Pipeline ownership key to Jordan Cove-Piceance link
A company’s half-ownership in a pipeline connecting the Rockies to Oregon should provide some assurance that some of the gas it hopes to export from a proposed liquefied natural gas terminal would come from places including western Colorado.
That’s according to David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, responding to a question last week in a tele-town hall conducted by the Colorado Rural Energy Action Council, formerly the Piceance Energy Action Council.
Ludlam and state Sen. Ray Scott, R-Grand Junction, fielded questions from callers from several counties, including someone who wondered what percent of gas for Veresen Inc.‘s proposed Jordan Cove LNG project in Coos Bay, Oregon, might come from Canada versus the United States.
Some project critics have noted that Veresen is a Canadian-based company with considerable energy infrastructure in Canada, and say it may be courting support from Colorado boosters of local gas production simply to help it get approval of a project that would ship Canadian-produced gas.
Ludlam said where the terminal’s gas would come from would depend a lot on market forces.
But he noted that Veresen also owns a 50 percent interest in the Ruby Pipeline, which runs from Wyoming to Oregon. Veresen agreed in 2014 to spend nearly $1.5 billion to buy the partial ownership in the 42-inch-diameter line, which can transport about 1.5 billion cubic feet of gas a day.
“The reason that they purchased that pipeline is so they could provide for their customers an opportunity to have supply come from our area,” Ludlam said.
When Veresen announced the purchase in 2014, its president and chief executive officer, Don Althoff, said it “provides significant future added upside related to our Jordan Cove LNG project.”
Ludlam said that despite rumors that have been promulgated that all the Jordan Cove gas might come from Canada — or all of it might come from the western Colorado’s Piceance Basin — neither is the case. Customers in Asia who will be buying the gas exported from Jordan Cove will want it coming from a diversity of areas, he said.
“It gives them energy security back home,” he said.
But he added, “The fact that the project proponent owns half of the pipeline that connects us to the terminal itself bodes really well for having their interests in alignment with ours to make sure that a portion of this gas comes from our region.”
Gas would reach the Oregon terminal via a new pipeline that would run from Ruby’s western hub in Malin, Oregon, to Jordan Cove.
Last year, the Federal Energy Regulatory Commission rejected the Jordan Cove project, in part due to concerns about landowners along the pipeline route facing possible eminent domain proceedings for a project that had shown little evidence of need.
Veresen is in the process of refiling with FERC, pointing to agreements it has reached with Asian customers.