order, Braddock took the FERC action in stride.

"While I am sure many will interpret the FERC decision as very significant (either positive or negative depending on their predisposition), I tend to look at it as mostly housecleaning," Braddock said in an email.

"The JCEP terminal is in the early stage of a new filing for export, and we need to secure an FERC authorization for export before we could do anything," he said. "The unresolved request for rehearing on the import issue created an awkward situation for FERC that needed to be resolved. The decision does, however, provide the guidance we have been seeking concerning the NEPA documents and what we need to include in our export application."

Braddock said the National Environmental Policy Act documents for the project are valid, and they will be added to new NEPA documentation to form the basis of a FERC environmental assessment of the impacts of the proposed export terminal.  "Lots of work to get done while the politics get sorted out at DOE regarding the issuance of export licenses," he said.

According to FERC, in the same Feb. 29 filing in which Jordan Cove requested prefiling status to explore the possibility of a liquefaction project, the developer effectively notified the commission that it no longer intended to use the Dec. 17, 2009, authorization to build the import terminal. FERC granted Jordan Cove pre-filing status for the export project. (PF12-7-000)

FERC said its April 16 decision does not change its policy of letting the market determine which gas infrastructure projects go forward, as long as the commission finds that there would be no substantial adverse impacts. FERC said Jordan Cove may submit a new application for an import terminal if the company identifies a demand for import service. (CP07-441, CP07-442, CP07-443, CP07-444)

Copyright 2012 SNL Financial LC. All Rights Reserved.

(Originally published April 19, 2012, on SNL Daily Gas Report.)