Liquified Natural Gas | Northwest Coast Energy News

Three new powerful players said to join the BC West Coast LNG export rush

The race to ship liquified natural gas to Asia is getting hotter with three new powerhouses joining the scramble for west coast export terminals.

The Prince Rupert Port Authority announced Tuesday, Feb. 7, that it is working with an energy powerhouse BG Group, on a feasibiity study for an LNG terminal at Ridley Island.

At the same time The Globe and Mail reports that there are rumours that Exxon Mobile is “examining LNG options” in the northwest. The paper also quotes sources as saying the Japanese firm Itochu is looking to export gas via Kitsault, where there is an abandoned molybdenum mine, town and port.

British Gas was once the retail domestic supplier of natural gas to the UK market. The company split in two in 1997, with BG Group becoming an international exploration and energy production company.

Itochu is a 150-year old Japanese company which began as Chibou Itoh’s one man linen trading company, later adding drapery shops and over more than a century expanding operations to become a major international conglomerate with strong interests in the energy sector. According to the company website, Itochu is also a player in the solar energy and bio-ethanol fields.

“The Prince Rupert Port Authority has engaged with the BG Group to consider Prince Rupert for a potential LNG export facility. The BG Group is number two in the world in LNG, next to Shell and they are number two depending on what measurements you look at, so they are already a big player in that industry” according to Shaun Stevenson, vice-president of Marketing and Business Development for the Prince Rupert Port Authority.

“We have an agreement signed to provide them a site and to secure that site to examine the suitability of it and the feasibility of the facility…We have given them a period of time to conduct the feasibility and suitability study, and if it is determined to be viable from the preliminary work that is done then we will look at further development,” he said.

David Byford, spokesman for the BG Group in Houston, confirmed the deal has been signed but cautioned “Prince Rupert is one of the areas we are looking at, and we are in the very early feasibility study stage.”

“The west coast of Canada is certainly advantageous for LNG export, and there is a lot of natural gas in BC as well.”

Prince Rupert port spokesperson Michael Gurney says it will be 12 to 24 months before there’s a clear commitment on the project.

A spokesman with Itochu declined comment when contacted by The Globe and Mail. Kitsault, near Alice Arm, in the traditional territory of the Nisga’a nation, was the site of a short lived molybedenum venture by the Phelps Dodge company. After the mine was abandoned, the town was bought by Indo-American businessman Krishnan Suthanthiran and is now promoted as a nature and wilderness retreat, called Heaven on Earth.

The Globe and Mail also quotes sources as saying that Exxon Mobil Corp., which has substantial natural gas reserves in northeastern B.C., has also been examining LNG options. Pius Rolheiser, a spokesman with Canada’s Imperial Oil Ltd., which is majority-owned by Exxon, said in a statement to the Globe and Mail: “Imperial continuously reviews a variety of opportunities to increase value to our shareholders. As a matter of practice, and for competitive reasons, we do not discuss specific strategies.”

Apache, Shell mark LNG progress at District of Kitimat council

Eurocan site at Kitimat — Apache will build the work camp for the Kitimat LNG project at the old Eurocan site. (Robin Rowland/Northwest Coast Energy News)

As the financial and energy markets speculated Monday, Feb. 6, 2012 that Apache Corporation would make an official announcement during its quarterly webcast next week that the Kitimat LNG project will go ahead, a company report to the District of Kitimat Council, released this evening, is a strong indication that the project is a go.

Mayor Joanne Monaghan told the council that Apache has reported to the district that work at the site for the LNG terminal at Bish Cove has been “progressing well” through the winter and was now “progressing toward the construction phase.” Work so far at Bish Cove includes site preparation, building an access road and a temporary dock for the crew boat.

Monaghan said that Apache will begin work on a work camp for the Kitimat LNG project at the old Eurocan site “shortly.”

Monaghan also that the province of British Columbia told her that it estimates that there will be 800 permanent, long term jobs in British Columbia over the life of the projects 9,000 construction jobs over the 10 to 15 year multi-train (phase) plans from the KM LNG, BC LNG and Shell projects. Premier Christy Clark estimated that LNG projects will bring the province $1 billion in revenue. (For Premier Christy Clark’s statement see Vancouver Province Liberals shift strategy to LNG)

The mayor said that Apache plans to work closely with local contractors in general contracting, supplies, concrete supply, logging and land clearing and other supporting jobs.

