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.


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Where is the market for LNG? “Customers in Asia”? That’s a continent. What countries? Where are the signed contracts?

The fact that Veresen (which was bought out by Pembina a Canadian pipeline company in May) owns part of the Ruby Pipeline won’t make any difference when it comes to finding a market for the gas.

Qatar and Australia are No. 1 and 2 in the global LNG market. Russia has signed contracts with Japan for LNG.

“The weak LNG market conditions have separated the wheat from the chaff,” Citigroup’s Dale Koenders said in a July 18 report. Of about 40 global projects assessing decisions to proceed in 2016-17, only two have proceeded and “perhaps only two others are still possible in this timeframe”, said Mr Koenders, the head of Citi’s energy and utilities research team in Australia.

This just in from the CBC News:

“A plan to build a liquid natural gas liquefaction and export facility in Port Edward, B.C., will not go ahead.

‘A release from Pacific NorthWest LNG said the decision to cancel the $36-billion project was made after ‘a careful and total review of the project amid changes in market conditions.’

“Pacific NorthWest LNG is majority owned by Petronas, a Malaysian oil and gas company.

“Anuar Taib, chair of the Pacific NorthWest LNG board, wrote that ‘prolonged depressed prices and shifts in the energy industry have led us to this decision’.”

Jordan Cove was, is and always will be a scam to lure investors in and keep pumping money into the natural gas futures market. They can’t keep drilling if they don’t have a constant flow of cash.

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