Utah is hoping a pair of LNG export projects on the West Coast will be realized and help cure a supply glut that has put pressure on natural gas prices in the landlocked state.
The governor's energy teams are working to build a coalition of western states and Native American tribal leaders to help smooth the path for infrastructure projects that would help Utah and other Rocky Mountain states get their gas to export markets.
The state has voiced its support in Federal Energy Regulatory Commission proceedings on Pembina Pipeline Corp.'s Jordan Cove Energy Project LP in Oregon and entered into a memorandum of understanding with Mexico's Baja California state in an effort to advance Sempra Energy's proposed Energia Costa Azul LNG, according to Jordan Clark, managing director of energy and minerals development in the Utah governor's office.
Utah also passed an "LNG resolution at our state legislature to support the growing coalition," Clark said. The state has "executed an MOU through our energy office with Baja Mexico to support the export of commodities and innovation through Mexico and that has been the foundation to invite them to join the western states and tribal nations natural gas initiative," he said. "We moved forward last year with an independent MOU to advance exports through Baja California like Sempra Costa Azul."
Utah's efforts are a result of pressure on western natural gas-producing states to find another outlet for their natural gas due to booming shale gas production in Appalachia that has flooded traditional markets in the Midwest. Clark made his remarks after a speech at the LDC Gas Forums Rockies & West Conference Aug. 6. Several other speakers at the industry gathering expressed concern about getting gas out of states including Colorado and Wyoming amid the glut of supply and slack demand in West Coast markets. Gas from those states, which have no access to tidewater, is also facing new competition from output associated with shale oil production.
Sempra announced in March that it had received U.S. Department of Energy approval to export gas through Costa Azul. The facility, which started operations as an LNG receipt terminal in 2008, would be allowed to export 646 Bcf of gas annually in its first two liquefaction phases under the authorization. Sempra expects to make a final investment decision on the project later in 2019. Jordan Cove is located on the Oregon coast and has been bogged down in state and federal permitting issues.
Clark said Utah is taking a proactive approach to finding new markets and his office is anxious to work with infrastructure developers. That includes identifying potential corridors for new pipelines.