Another entrant in the race to export liquefied natural gas (LNG) from the West Coast has stumbled—potentially closing the door on another outlet for B.C. gas.
Last week, Jordan Cove LNG, a project based in Oregon, was denied a permit from the U.S. Federal Energy Regulatory Commission (FERC), which ruled the benefits of the $5.3-billion export terminal and associated pipeline did not outweigh "adverse effects" on landowners facing potential expropriation.
One of the FERC's main concerns was a lack of firm purchasing agreements for gas.
The company is owned by Veresen Inc., a major midstream player with assets in the Dawson Creek area. While a source for the gas has not been nailed down, the project could have been a outlet for gas produced in the Montney shale near Dawson Creek.
Dawson Creek Chamber of Commerce Executive Director Kathleen Connolly worried the decision could further limit market access for B.C. oil and gas producers.
"We need that project. I'm going to remain hopeful they'll go forward with it anyhow. But I'm sure (the FERC decision) has thrown everything into a bit of chaos," she said
"There's so much bad news out there right now," she added, of the state of the natural gas industry.
Project spokesperson Michael Hinrichs said gas could come from fields in B.C., but stressed those details are still up in the air.
"We have an export licence from Canada and an import licence from the U.S., so we would be able to take gas from the Colorado Rockies, the Canadian Rockies, Alaska gas," he said. "The project, as it stands right now, is pretty much open access. We would be able to talk to suppliers around the U.S. and Canada."
He added the company plans to appeal the FERC decision by the April 11 deadline.
"It's fully our intention to (appeal)," he said.
In late 2014, Encana Corp. sold more than $400 million worth of gas compression stations and pipelines to Veresen. The company recently began work on a $930 million expansion of its existing Saturn natural gas plan near Groundbirch.
It's the latest piece of bad news for B.C.'s nascent LNG industry, which faces a worldwide supply glut and a collapse in prices.
Last month, AltaGas Inc. announced plans to shelve Douglas Channel LNG, a floating facility slated for Kitimat. It was the first B.C. LNG project to be postponed indefinitely.
Meanwhile, Petronas-led Pacific NorthWest LNG continues to wind its way through the regulatory process. The Canadian Environmental Assessment Agency received more than 30,000 submissions on the project during a recent public comment period.
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