June 2009 Vol. 236 No. 6

Government

FERC Pushes Two Projects Forward

FERC has moved closer to approving construction of one of the three big Oregon LNG projects as well as a major new pipeline in the Southeast.

The commission staff submitted a final environmental impact statement (EIS) on the Jordan Cove LNG project in Oregon and the associated 234-mile Pacific Connector Gas Pipeline plus a draft EIS on the 483-mile Florida Gas Transmission (FGT) Company’s Phase VIII Expansion Project.

Bob Braddock, the project manager for Jordan Cove, says he thinks FERC could approve construction as early as July. The mitigation requirements contained in the final EIS would pose no problem for Jordan Cove. They are essentially the same ones that were in the draft EIS and many of the mitigation steps had been proposed initially by Jordan Cove.

It is important to note, however, that even if FERC approves construction, Jordan Cove will vie with two other Oregon LNG terminal/pipeline combos for commercial support. Only one will be built, acknowledges Braddock. That decision will probably be made by the suppliers of LNG, who Braddock expects to be mostly Australian companies, some of whom are in the process of considering building liquification facilities in Australia. They will decide which Oregon LNG facility to sign contracts with, probably by the end of 2009, again according to Braddock. Jordan Cove will be vying with the Oregon LNG terminal in Astoria and the Northern Star terminal in Bradwood Landing, the latter of which FERC approved last year.

The Florida pipeline is one of the longest-mile projects pending at FERC, and now the furthest along (except for Jordan Cover) with the publication of the draft EIS. FERC held public hearings in May in Florida on the draft. The project doesn’t appear to be terribly complicated, from an environmental or landowner perspective, since more than 99% of its miles would follow existing rights-of-way. FGT extends from South Texas along the Gulf Coast through Louisiana, Mississippi, Alabama, and into Florida.  The gas could come from Texas or offshore and be carried to Florida.

John Barnett, Director of External Affairs, Southern Union Company, says FGT had an open season for the expansion project from mid January to mid February 2008.

“To date, Florida Gas has entered into precedent agreements with shippers for transportation services for 25-year terms accounting for approximately 74% of the available expansion capacity.” Depending on elections by one of the shippers, that may increase to 83% of such capacity, Barnett explains.