Apache will be in competition with Rio Tinto Alcan for the local workforce and contractors. Last Thursday, RTA, which is working on a $3 billion modernization project at the Kitimat aluminum smelter, stole a march on Apache, by holding a day long conference for contractors and suppliers across British Columbia, including a tour of the plant, so they could bid on work during that project.

At the same meeting, district council was told that Shell has begun the official transition in its takeover the old Methanex site, which it recently purchased from Cenovus by applying for a licence of occupation at the site, which included asking for permission under district of bylaws to put a Shell Canada sign at the entrance to the site, replacing the current Methanex sign. The old Methanex site will be the base for Shell’s plans for its LNG project.

(This story has been updated and corrected after checking Christy Clark’s statement on LNG which at the council meeting was attributed, in part, to Apache)

CIBC analyst speculates on one big natural gas pipeline to Kitimat as rumours persist that Apache decision on KM LNG will come next week

There is increasing speculation in the financial and energy markets that Apache Corporation, the lead investor in KM LNG partners, who propose to build the Kitimat LNG project will announce the investment decision next week. If the decision is positive, and it is expected to be positive, that means the work underway at the Bish Cove site will ramp up to full construction.

The speculation is heightened by the fact that the two other partners in KM LNG, Encana and EOG, report the following morning. Rumours on the Kitimat announcement began after Encana delayed its announcement by a week from its normal time in early February. (At that time one energy market analyst who follows NWCEN on Twitter contacted this site to ask if there were rumours here. At that time, there were none)

Apache has scheduled a fourth quarter report conference call and webcast from its headquarters in Houston, Texas, Feb. 16, 2012, at 1 pm Central Time.

Apache has always said that the go/no-go decision on the Kitimat project would come in the first quarter of 2012.

The market speculation, however, may not be entirely good news. That’s because this morning, Andrew Potter, of CIBC World Markets, told a conference call that the rush to export liquified natural gas from northeastern BC and Alberta to Kitimat would mean building one or two large natural gas pipelines, instead of several small ones, to reach the terminal projects.

Reuters quoted Potter as saying: “There is no logic at all to seeing three to five facilities built with three to five independent pipelines,” he said.

At the moment, the just approved BC LNG project, a cooperative of 13 energy companies, plans to utilize the existing Pacific Northern Gas facilities which already serve northwestern British Columbia. The PNG pipeline roughly follows the communities it serves along Highway 16. KM LNG is in partnership with the Pacific Trails Pipeline project, which would take that pipeline across country.

The third LNG project, by Shell, is still in the planning stages, but it, too, would need pipeline capacity.

Although there is general support for the LNG projects in northwestern BC, and less controversy over natural gas pipelines, last fall, members of one Wet’suwet’en First Nation house blocked a survey crew for Apache and Pacific Trail Pipelines who were working near Smithers on that house’s traditional territory. The survey project was then stood down for the winter.

The fear among some First Nations leaders and environmentalists is that the Pacific Trails Pipeline could, intentionally or unintentionally, open the door to much more controversial Enbridge Northern Gateway bitumen pipeline, since the PTP and Northern Gateway could follow the same cross country route.

Whether or not Potter intended to stir up a hornet’s nest, he likely has. What appears to be logical and economic for a CIBC analyst in a glass and steel tower, one or two giant natural gas pipelines, is now likely going to be fed in to, so to speak, and amplify the controversy over the Northern Gateway pipeline.

Potter also told the conference call that together the natural gas projects do not have enough gas in the ground to support the export plans. That means, Potter said, more acquisitions and joint venture deals in the natural gas export sector. Bob Brackett of Bernstein Research, quoted by Alberta Oil magazine, also says there will likely be consolidation of Kitimat LNG projects, since there was similar consolidation in Australia.

Apache Corp. Fourth quarter reporter webcast page.

