Oil prices raise questions about Coos Bay LNG plant - News - MailTribune.com - Medford, OR

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2015-02-08

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1 of 3 Premium Clicks used this month SUBSCRIBE Print + Online Subscriber Activation  |  Register x Forgot Password | Need an Account? e-edition | subscribe | newsletter | deals Home News Latest Stories Myrtle Creek man was murdered, police say Solar pavilion going up at Coyote Trails Mt. 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Ashland Ski Area set to open Saturday       ...           JORDAN COVE Oil prices raise questions about Coos Bay LNG plant Project backer says investors are looking at the long term Comment By The Associated Press MailTribune.com By The Associated Press Posted Feb. 4, 2015 @ 1:42 am Updated Feb 4, 2015 at 1:43 AM By The Associated Press Posted Feb. 4, 2015 @ 1:42 am Updated Feb 4, 2015 at 1:43 AM »  Social News COOS BAY — The collapse of crude oil prices and its ripple effect on natural gas exploration and production from North American shale deposits raise questions about the prospects for a liquefied natural gas export terminal at Coos Bay, but the Canadian company that proposes it says the long-term investment remains sound. A federal government estimate says domestic gas fields will produce enough to meet American needs and supply exports through 2040 and beyond, but skeptics say it's more likely that U.S. supplies from shale formations will peak in 2020 and then drop, the World newspaper of Coos Bay reports. "Does the U.S. have enough natural gas to even consider export?" Art Berman, a petroleum industry analyst told the World. "That's the most important consideration." The leader of Veresen Inc. of Calgary, Alberta, says he's confident about the investment of billions of dollars into the Jordan Cove project and its feeder pipeline, designed to ship superchilled, condensed gas to Asia. "I get asked a lot nowadays if the low crude prices will have an impact on our project," said President and CEO Don Althoff. "I don't believe it will. I believe our buyers take a long-term view of the marketplace. There's a four-year construction cycle and a 20-year contract. Buyers are thinking about 25 years out, really, when they think about pricing." Among the proposal's advantages, Althoff said, is a short route to Japan — nine days to Tokyo harbor — and supplies in Western fields that buyers won't see as so vulnerable to downturns in production as some farther east. The Jordan Cove project was initially conceived as an import terminal, before the domestic energy boom touched off by hydraulic fracturing and shale gas. In March 2011, Japan's Fukushima Daiichi nuclear disaster left that country short of energy supplies. Two years ago, Veresen applied for a federal permit to build an export terminal at Coos Bay. It hopes for the go-ahead from the Federal Energy Regulatory Commission later this year, followed by a slew of other permits after that. The estimates favorable to the Jordan Cove project come from the U.S. Energy Information Administration. A study at the Bureau of Economic Geology at the University of Texas says the federal estimate is a possible outcome. But the bureau and a report from the Post Carbon Institute suggest the nation's four major shale gas plays will peak in 2020, and then drop off. Those fields are Texas, the Southeast and the Appalachian region. Althoff said Jordan Cove's supplies are to come from smaller fields in Colorado and Canada that natural gas buyers don't see as a huge risk. By The Associated Press MailTribune.com By The Associated Press Posted Feb. 4, 2015 @ 1:42 am Updated Feb 4, 2015 at 1:43 AM » Comment or view comments   Reader Reaction »  STAY INFORMED   Email NewsLetter   Sign Up Today   Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. calendar Connect with MailTribune.com Facebook Twitter RSS Back to top Reader Services Reader Services Home Subscriptions Subscriber controls Contact us Submissions Photos Events Letters to the editor Corrections Announcements Obituaries Story ideas Since you asked Alerts Email Alerts RSS Feeds Text Alerts Advertise Media Kit Home Products and services Ad rates Advertising contacts Mail Tribune Daily Tidings The Nickel Shop Our Valley Blogs Stay Informed   Email newsletter   Sign Up Today   Sign up for our newsletter and have the top headlines from your community delivered right to your inbox. 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