Jordan Cove LNG proposal sacked by U.S.

CALGARY • In another setback for the Canadian liquefied natural gas industry, the U.S. Federal Energy Regulatory Commission has denied an application to build a pipeline to supply gas to a proposed LNG project.

Calgary- based Veresen Inc. has been trying to sign up customers for its pro- posed $ 5.3 billion Jordan Cove LNG plant on the coast of Oregon, but confirmed this week the project still had yet to sign its first major offtake agreement.

“We will provide some guidance to the market as we get a little closer and get our first buyer signed up,” Veresen president and CEO Don Althoff said during his company’s earnings call on Thursday.

On Friday, the FERC cited that lack of customers as the reason for denying a permit for the Pacific Connector pipeline that would link natural gas supplies to the Jordan Cove project.

FERC c ommissioners wrote an order that said the “authorization for commencement of construction would not be granted until the Pacific Connector has successfully executed con- tracts for a certain level of service.”

The order also said it would not issue a certificate to allow the project to proceed “in what we find to be the absence of a demonstrated need for the pipeline.”

Analyst Steven Paget of First Energy Capital said the news was “shocking” but perhaps should not have been given the regulator’s duty to ensure need before giving approval.

“It’s a huge surprise,” he said. “I thought approval was very likely.”