PNG System map — The existing Pacific Northern Gas Pipeline follows Highway 16 (PNG)

The Pacific Trails Pipeline (yellow and black) would go cross country to Kitimat. The existing PNG pipeline, seen in the above map, is marked in red on this map. (PTP)

The Northern Gateway Pipeline also goes cross country, on a similar route to the proposed Pacific Trails Pipeline. (Enbridge)

PetroChina looks to Kitimat as it spends $1 billion for Shell shale gas in northeastern BC

PetroChina has bought a 20 per cent stake in Shell Canada’s Groundbirch shale-gas project in north eastern BC, leading to media reports that PetroChina is also investing in Shell’s planned Kitimat liquified natural gas export terminal in Kitimat.

The Groundbirch “play” in the northeastern BC shale gas fields produces 180 million cubic feet of gas a day form 250 wells.

A Hong Kong website, FinanceAsia, reported that PetroChina is paying $1 billion for the stake in the northeast BC shale gas operation.

China Daily confirmed the story, quoting Mao Zefeng, the Beijing-based spokesman of PetroChina, who declined to give the value of the transaction.

China Daily said Shell and PetroChina’s parent agreed in June to increase cooperation in energy exploration in China, estimated to hold the world’s largest reserves of shale gas. The semi-official newspaper says Petro China is looking to Canada to obtain drilling technology and expertise.

“It’s a continuation of our cooperation in China, and we can learn about shale-gas exploration and production by being a partner in the Canadian shale-gas project,” Mao said. “The project will also bring us good investment returns.”

Barron’s also reported that China is looking to get more experience shale gas, quoting Benchmark analyst Mark Gilman who told Dow Jones Newswires. “They are trying to learn about this business, on the basis of their belief that it will better position them to assess and develop similar resources within China,” he said. In fact, Shell and PetroChina are exploring for shale together in China, so the Canadian deal may be a “quid pro quo” gesture to Shell, he added.

Shell executives said at a meeting in London on Thursday that the company has invested $400 million in shale gas exploration in China, funding 15 wells with more in the future.

Last fall, Shell purchased the old Methanex site and the Methanex marine terminal in Kitimat.

Both The Globe and Mail and Postmedia News are tying the investment directly to Shell’s Kitimat LNG export project.

The Globe and Mail says that PetroChina as well as Japan’s Mitsubishi and Korean Gas are stakeholders in the Shell Kitimat LNG project.

PetroChina’s had agreed with Encana, a partner in the KM LNG project to invest $5.4-billion in the company’s shale gas operations in British Columbia. That deal collapsed last fall after the two companies could not agree on finances.

PetroChina is also a heavy investor in the Alberta bitumen sands.

The deal between PetroChina and Shell came on the same day that National Energy Board approved the BC LNG project, the second one to be proposed for Kitimat. The first, approved in October, is the Kitimat LNG project owned by the KM LNG partnership.

It also comes a few days before Prime Minister Stephen Harper begins an official visit to China.

NEB approves BC LNG, second Kitimat LNG project

The National Energy Board has approved a 20-year-export licence for Kitimat’s second LNG project, known as BC LNG. A NEB news release says:

The export licence authorizes BC LNG to export 36 million tonnes of LNG, which is equivalent to approximately 47.9 billion m³ of natural gas, over a 20 year period.

The maximum annual quantity allowed for export will be 1.8 million tonnes of LNG, which amounts to approximately 2.4 billion m³of natural gas.

A co-operative comprised of natural gas producers, marketers and LNG buyers is a central feature of BC LNG’s export proposal, where members of the co-operative will submit bids to provide natural gas to be liquefied or purchase LNG.

A committee will review the bids and choose those that will yield the greatest margin to the co-operative. Membership in the co-operative is currently comprised of thirteen parties, and additional members may join upon request.

BC LNG’s export model permits smaller natural gas market participants in Canada to play a part in exporting LNG. In approving BC LNG’s application, the Board satisfied itself that the quantity of gas to be exported is in excess of the requirements to meet the foreseeable Canadian demand.

The Board also determined that the volumes of natural gas proposed to be exported are not likely to cause Canadians difficulty in meeting their energy requirements at fair market prices.

The Board acknowledged the potential economic benefits associated with BC LNG’s project. In particular, the Board noted the benefits for the Haisla Nation, including an interest in BC LNG, and employment opportunities resulting from the development and operation of the liquefaction facility.

