The Canadian company Pembina Pipeline Corp. has agreed to buy a roughly half interest in a liquefied natural gas export project in British Columbia, raising more questions about the prospects of it resuming pursuit of its paused Jordan Cove LNG project in Oregon.
Pembina this week said it is partnering with the Haisla Nation on the proposed Cedar LNG project, which would be a floating natural gas liquefaction facility moored in the Douglas Channel, a shipping route off the coast of Kitimat, British Columbia. Pembina said it will acquire the equity interests of two other companies in what is projected to be a $2.4 billion project. Pembina will become the operator of the project, which has secured its LNG export license and is undergoing environmental assessments by the provincial and federal governments. A final investment decision on the facility is planned in 2023, and it’s projected it could begin operating in 2027.
The announcement comes after Pembina earlier this year announced it was pausing its efforts to develop the $10 billion Jordan Cove project. Pembina cited political and regulatory uncertainty about the project, which has struggled to get regulatory approvals at the state level in Oregon. Boosters of natural gas development in western Colorado’s Piceance Basin long have championed that project due to its potential to provide an outlet to Asian markets for locally produced gas. But it has faced considerable opposition in Oregon from conservation groups, tribes, and landowners along a proposed 229-mile pipeline route that would supply the plant.
Allie Rosenbluth, with project opponent Rogue Climate in Oregon, said it’s hard to tell what impact Pembina’s decision to join in the Cedar LNG project might have on its Jordan Cove project.
But she added, “Pembina has still not outright canceled this project (Jordan Cove) and we are going to continue to put pressure on them until the project is canceled for good and nobody is at risk for this pipeline and export terminal for southern Oregon.”
Project opponents are legally challenging the project’s approval by the Federal Energy Regulatory Commission. This week a federal appeals court denied Pembina’s request that it suspend the legal proceedings because the project is on hold. FERC’s approval gave Pembina the ability to immediately proceed with eminent-domain proceedings to acquire rights-of-way along the pipeline route, and while Rosenbluth said opponents don’t expect Pembina to do that right now, landowners continue to live in dread of that prospect.
Despite FERC’s approval of the project, FERC has declined to override state-level decisions against the project. Pembina can reapply for the state-level permits.
Pembina didn’t immediately respond to a request for comment Wednesday on its new project’s potential implications for Jordan Cove.
John Harpole, who is the owner of a Littleton-based natural gas brokerage and energy market analysis firm and has written a paper about the potential opportunities for Piceance Basin gas to serve Asian markets, said he doesn’t think Pembina’s Cedar LNG decision is the death knell for Jordan Cove. If anything, he thinks it highlights the international interest in exporting gas from the West Coast, which offers a shorter shipping route to Asia compared to LNG that must be shipped through the Panama Canal or around South America.
But he added, “The state regulatory authorities are in my opinion hurting a lot of other people in other states by refusing to export commodities made in the U.S.”
“... How many overseas coal (power) plants will be constructed and continue to operate because our natural gas can’t compete over there?”
A report recently released by the Western States and Tribal Nations Natural Gas Initiative, which supports gas exports, says LNG sourced from Rockies gas and exported to Asia from the West Coast would cut life-cycle greenhouse gas emissions 42-55% if used to replaced coal-fired power.
The report accounts for emissions from everything from gas production, to the LNG supply chain, to power generation in Asia.
”We have to figure out how to get Southeast Asia and India some of this natural gas that we have an abundance of in the western states of North America,” said Jeff Rector, a county commissioner in Rio Blanco County, which like Mesa County is a member of the initiative.
Rector thinks it makes the most sense for Rockies gas to go to Asia from Jordan Cove, but hopes that other facilities like Cedar LNG and the planned Costa Azul LNG project in Mexico also could use Rockies gas. But he acknowledged that Canada “has a ton of gas as well.”
Indeed, Pembina and the Haisla Nation say that Cedar LNG project will source gas from northeast British Columbia.
Cedar LNG would have a liquefaction capacity of about 3 million tons of LNG year, compared to about 7.8 million tons for Jordan Cove.
Pembina and the Haisla Nation say the floating facility is based on a proven, simplified design already in use elsewhere, and would be built in modules at a shipyard in Asia, which will lower the project cost. The project also significantly reduces environmental impacts on the Douglas Channel coastline versus a land-based project, they say.
Rosenbluth says local opposition has arisen against Cedar LNG, just as it has for Jordan Cove.