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Pembina decides to 'pause' development of Jordan Cove LNG terminal in Oregon


Regulatory hurdles cited in US court filing

Operator has also struggled on commercial front

Houston — Canada's Pembina has told a US appeals court it is pausing development of its proposed Jordan Cove LNG export terminal in Oregon and affiliated Pacific Connector feedgas pipeline to assess the impact of recent regulatory decisions that could threaten the future of the project.

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The April 22 court filing came in litigation in which multiple parties are challenging the US Federal Energy Regulatory Commission's certificate order authorizing the projects.

Pembina's decision comes a month after Exelon-backed Annova LNG scrapped its proposed liquefaction terminal in Texas. In February, Pembina said it could no longer predict when it would be able to build Jordan Cove, though it said at the time that it was evaluating a path forward. Pembina's latest statement in the filing with the US Court of Appeals for the DC Circuit did not make clear how long the "pause," as the decision was described, would last.

A Pembina spokesperson did not immediately respond to a request for further comment April 23.

The project's biggest hurdle has been obtaining necessary approvals from the state of Oregon, amid fierce opposition from environmental groups and US lawmakers that represent Oregon.

Of consequence, the Department of Commerce on Feb. 8 sustained Oregon's objection under the Coastal Zone Management Act, as Jordan Cove highlighted in its legal filing. FERC's authorization for the project barred developers from starting construction without documentation that they had received authorizations under the CZMA and Clean Water Act, or that those authorizations had been reviewed or overridden.

FERC on Jan. 19 also denied Jordan Cove's effort to have the commission declare Oregon's water quality review waived.

Jordan Cove would benefit from being the first liquefaction facility on the US West Coast, an advantage because of its its shorter shipping distance to East Asia compared with existing terminals on the Gulf Coast.

But Pembina, and the original developer of the project that it later acquired, Veresen, encountered significant challenges over the last eight years in securing necessary regulatory permits and commercial agreements to be able to sanction construction.

The first FERC permit certificate application for Jordan Cove and Pacific Connector was filed in 2013, then rejected in 2016. The second application was filed in 2017. In March 2020, FERC voted 2-1 to conditionally approve the certificate for the export terminal and feedgas pipeline.

While Pembina has deferred or suspended some other projects, until the court filing it had stuck with continued development of Jordan Cove, at least nominally, as ongoing pre-construction costs were seen as minimal. To date, the company has not announced any firm long-term offtake contracts tied to the proposed liquefaction terminal.