BC LNG Map — Map showing the BC LNG site in Kitimat harbour (NEB)

The Haisla Nation has a 50 per cent stake in the project through the Hasila Nation Douglas Channel Limited Partnership.
The NEB says the Haisla say the new revenue source would allow the First Nation to support health, education, community development and the many other needs of the First Nation and its members. The Haisla say that business and
employment opportunities associated with the development of the LNG terminal and associated
facilities would be available for Haisla members and businesses.

The NEB also says that the Haisla indicated
that a number of other Aboriginal persons, businesses and nations would see economic spinoff benefits from the development.

The NEB decision says there will be two “liquefaction trains” on barges in Kitimat harbour. The
first train is scheduled to commence in 2013-14 and the second train in 2016-18. Each train will
have a daily volume requirement of 3.5 million cubic metres a day (125 MMcf/d) of natural gas. After completion of both trains, the terminal will have an annual liquefaction capacity of 1.8 million tonnes of LNG.

LNG from the Terminal will be pumped directly into an LNG tanker berthed adjacent to the barge. It will take about 30 days to fill a typical LNG tanker and approximately 25 days to make the roundtrip between Kitimat and markets in Asia.

Talisman Energy Inc. and Tenaska Marketing Canada both have a stake in the project.

The NEB approved the first project, known as Kitimat LNG, operated by the KM LNG partnership on October 13, 2011.

That export licence authorized KM LNG to export 200 million tonnes of LNG (equivalent to

BC LNG pipeline map — Map of pipelines that will feed the BC LNG project (NEB)

approximately 265 million 10³m³ or 9,360 Bcf of natural gas) over a 20 year period. The maximum annual quantity allowed for export will be 10 million tonnes of LNG (equivalent to approximately 13 million 10³m³ or 468 Bcf of natural gas). The supply of gas will come from producers located in the Western Canada Sedimentary Basin. Once the natural gas has reached Kitimat by way of the Pacific Trail Pipeline, the gas would then be liquefied at a terminal to be built in Bish Cove, near the Port of Kitimat.

A third LNG project by Shell Canada, which will use the old Methanex site in Kitimat and the old Methanex marine terminal in Kitimat harbour is currently in the preliminary planning stages.

The NEB hearings on the LNG projects are different from the current Joint Review Panel hearings on the Enbridge Northern Gateway Pipeline. The JRP hearings are a “facility hearing” and cover the entire project, including environmental impacts. Since neither LNG project actually crosses a provincial boundary, the NEB’s jurisdiction is limited to granting the export licence.

Editorial: Just asking: why didn’t anyone object to the Americans at the NEB LNG hearings in Kitimat?

The Joint Review Panel hearings on the Northern Gateway pipeline are less than 48 hours from now. The media are packing their bags and coming to Kitimat (or perhaps Terrace since this town is booked solid).

The propaganda war, and it can only be called a propaganda war, is in full force, driven mostly by right wing columnist Ezra Levant and his Ethical Oil organization, objecting to “foreign intervenors in the pipeline hearings at another site OurDecision.ca

This now seems to have widespread support, in a Twitter debate last night, many even moderate conservatives and even moderate Albertans were saying there is too much foreign influence in the JRP hearings.

I have one question for these people. Where were you in June? On a beach?

It was in June that the National Energy Board held hearings on the first of the three proposed Liquified Natural Gas projects in Kitimat. No media hordes descended on Kitimat. At those hearings only local reporters showed up and I was the only one that stuck through the entire proceedings. (The NEB did approve the export application)

So when the media quote Levant and his spokesperson Kathryn Marshall, the widespread stories about this malevolent foreign influence are inaccurate because they weren’t in Kitimat in June so they didn’t hear all those deep Texas drawls in the hearing room at the Riverlodge Recreation Centre.

Although a lot of good reporters are coming into town this week, they’ll all be gone by Thursday morning when the JRP hearings move on to Terrace.

So in today’s Sun Media papers Levant says:

Who should decide whether Canada should build an oil pipeline to our west coast — Canadian citizens or foreign interests?
That’s what the fight over the Northern Gateway pipeline is about. Sure, it’s also about $20 billion a year for the Canadian economy and thousands of jobs. It’s about opening up export markets in Asia. It’s about enough new tax dollars to pay for countless hospitals and schools.
But it’s really about Canadian sovereignty. Do we get to make our own national decisions, or will we let foreign interests interfere?
The answer should be obvious to any self-respecting Canadian: This is a Canadian matter, and Canadians should decide it.

