Underground Construction - January 2018 - 21

state agency had issued a similar
permit for the project. This project
and the Constitution Pipeline are
involved in cases in the U.S. Court
of Appeals for the 2nd Circuit.
Citing recent responses from
industry players, Hong said they
are seeking assistance from the U.S.
Army Corps of Engineers, "looking
at ways to change the Clean Water
Act. Either way, there is a lot more
that is needed to be fleshed out,
and how the court and FERC act going forward will determine how fast
these projects can be completed."
Regarding marketing/financing hurdles, Hong cited the
long-standing Jordan Cove LNG
export project and 232-mile Pacific
Connector transmission pipeline
as examples of this obstacle to
build. After being denied an FERC
permit in 2016, at least partially
because of a perceived lack of market support for the project and/

or its connecting transmission
pipeline from the Oregon-California-Nevada border to the coast,
sponsors have a new application in
play at the start of 2018.

LNG
Having acquired Jordan Cove's
original sponsor, Calgary, Alberta-based Veresen Inc., Pembina
Pipeline Corp. in late 2017 became
the project backer, strengthening the financing picture as a
result. "Several LNG projects in
Texas have been delayed by final
investment decisions for what I
can assume are questions around
global demand," Hong said. "We
have seen this in other industries
as well, especially with respect to
export markets. Projects typically
need capacity commitments in
order to convince financiers that
a project is viable. It also seems to
play a role in the approval process

with federal and state regulators."
Hong said it should be interesting to see how state regulators
react to some of these projects if
FERC approves them. Regardless,
for the Texas Gulf region nothing
seems to be in place that will hold
back its continued growth as a
strong U.S. energy demand center.
"The Texas Gulf Coast is a
strong demand center, and given
where we are in terms of LNG exports and exports to Mexico, moving the Permian gas to the Gulf is a
logical step for producers to monetize the gas," said B&V's Yeung,
who thinks at least three new pipeline proposals will have a "sizable
impact" on future markets, aside
from several new liquids pipeline
projects to the Gulf.
Whether at FERC or in Texas,
projects are going to take longer
and cost more, but industry analysts like Yeung see them eventual-

ly succeeding.
The paths to success will be
bumpy from both an adversarial point of view and an economic
focus. Satisfying seemingly never-ending environmental concerns
and finding the right counterparties to make projects financially
viable will continue to be difficult.
The end of 2017 marked a global
glut of oil and natural gas, which
could impact the next generation
of U.S. infrastructure projects in
the early 2020s.
A key factor, experts say, is
to demonstrate that a project is
needed, and that it has significant
benefits to the community, with
no significant environmental impacts that can't be mitigated. The
pipeline industry now understands
that increased public scrutiny is
going to continue.
Richard Nemec can be reached at:
rnemec@ca.rr.com.

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Underground Construction - January 2018

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