Canada’s Pembina Slows Oregon LNG Work

Canadian Pembina Pipeline said May 3 it would slow work on its proposed Jordan Cove LNG project in Oregon this year as it continues to pursue key state and federal approvals ahead of a final investment decision (FID).

Suspending non-permitting work, Pembina said, would delay construction on the project, and first gas is expected to be delayed up to one year from the previously anticipated date in 2024.

A draft environmental impact statement (EIS) – with “reasonable” conditions attached – for the 7.5mn mt/yr liquefaction facility was issued by the US Federal Energy Regulatory Commission (Ferc) in March, but a final decision on the project is not expected from Ferc until January 2020, Pembina said. A pair of critical Oregon state approvals are not expected until near the end of this year.

“Pembina continues to see Jordan Cove as a viable project, however the company has decided to limit pre-FID capital investment on non-permitting related activities,” the company said in releasing its 1Q 2019 financial results. “Pembina has approved incremental funding of approximately C$50mn (US$37mn) for 2019 in support of the remaining critical regulatory and permitting work streams.”

Pembina also said it intends to seek partners for both the liquefaction facility and a proposed pipeline to deliver feed gas to the terminal in an effort to reduce its equity interest in the combined projects to between 40% and 60%.

The process to find partners is expected to commence in early 2020, pending the securing of binding off-take agreements. Pembina has secured non-binding off-take agreements with customers for more than the design capacity of the liquefaction facility.