Why weren’t Levant and the rest of the blue-eyed sheikh crowd (OK they don’t all have blue yes but you know what I mean) across the Rockies here in June objecting to those Americans interfering in Canadian affairs with their plans to export liquefied natural gas to Asia?

Who is behind the Kitimat LNG project? Well, the KMLNG partners are Houston, Texas based Apache Corporation, Houston, Texas based EOG Resources and Encana, a company that originated in Canada but now has extensive operations in the United States and around the world.

The second LNG project, which is now before the National Energy Board, is BC LNG, a partnership between a Houston, Texas-based energy company and the Haisla First Nation here in Kitimat.

The third LNG project is coming from energy giant Royal Dutch Shell.

When are we going to see Ethical Oil and all those conservative columnists objecting to American participation when the NEB holds hearings on the second and third LNG projects?

This goes all the way to the centre of power. Stephen Harper objects to the Northern Gateway hearings being “hijacked by foreign money.” I notice the Prime Minister didn’t object to the hearings in June with American companies Apache and EOG investing in a natural gas pipeline. Cabinet ministers Joe Oliver and Peter Kent are also concerned about foreign influence on pipeline projects. That is they are only worried about possible foreign influence when it comes to the environment. Foreign influences that are building natural gas pipelines and LNG terminal facilities are perfectly fine, thank you.

Blaming “foreign influence”, of course, is one of the oldest dirty tricks in the political playbook. In recent days Russian Prime Minister Vladimir Putin has blamed foreign influence for the demonstrations against the rigged election in that country. In Syria, Bashir al-Assad is still blaming “foreign agitators” for the revolt against his regime. Before they were ousted, both Hosni Mubarak of Egypt and Mohamar Gaddafi of Libya blamed “foreign agitators” for the Arab Spring. Go to Google News and type in “foreign influence” or “foreign agitators” and now that Google News also searches news archives, you can find stories of politicians all over the world blaming foreigners for their troubles going back to the turn of the last century.

It’s just sad to see Canada’s leading politicians and the major media joining that sorry tradition.

Note Natural Gas is not bitumen

Some in the media seems to be puzzled that most of the people in northern British Columbia are not objecting to the liquified natural gas projects. The media seem puzzled that KM LNG has been able to reach agreements with First Nations along the natural gas pipeline routes when Enbridge can’t.

(One factor is that Enbridge got off on the wrong foot with First Nations and things have generally gone downhill from there, leading people in northwest BC to question the general competence of Enbridge management.)

The answer is that natural gas is not bitumen. Natural gas is known factor. Bitumen, despite the thousands of pages of documents field by Enbridge with the JRP, is an unknown factor since there has never been a major bitumen disaster.

The worst case scenario, a catastrophic LNG ship explosion, could cause a huge forest fire. A natural gas pipeline breach under the right conditions could start a big forest fire. The environment of northwestern British Columbia has evolved to deal with fires. After such an incident, nature would take over and the forest would eventually come back. It is likely that the forest would take longer to recover than it would from a lightning strike fire, but the forest would recover. Bitumen leaking into salmon spawning rivers would kill the rivers. Bitumen stuck at the deep and rocky bottom of Douglas Channel would contaminate the region, probably for centuries.

It’s that simple.

Related Terrace Daily No Apology Forthcoming by Gerald Amos

Alaska governor meets with three energy CEOs to push North Slope LNG exports to Asia

Alaska Governor Governor Sean Parnell met with the chief executive officers from BP, ConocoPhillips and Exxon Mobil on January 5, 2012, to discuss alignment between the three companies on commercializing the North Slope’s vast natural gas reserves.

A news release from the governor’s office says Parnell asked “the three companies – the major lease holders for natural gas reserves on the North Slope – to work together on developing a liquefied natural gas (LNG) project that focuses on exporting Alaska North Slope gas to Asia’s growing markets.”

The release says that governor is targeting LNG exports to Asia to serve the growing demand for natural gas. That would make an Alaska LNG export terminal a rival to the three projects at Kitimat and another proposed project in Oregon.

