03/22/2016 07:00 EDT | Updated 03/23/2017 01:12 EDT

Veresen lines up sales contract for proposed Jordan Cove LNG project

CALGARY — Veresen Inc. has breathed new life into its proposed Jordan Cove liquefied natural gas project after reaching a deal to sell about 25 per cent of its output to Japanese utilities.

The Calgary-based company says it has signed a preliminary agreement to sell at least 1.5 million tonnes per year of LNG from the project to JERA, a joint venture between Tokyo Electric Power Company and Chubu Electric Power Co.

The Jordan Cove project in on Oregon's coast at the port of Coos Bay has a proposed capacity of roughly six million tonnes per year.

The project hit a major roadblock on March 11 when the U.S. Federal Energy Regulatory Commission denied Veresen's application to build the LNG terminal and a pipeline from Canada to supply gas to the terminal.

FERC rejected the application in part because Veresen did not have sales contracts signed and so had not demonstrated a public benefit that would outweigh the potential for adverse impacts on landowners and communities.

Veresen said at the time that it would continue discussions with potential customers and request a rehearing of the regulatory decision.