- Shares advance as much as 15%, most since October 2008
- Analysts expect company to resubmit project application
Veresen Inc. jumped the most since 2008 after the Canadian pipeline and power plant operator secured a long-term sales contract for its proposed LNG export terminal in Oregon that was rejected by U.S. regulators earlier this month.
The Calgary-based company rose 8 percent to C$9.34 at 12:08 p.m. in Toronto, after earlier gaining as much as 15 percent.
The deal announced Tuesday with Japan’s Jera Co., a joint venture of Tokyo Electric Power Co. and Chubu Electric Power Co., is for the purchase of at least 1.5 million tons a year of natural gas liquefaction capacity at the planned Jordan Cove facility for an initial term of 20 years. Veresen is negotiating with other parties for the plant’s remaining capacity, according to a statement.
Veresen slid the most in more than four years after the Federal Energy Regulatory Commission rejected the $5.3 billion project earlier in March. That decision came as LNG export projects were already facing headwinds from an emerging global supply glut that’s depressing prices amid slowing demand from consuming nations in Asia.
“We expect the company to file for a re-hearing with FERC now that commercial support has been demonstrated," Robert Catellier, an analyst at CIBC World Markets Inc., said in a note to clients Tuesday. “We continue to see significant permitting risk and uncertainty around project timing.”
The company expects to file for a re-hearing by the April 11 deadline, Dorreen Miller, a spokeswoman for Veresen, said by telephone.