Jordan Cove LNG developers seek several fixes to FERC authorizations

Washington — Developers of the Jordan Cove LNG project are objecting to parts of the federal order approving the LNG export terminal in Coos Country, Oregon, and the related 229-mile Pacific Connector pipeline, including one requirement that could affect the timing of future contracts for the pipeline capacity in relation to LNG contracts.

The Federal Energy Regulatory Commission March 19 granted authorization to construct and operate the 7.8 million mt/year LNG export terminal under Section 3 of the Natural Gas Act and as well as Section 7 certificate authorization for the pipeline.

Not surprisingly, the order has begun drawing rehearing requests from some opponents, including tribes who argued the historic preservation review was incomplete and that approval could not occur while a positive coastal zone management consistency determination was lacking.

The Natural Resources Defense Council also sought rehearing on multiple grounds saying, for instance, that public convenience and necessity were not demonstrated for a pipeline whose purpose was to export gas.

But, adding to that, Jordan Cove Energy Project and Pacific Connector Gas Pipeline sought several corrections to the order that went in their favor.

One requested change aims to better synchronize the timing of offers toward the end of pipeline shippers' contract period with the realities of the LNG market.

The companies argued FERC erred when it directed Pacific Connector to revise its tariff to notify shippers of the right of first refusal no more than 12 months before the end of the end shipper's service agreement.

Instead, they argued an 18-month period was needed to transact contracts for capacity as efficiently as possible while maintaining protection for existing customers.

"The market demands of the LNG terminal require it to contract for capacity more than one year in advance," they argued. "[I]n fact, the current expectations are that the liquefaction agreements will require customers to exercise extension options at least three years in advance."

The six- to 12-month period required under the March 2019 order will directly impact the LNG terminal's ability to execute contracts for liquefaction and, in turn, harm the pipeline's ability to contract for gas transportation service, they wrote.

HISTORIC DESIGNATION

Separately, the developers objected to FERC's consideration of a 26-mile area as eligible for listing in the National Register of Historic Places.

In their view, FERC failed to apply the requisite criteria and independently make a reasoned determination, and instead abdicating the obligations to the Oregon State Historic Preservation Officer while ignoring numerous objections.

"Nothing like the proposed 26-square-mile [traditional cultural property], encompassing large swaths of industrial, commercial, and residential developed areas, has ever been found by any federal agency to be eligible for listing in the National Register," they wrote.

As a result, they said it is hard to understand how FERC will be able to determine the effects of development in the area, and property satisfy historic preservation requirements, "when the characteristics purportedly making the property eligible for listing are undefined."

COASTAL ZONE

In addition, the developers sought clarification that a US Commerce secretary determination overriding Oregon on coastal zone management issues would suffice to meet a condition of the order. FERC required that before construction can begin, the companies must file a copy of the determination of consistency with the Coastal Zone Management Plan issued by the state of Oregon.

Creating a significant sticking point for the project, the Oregon Department of Land Conservation and Development February 19 found the applicants had not established consistency with specific enforceable policies of the Oregon Coastal Management Program. In response, the companies have appealed that finding to the secretary of commerce.