Parnell and the CEOs – Bob Dudley of BP, Jim Mulva of ConocoPhillips and Rex Tillerson of Exxon Mobil – met for two hours. During the meeting, the governor’s release says, the CEOs briefed the governor on the extensive work they’ve been doing in response to his request. After meeting with the governor, the three CEOs briefed members of the Alaska state legislature.

Alaska governor meets with Energy CEOs — Governor Sean Parnell met in Anchorage Jan. 5, 2012, with the chief executive officers from BP, ConocoPhillips and Exxon Mobil to discuss alignment between the three companies on commercializing the North Slope’s natural gas reserves.(Alaska governor's office)

“I appreciate the willingness of the chief executives to come to Alaska to discuss the important topic of commercializing North Slope gas,” Parnell said. “For a gas project to advance, all three companies need to be aligned behind it. This meeting is an important step, but much work remains.”

The Associated Press reports that Parnell wants the companies to unite under the framework of the Alaska Gasline Inducement Act, which gave TransCanada Corp. an exclusive state license to build a pipeline and up to $500 million in state incentives.

AP says TransCanada has been working with Exxon Mobil to advance the project but has yet to announce any agreements with potential shippers.

TransCanada has focused most of its attention on a pipeline that would deliver gas to North American markets through Alberta to Canada and the Lower 48 states. TransCanada has also proposed a smaller pipeline that would allow for liquefied natural gas exports through a terminal at the oil export port of Valdez. A rival project, a joint effort of BP and ConocoPhillips that also would have gone through Canada, folded last year.

The Alaska Journal of Commerce reports BP and ConocoPhillips believe a major liquefied natural gas project is the best option for marketing North Slope gas, quoting the chief executive officers of the two companies Robert Dudley of BP and James Mulva of ConocoPhillips.

“Given the outlook with shale gas in the Lower 48, it looks like LNG has the best potential. We’re not saying the pipeline (to Canada) is impossible,” but a pipeline to southern Alaska to an LNG plant appears to have the best prospects, BP CEO Dudley told reporters following the meetings with Parnell and legislators.
ConocoPhillips’ Mulva agreed with Dudley. “We believe LNG is the best alternative for North Slope gas, far better than any alternatives,” Mulva said.

Oregon moves to block Jordan Cove LNG project

Energy LNG Politics

The state of Oregon has filed a motion with the US Federal Energy Regulatory Commission (the American equivalent of the National Energy Board) to block, perhaps temporarily, the Jordan Cove Liquified Natural Gas project at Coos Bay, Oregon.

Experts at the June NEB hearings in Kitimat testified by the Jordan Cove could be Kitimat’s chief rival as an LNG terminal.

Like the plans for Kitimat in the early 2000s, the Jordan Cove facility was originally planned as an import terminal and the FERC eventually did issue a permit for the construction of the import terminal.

In the meantime, the natural gas market changed, with the growth in the hydraulic fracturing to retrieve gas from shale deposits. In September, the company involved, Jordan Cove LP applied to the Department for authorization to export natural gas. At the time the company said it intended to ask the Commission in early 2012 to amend its existing authorization to add export facilities.

On Dec. 2, 2011, the Oregon Dept. Of Justice filed a motion with the FERC to revoke the approval of the LNG terminal in Coos Bay and reopen the record so the state can submit evidence that a revised terminal proposal is not in the public interest.

Oregon wants the company to file a new application, arguing that is more appropriate than amending of the import application.

The filing says: “The facts demonstrate a change in core circumstances that goes to the very heart of the case. The heart of this case is whether the Jordan Cove LNG import terminal is in the public interest and the pipeline is required by public convenience and necessity….

Oregon wonders how the “additional imported natural gas supply” would benefit the state and how that would outweigh “the adverse impacts on private landowners and the environment.”

Oregon says that “any benefit that may have existed when the import Project was proposed, no longer exists to offset the adverse impacts of the Project.”

The filing also argues that if the United States exports natural gas through Oregon that will increase domestic prices. It also argues that there hasn’t been enough consideration about the environmental impact of the liquefaction facility.

“This is the right thing to do, to tell them we don’t accept this bait and switch with Jordan Cove,” said Dan Serres, an organizer with the conservation group Columbia Riverkeeper, told the Oregonian newspaper.

