MOSCOW (Pakistan Point News / Sputnik - 07th July, 2020) Differences between US President Donald Trump's administration and local authorities in the state of Oregon might delay the implementation of the project on exports of liquefied natural gas (LNG) from the country's West Coast, Deputy General Director at the Russian National Energy Security Fund Alexey Grivach told Sputnik on Tuesday.
On Monday, the Trump administration formally greenlighted the first export of LNG from the US West Coast by issuing an export authorization for the Jordan Cove project. Under the approval, the energy project, owned by Canada's Pembina Pipeline Corporation, will have the authority to export up to 1.08 billion cubic feet per day of natural gas as LNG. Nevertheless, Oregon officials, including Democratic Governor Kate Brown, argue that the state's approval is needed before the project can move forward.
"At the moment, there is a battle, as well as litigation, between the federal government and the state of Oregon over the construction of the Jordan Cove LNG terminal and the 337-kilometer [209 miles] gas pipeline to connect it to the gas transportation system," Grivach said, adding that Oregon's opposition might delay the project or have a negative impact on its implementation.
According to the expert, Trump is "extremely interested" in the development of the LNG industry "in the context of a trade deal with China," and for several other reasons, including his electoral campaign, the promise of new jobs and increasing the US' presence on the energy market.
"Regional authorities, on the contrary, are fighting against the project, they challenge the issuance of the main building permit by the Federal Energy Regulatory Commission (FERC) received by the project initiators this spring after waiting for it for 10 years," Grivach said, adding that the project's export authorization is "not the only factor for its successful implementation."
The expert added that Pembina is also not satisfied with FERC's decision, as the commission did not fully accept the project's application, and is challenging it in court.
"It is very doubtful that under such conditions a project worth about $10 billion can be quickly and efficiently implemented," the expert said.
The export authorization received by Jordan Cove gives the project a right to export LNG to countries that do not have a free trade agreement with the US. At the same time, the terminal and a planned 229-mile gas pipeline have not yet been constructed, the expert said, adding that the US has only five LNG terminals at the moment.
Grivach also pointed out another issue with the project � the LNG market at the moment is in bad shape and is not investment-friendly.
"Gas prices in the US are only slightly lower than [gas] spot prices not only in Europe but also in Asia. Negotiating new long-term LNG supply contracts is extremely difficult, and without them, banks will not provide the necessary funding. At the same time, financial opportunities are far from the capabilities of the largest corporations that can organize financing by reallocating funds within the group," the expert said.
In conclusion, Grivach pointed out that the US project does indeed have some logistical advantages for access to Asian markets, but its position is weak, as access to resource bases and other markets, including Europe, is challenging.
