NorthernStar Natural Gas filed for Chapter 7 bankruptcy following the announcement that company was halting work on the Bradwood Landing liquefied natural gas (LNG) terminal between Astoria and Clatskanie on the Columbia River in Oregon due to increased costs associated with state permit delays.

The company received federal approval for the estimated US$580 million project from the U.S. Federal Energy Regulatory Commission in 2004, but faced strong opposition from state regulatory offices and conservation groups due to the proposed location’s proximity to a salmon habitat. The continued delays and processing work cost NorthernStar US$100 million without any actual construction work being undertaken.

Bradwood Landing was to have a peak sendout capacity of 1.3 billion cubic feet with two storage tanks.

“The extended delays in the processing of state and federal permits for Bradwood Landing and the difficult investment environment have forced us to suspend development. In particular, the challenging regulatory environment gives investors pause, especially considering that Bradwood Landing would have such a positive impact on the Northwest’s economy and environment while supporting the region’s transition to renewable energy,” Paul Soanes, NorthernStar’s president said in a press release. Days after announcing this halt, the company filed for Chapter 7 bankruptcy protection.

While the continued battles in the state of Oregon helped to end the project for the foreseeable future, the project was also hurt by the current abundance of natural gas production from shale plays and the Rockies. While it was originally assumed that Rockies gas would be primarily moved east, this doesn’t appear to be the case due to lower demand levels combined with development of gas out of the Marcellus shale.

There are still two LNG terminal projects currently in the negotiating stage in the state: the Jordan Cove LNG terminal in Coos Bay and the Oregon LNG terminal in Warrenton. Jordan Cove received conditional FERC approval, but still has yet to receive state approval while the Oregon LNG terminal has yet to receive formal approval at either the federal or state level. Both projects face lengthy battles on the environmental front similar to those fought, and lost, by NorthernStar. – Frank Nieto