Bob Braddock, project manager for Jordan Cove, told the Oregonian he wasn’t surprised by the filing, claiming that Oregon Attorney General John Kroger has made no secret of his opposition to any LNG terminal since before he took office

Braddock repeated arguments familiar to northwest BC from both the LNG and Enbridge Northern Gateway projects, saying the public interest in the pipeline and export terminal includes jobs, tax revenue and pipeline interconnections that would bring a better gas supply to southern Oregon.

A few days earlier, on Nov. 22, the U.S. Fish and Wildlife filed a letter with the FERC, saying it was not being kept up to date about changes in plans by Jordan Cove for the LNG terminal and so could not fully assess the environmental impact. The letter said the project’s mitigration plan had not been provided in sufficient detail and assurance about theit nature, location, effects and implementation. The Fish and Wildlife Service also noted that the company had not addressed or supplied information on the impact the LNG project might have on the program to help the recovery of the Northern Spotted Owl population. In fact, according to the Fish and Wildlife filing the plans were so inadequate that it wasn’t possible to begin formal consultations with company over environmental impacts.

Opponents of the project note that Oregon will probably have the final say on the project, since the terminal location is on state-owned land and the state must approve the leases.

Oregon motion to FERC to set aside order (pdf)

Fish and Wildlife Jordan Cove letter (pdf)

Giant Japanese energy consortium buys into BC shale gas

Energy

A large Japanese consortium lead by Inpex Corporation has agreed to buy a 40 per cent stake in shale gas assets owned by Calgary-based Nexen, an energy exploration company.

A Nexen news release calls the deal “a strategic partnership.” The deal is worth $700 million and covers the development of shale gas deposits in the Horn River, Cordova and Liard basins in northeast BC

Inpex is a partner with Shell in an Indonesian liquified natural gas project. Shell recently purchased the old Methanex site and marine terminal in Kitimat.

Nexen will continue to manage operations at the deposits.

The news release quotes Marvin Romanow, Nexen’s President and Chief Executive Officer, as saying :”This joint venture represents a significant milestone in the advancement of our shale gas strategy and the premium over our invested cost shows the value we have created in a short time. The transaction provides us with world-class partners that have significant upstream and LNG expertise. It also recognizes the outstanding team we have put in place and the execution excellence they have consistently demonstrated.”

The Nexen release goes on to say:

Inpex currently conducts 71 oil and gas projects in 26 countries, making them Japan’s largest oil and gas exploration and production company. They are engaged in exploration, development and production activities around the globe with production of over 400,000 boe/d and have the largest oil and gas reserves and production volume of any Japanese E&P company.

Inpex brings significant LNG expertise and market access to the partnership. They own interests in large LNG projects including resource in both Indonesia and Australia and are building a regasification terminal in Japan. Inpex holds a 76% working interest in the Ichthys LNG project offshore Australia and is the operator. The project is expected to deliver LNG production volumes of 8.4 million tonnes per year. Inpex holds a 60% working interest in the Abadi LNG project offshore eastern Indonesia and is the operator (in July 2011, Inpex signed an agreement with Shell for transfer of a 30% participating interest. This transaction is subject to certain conditions). The project is expected to deliver LNG production volumes of 2.5 million tonnes per year. The production volume from these two projects is equivalent to 15% or more of Japan’s current LNG annual import volumes.

Energy industry tweeters are already speculating that the natural gas will likely be exported through Kitimat.

Shell’s LNG terminal plans “substantially larger” than rivals: Globe and Mail

The Globe and Mail reports Shell eyes LNG terminal in B.C. that would overshadow Kitimat

A group of major international energy partners led by Royal Dutch Shell PLC is contemplating an LNG export terminal for the British Columbia coast that is substantially larger than a rival’s project that could soon begin construction.

Shell, which has teamed with Korea Gas Corp., China National Petroleum Co. and Mitsubishi Corp., is looking to load 1.8 billion cubic feet a day of natural gas onto tankers bound for Asian markets, officials with Spectra Energy Corp. ) revealed Tuesday.

The Globe and Mail says Spectra spokesman Peter Murchland said Shell project would generate 1.8 billion cubic feet of natural gas a day, That compares to the 1.4-billion cubic feet a day proposed by Kitimat LNG,