On March 24, 2014, the Department of Energy granted a conditional order authorizing the export of
domestically produced liquefied natural gas (LNG) from the Jordan
Cove Energy Project, L.P. in Coos Bay, Oregon, to countries that do
not have a Free Trade Agreement (FTA) with the United States.
Jordan Cove is wholly owned and controlled by Veresen, Inc., a
Canadian corporation based in Calgary, Alberta.
Federal law generally requires approval of natural gas exports
to countries that have an FTA with the United States. For countries
that do not have an FTA, the Natural Gas Act directs the DOE to
grant export authorizations unless it finds that the proposed
exports "will not be consistent with the public
interest." While "public interest" is not defined by
statute, the DOE has identified a range of factors that it
evaluates when reviewing an application for export authorization,
including economic impacts, international impacts, security of
natural gas supply, and environmental impacts.
The Jordan Cove project includes plans to construct a
liquefaction terminal, a 230-mile feeder pipeline and a natural
gas-fired power plant to serve the liquefaction operation. The
project will cost $7.5 billion in total, create thousands of
construction jobs and 150 permanent positions, according to
backers. Pursuant to the DOE's conditional order, the facility
is conditionally authorized to export at a rate of up to 0.8
billion standard cubic feet per day of LNG for a period of 20
years. Jordan Cove plans to export the LNG on its own behalf or as
an agent for other entities holding title to LNG. The company will
execute Liquefaction Tolling Agreements, under which an individual
customer that holds title to natural gas will have the right to
deliver that gas to Jordan Cove's Terminal for liquefaction
services and to receive LNG in exchange for a processing fee paid
to Jordan Cove.
Jordan Cove is the seventh application, of more than 20, to
receive the DOE's conditional approval. So far only one
project–Sabine Liquefaction, LLC, in Sabine Pass,
Louisiana—has final federal approval to export natural gas
and it is expected to begin doing so in late 2015. Before Jordan
Cove and the other five projects that have won conditional approval
can be built, they must get final clearance from the Federal Energy
Regulatory Commission (as well as other federal and state
Most of the previous approvals have been on the Gulf Coast in
southeastern Texas and Louisiana, but the new approval for the
Jordan Cove Energy Project LP in Oregon would mean exporting LNG to
Asia and beyond from the Pacific Northwest. In its press release Monday, Veresen announced that
"Jordan Cove's advantageous location leverages existing
North American pipeline infrastructure and will provide access to
substantial markets for both Canadian and United States Rockies
natural gas producers." Non-FTA markets include countries
throughout Asia and South America. Among significant LNG importing
countries, only South Korea, Singapore and Chile have FTA status
with the United States.
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BP Global Oil Americas recently published the 2015 edition of its General Terms & Conditions for Purchases and Sales of Crude Oil, Refined Petroleum and Related Products, which are governed by New York law. The previous BP GTCs were published in 2008.