More state friction for Jordan Cove, FERC decision ahead

Jordan Cove LNG faces a new state-level snag in Oregon, even as it awaits a possible federal authoring decision on February 13 that could be an important step forward for the project.

Project developer Pembina last week withdrew an application for a removal fill-permit, after the Oregon Department of State Lands declined to grant a requested extension.

The Jordan Cove project entails an LNG terminal in Coos County, Oregon, with design capacity of about 7.5 million mt/year in its first phase. Proposed alongside it is the 229-mile, 1.2 Bcf/d Pacific Connector natural gas pipeline (CP17-494, 495). The project would provide an outlet for western Rockies and Canadian production struggling to find downstream demand, according to S&P Global Platts Analytics.

According to the Department of State Lands, Oregon requires removal-fill permits for projects that remove or fill more than 50 cubic years of material in state-owned waters or wetlands. The Jordon Cove's application, first filed in November 2017 and later revised, related to the LNG terminal, slip and access channel, and the pipeline, the department said.

Jordan Cove asked for a two-month extension of the January 31 decision deadline, saying more time was needed to re-apply for a Clean Water Act Section 401 permit in Oregon, among other things. But department Director Vicki Walker wrote January 21 to deny that request, saying, "the department has not received timely and sufficient information to address all outstanding questions." Her letter detailed prior extensions and state information requests.

Jordan Cove spokesman Paul Vogel said the developers were unable to meet the department's requirements due to recently required information from other state agencies.

"These recent requirements from other agencies are impossible to finalize prior to DSL's January 31, 2020, decision date," he said.

LAND USE ADVANCES

The action comes as the LNG developers recently called attention to advances it has made acquiring all needed land use permits.

"Having received all local land use permits, the next major milestone in Jordan Cove's regulatory process will be the final determination by the Federal Energy Regulatory Commission on February 13, 2020," Vogel said. After that FERC decision he said, Jordan cove "will determine our path forward." .

FERC identified February 13 as its certificate order decision date when it released a revised environmental review schedule for the project in September. One issue potentially affecting the timing is a route an alternative route the EIS preferred for about 15 miles of the project.

Gary Kruse of LawIQ suggested the state removal and fill permit is potentially one that could be overridden under federal preemption. The withdrawal may avoid an adverse determination and allow Jordan Cove more time to complete a response, he said. "Given that they haven't even submitted their 401 request yet, I would not think renewing this request at a later date would be a hindrance to their schedule," he added.

Rob Rains of Washington Analysis offered that the project's challenges at the state level remain a substantial hurdle to the terminal's completion. After the project secured its final environmental impact statement from FERC in November, a variety of Oregon agencies identified ongoing concerns with that document.

CAMERON REQUEST

Separately the Cameron LNG asked FERC for a 72-month extension, until May 5, 2026, to bring a 9.97 million mt/year expansion of its existing terminal into service. It cited changes in its joint venture in 2016, when one of the partners indicated it did not wish to invest more in the expansion. Following Total's assumption of Engie's interest in the joint venture, the joint venture partners are continuing to move forward, Cameron told FERC.

"The JV Partners anticipate that a final investment decision could be reached with respect to the Cameron LNG Expansion Project by the middle of 2021," Cameron said, noting FERC's extension would be "condition precedent" to reaching FID.

Also at FERC, the Magnolia LNG project received a final environmental impact statement from FERC related to its request to increase previously authorized production capacity from 8 million mt/year to 8.8 million mt/year. With added mitigation measures, the proposed changes would continue to avoid or reduce impacts to less than significant levels, FERC staff found.