Backers suspend Bradwood Landing liquefied gas terminal near Astoria
By Ted Sickinger, The Oregonian, May 04, 2010
NorthernStar Natural Gas Inc. said Tuesday that it is suspending
efforts to develop a liquefied natural gas import terminal at
Bradwood Landing on the Columbia River, 25 miles east of Astoria.
The announcement ends a six-year effort that consumed as much as $100
million of investors' capital and countless hours of regulatory work
while sparking a firestorm of public opposition from property owners
and environmentalists.
The Houston-based energy development company sent out a one-page news
release Tuesday afternoon quoting NorthernStar President Paul Soanes
saying extended delays in state and federal permitting and the
difficult investment environment "have forced us to suspend
development."
The company characterized its move as a "suspension" of the project,
not a termination. It did not return follow-up calls on Tuesday.
Mike Carrier, natural resources policy director for Gov. Ted
Kulongoski, said the company told him Tuesday that another developer
could conceivably resurrect the project. But Carrier said the company
told him its financial backer, a private equity fund that has put
$100 million into the company's LNG proposals in Oregon and
California, was pulling the plug.
NorthernStar began development work nearly six years ago at an
abandoned mill site on the lower Columbia River. At the time, gas
prices were high and importing the commodity to the United States
from abroad seemed like a lucrative opportunity.
LNG is natural gas that has been superchilled to a dense liquid for
transportation on oceangoing tankers. It is then regasified and
shipped via pipeline for local consumption or storage.
In addition to regulatory delays, NorthernStar's investors were
doubtless focusing on the fact that domestic reserves of natural gas
have soared in recent years with the advent of new drilling
techniques to access unconventional reserves in shale formations.
That increased supply, in tandem with the economic recession, has put
domestic gas prices into a free fall, undermining LNG terminals that
recently opened on the Gulf of Mexico and in Baja, Mexico, and
casting doubts on efforts to build any more.
Two other companies are still trying to obtain federal and state
permits to build similar LNG import terminals in Oregon. One is in
Warrenton, just west of Astoria on the Columbia River, and the other
is in Coos Bay on the central coast. Those projects are also
competing with a proposed pipeline that would import more gas from
Wyoming to customers in Oregon and California.
Many observers think the first project to reach the regulatory finish
line will pre-empt the others, leading competitors to abandon their
projects.
Peter Hansen, chief executive of the Oregon LNG project in Warrenton,
said his company remains committed to developing its project. "We
believe that it is in the Pacific Northwest consumers' best interest
to have access to all sources for clean, efficient energy such as
LNG," Hansen said.
Bradwood's suspension also has implications for a controversial
200-mile pipeline that Northwest Natural Gas Co. and TransCanada
Corp. were planning to build to connect the LNG terminal with an
interstate pipeline in central Oregon near Maupin.
The Palomar pipeline, as it's known, has attracted as much
grass-roots opposition as the LNG terminals -- though its backers
have consistently maintained that the projects weren't linked -- and
they intended to go ahead with an eastern section of the pipeline
even if Bradwood didn't happen. That section of pipe would transfer
gas from the interstate pipeline in central Oregon to customers in
the Willamette Valley.
In a statement e-mailed Tuesday, NW Natural Chief Executive Gregg
Kantor said his company remained committed to that project. "It's our
belief that if an LNG terminal is not built in the Northwest, the
east segment of Palomar increases in importance as a way to bring
additional domestic supplies from the Rocky Mountains and western
Canada and to enhance system reliability across the region," he said.
Project opponents nevertheless celebrated the announcement by NorthernStar.
"It's a huge victory for Oregonians, for family farms, for clean
water, for salmon habitat, for fisherman," said Brett VandenHeuvel,
executive director of the conservation group Columbia Riverkeeper.
"LNG has no place in Oregon, not only Bradwood Landing but the other
two LNG terminals are not viable projects either."
- Ted Sickinger
NorthernStar Natural Gas Inc. said Tuesday that it is suspending
efforts to develop a liquefied natural gas import terminal at
Bradwood Landing on the Columbia River, 25 miles east of Astoria.
The announcement ends a six-year effort that consumed as much as $100
million of investors' capital and countless hours of regulatory work
while sparking a firestorm of public opposition from property owners
and environmentalists.
The Houston-based energy development company sent out a one-page news
release Tuesday afternoon quoting NorthernStar President Paul Soanes
saying extended delays in state and federal permitting and the
difficult investment environment "have forced us to suspend
development."
The company characterized its move as a "suspension" of the project,
not a termination. It did not return follow-up calls on Tuesday.
Mike Carrier, natural resources policy director for Gov. Ted
Kulongoski, said the company told him Tuesday that another developer
could conceivably resurrect the project. But Carrier said the company
told him its financial backer, a private equity fund that has put
$100 million into the company's LNG proposals in Oregon and
California, was pulling the plug.
NorthernStar began development work nearly six years ago at an
abandoned mill site on the lower Columbia River. At the time, gas
prices were high and importing the commodity to the United States
from abroad seemed like a lucrative opportunity.
LNG is natural gas that has been superchilled to a dense liquid for
transportation on oceangoing tankers. It is then regasified and
shipped via pipeline for local consumption or storage.
In addition to regulatory delays, NorthernStar's investors were
doubtless focusing on the fact that domestic reserves of natural gas
have soared in recent years with the advent of new drilling
techniques to access unconventional reserves in shale formations.
That increased supply, in tandem with the economic recession, has put
domestic gas prices into a free fall, undermining LNG terminals that
recently opened on the Gulf of Mexico and in Baja, Mexico, and
casting doubts on efforts to build any more.
Two other companies are still trying to obtain federal and state
permits to build similar LNG import terminals in Oregon. One is in
Warrenton, just west of Astoria on the Columbia River, and the other
is in Coos Bay on the central coast. Those projects are also
competing with a proposed pipeline that would import more gas from
Wyoming to customers in Oregon and California.
Many observers think the first project to reach the regulatory finish
line will pre-empt the others, leading competitors to abandon their
projects.
Peter Hansen, chief executive of the Oregon LNG project in Warrenton,
said his company remains committed to developing its project. "We
believe that it is in the Pacific Northwest consumers' best interest
to have access to all sources for clean, efficient energy such as
LNG," Hansen said.
Bradwood's suspension also has implications for a controversial
200-mile pipeline that Northwest Natural Gas Co. and TransCanada
Corp. were planning to build to connect the LNG terminal with an
interstate pipeline in central Oregon near Maupin.
The Palomar pipeline, as it's known, has attracted as much
grass-roots opposition as the LNG terminals -- though its backers
have consistently maintained that the projects weren't linked -- and
they intended to go ahead with an eastern section of the pipeline
even if Bradwood didn't happen. That section of pipe would transfer
gas from the interstate pipeline in central Oregon to customers in
the Willamette Valley.
In a statement e-mailed Tuesday, NW Natural Chief Executive Gregg
Kantor said his company remained committed to that project. "It's our
belief that if an LNG terminal is not built in the Northwest, the
east segment of Palomar increases in importance as a way to bring
additional domestic supplies from the Rocky Mountains and western
Canada and to enhance system reliability across the region," he said.
Project opponents nevertheless celebrated the announcement by NorthernStar.
"It's a huge victory for Oregonians, for family farms, for clean
water, for salmon habitat, for fisherman," said Brett VandenHeuvel,
executive director of the conservation group Columbia Riverkeeper.
"LNG has no place in Oregon, not only Bradwood Landing but the other
two LNG terminals are not viable projects either."
- Ted Sickinger
posted by Friend of Texada at
2:35 AM
<< Home