Phil Castle, The Business Times

Preliminary agreements to purchase liquefied natural gas bode well for the permitting and construction of an export terminal and pipeline that could connect Western Colorado supplies with Asian markets.

“Opening up the Rockies for even a portion of those contracts is a huge deal,” said Michael Hinrichs, director of communications for the Jordan Cove project.

Meanwhile, the continued support of business and government leaders in Western Colorado also will help during federal, state and local permitting processes, Hinrichs said. “Any and all activity out of this area helps.”

Hinrichs offered an update on the Jordan Cove and Pacific Connector projects during a presentation hosted by the Grand Junction Area Chamber of Commerce.

The Jordan Cove liquefied natural gas terminal has been proposed for a location on the Oregon coast near Coos Bay. The Pacific Connector Pipeline would connect the terminal to a hub 230 miles away in Malin, Oregon. At an estimated combined cost of $10 billion, the projects would be the largest commercial ventures in Oregon history, Hinrichs said.

The Ruby Pipeline system in turn connects the Malin hub to natural gas supplies in the Western United States, including the Piceance Basin in Western Colorado.

The Federal Energy Regulatory Commission (FERC) denied the initial application to construct the terminal and pipeline, citing a lack of demand. But a second filing was submitted earlier this year. FERC has been asked to issue a draft environmental impact statement in 2018 and then issue a decision by the end of next year.

By the time the process is complete, the Jordan Cove and Pacific Connector will have been the most publicly vetted projects in the United States, Henrichs said.

If the projects are approved, Jordan Cove could be operational by the end of 2023 or beginning of 2024, Hinrichs said.

Preliminary agreements for liquefied natural gas exports from Jordan Cove as well as capacity on the Pacific Connector Pipeline demonstrate the commercial viability of the projects, Hinrichs said. Those agreements already account for about 50 percent of the capacity of the terminal and 96 percent of the capacity of the pipeline, he said.

Jordan Cove would be ideally located to export LNG to Japan and such other Asian countries as Korea and China, Hinrichs says. It would take only nine days to ship LNG from Coos Bay to Tokyo, half the time it takes to complete the trip from the Gulf Coast of the United States, he said.

Japan ranks among the top LNG importers in the world and would like to add North America to a mix of sources that also includes Russia and the Middle East. While price remains an important factor in natural gas markets, so does economic and political stability, he said.

While customers would decide where  their gas comes from, Hinrichs said the Rockies and Canada likely would be among the diverse sources. “Nobody likes putting all their eggs in one basket.”

The contracts could involve not only large amounts of natural gas, but also extend for 20 years to create a long-term and predictable market unaffected by the traditional ups and downs of the energy industry, he said.

There’s more encouraging news for the Jordan Cove project in the recent acquisition of Veresen by Pembina Pipeline Corp. and resulting creation of one of the largest energy infrastructure companies in Canada, Hinrichs said.

Veresen had been working on the Jordan Cove project for more than a decade and also owned a half interest in the Ruby Pipeline system. Hinrichs said the combined corporation offers even more financial backing for the Jordan Cove project.

Hinrichs also said the Donald Trump administration has signaled its support for an LNG export terminal on the West Coast.

Vocal support from Colorado still will help, though, in getting through the permitting processes, he says. That support resonates in Washington, D.C., as well as Oregon and serves to counterbalance opposition. “Voices from here carry over there.”