NorthernStar files for liquidation bankruptcy

2010-05-05T22:30:00Z 2011-02-09T16:31:43Z NorthernStar files for liquidation bankruptcyBy Tony Lystra / The Daily News Longview Daily News
May 05, 2010 10:30 pm  • 

NorthernStar Natural Gas, the Houston company that halted its plans to build a $650 million liquefied natural gas terminal on the Columbia River earlier this week, has filed for bankruptcy, according to court documents.

The Chapter 7 bankruptcy filing means the company will probably be liquidated, which means the Bradwood Landing terminal most likely won't be built.

"It's truly dead at this point," said Dan Serres, an activist with the environmental group Columbia Riverkeeper, the terminal's most vocal opponent.

Serres called the company's bankruptcy the end of a "five-year fiasco" and "a shot across the bow of the LNG industry."

NorthernStar did not respond to inquiries on Wednesday.

The company had planned to bring superchilled liquid gas 38 miles up the Columbia River by tanker and store it in two 11-story-tall tanks. The reheated gas would have been sent to market in a new pipeline crossing the Columbia River and connecting with the Williams pipeline north of Kelso.

Since 2005, the company has spent tens of millions of dollars on consultants, lawyers, lobbyists and regulatory filings in an attempt to overcome a vast array of environmental hurdles and win the public's support.

The terminal's detractors described it as an environmental and safety hazard that threatened to hold up shipping traffic, ruin salmon habitat and undermine tourism in nearby Astoria. Some Cowlitz County landowners fought the project, saying they would unfairly lose portions of their land to accommodate NorthernStar's pipeline.

The terminal's backers said it would lower natural gas prices, boost the economy and provide millions of dollars in tax revenues to local communities.

On Wednesday, Clatskanie Mayor Diane Pohl called NorthernStar's collapse "a shame" and "a huge loss."

The terminal, she said, would have brought family wage jobs to the area, and some of the workers, no doubt, would have lived in Clatskanie, pumping dollars into the little town's economy.

"Hysteria and a lot of misinformation went around, and Bradwood hung around as long as they could," Pohl said. "It reflects on Oregon and the brutality of getting industry sited in this state. It's very difficult. It takes years, not months."

After years of heated-rhetoric and battles over government permits, the fight appeared to come to a close Tuesday as NorthernStar announced it "suspended" its efforts to build the terminal because it could not attract investors and didn't know if it would get government approval to build the facility.

It was revealed Wednesday that, as NorthernStar was announcing its decision to halt development at Bradwood, the company filed for bankruptcy in United States Bankruptcy Court in Houston.

In bankruptcy documents, NorthernStar listed more than $21 million in liabilities, including more than $4 million owed to creditors. The company said it had $267,589 in assets.

Among NorthernStar's debts is nearly $186,500 owed to Clatsop County, according to the documents. The company also listed tens of thousands of dollars owed to lobbyists, consultants and communications firms.

The documents showed that NorthernStar paid more than $1.5 million to similar businesses this year. Among them was more than $76,000 to Energy Action Northwest, a pro-industry group that advocated loudly for the Bradwood terminal's construction.

NorthernStar said its assets had been pledged to Palomar Gas Transmission Inc., a joint venture between Northwest Natural Gas Co. and TransCanada Corp. to build a new natural gas pipeline that would have carried a portion of the gas imported to the Bradwood terminal across Oregon.

Northwest Natural spokeswoman Kim Heiting said NorthernStar paid nearly $16 million in project costs related to the Palomar pipeline. Now, she said, the Palomar line's western stretch, which would have reached from Mollala, Ore., to the Bradwood terminal, most likely won't be built.

"If there isn't a terminal, we wouldn't extend Palomar to serve it," Heiting said.

She said her company still plans to build the eastern stretch of the Palomar line, which would reach from Madras, Ore., to Mollala.

Heiting said a Northwest Natural project manager learned of NorthernStar's impending collapse Tuesday. The company noted NorthernStar's bankruptcy filing in its quarterly report to investors Wednesday, but Heiting said it would have "no impact on Northwest Natural."

Cameron Horowitz, an analyst at SunTrust Robinson Humphrey, told the Associated Press that increased domestic supplies of natural gas have slashed prices, killing the demand for LNG imports. Two other companies trying to develop LNG facilities in Oregon would face "slim" prospects of success, he said.

"Every year for the past five years, there's been talk that this country would be flooded with LNG imports, but it has never come to fruition," he said from Houston. "Given the outlook for U.S. natural gas prices and the rest of the world, I don't see it coming to fruition at all over the next five years."

Horowitz said LNG facilities on the Gulf of Mexico have been trying to win permission to ship LNG stockpiles back overseas.

Copyright 2015 Longview Daily News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(33) Comments

  1. gimpy
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    gimpy - May 05, 2010 4:36 pm
    How 'bout that? They were partners in the Palomar line. We opponents of this project have been saying that for years, and both companies denied it, right till the bitter end. Every NW Natural shareholder ought to be up in arms about the irresponsible way the company has been investing in LNG. I plan to attend the annual meeting on May 27th and make my voice heard on this issue.
  2. just a reader
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    just a reader - May 05, 2010 6:22 pm
    That clinking you hear is the sound of lots of celebratory toasts being made. It is sad that so much money was wasted in the process, but at least they are gone.
  3. Trapper
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    Trapper - May 05, 2010 6:26 pm
    And this surprises people? Let's see, 2 men + $1000 form a new corporation in Delaware and immediately file to do business in Oregon. Main non-money partner - NW Natural. New corporation does not have enough private equity so seeks assistance from venture capitalist MattlinPatterson in form of $100 million loan due, in full, May, 2010. There never was the big corporation NorthernStar sold themselves to be. I've always said "follow the money".
  4. Simon Sez
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    Simon Sez - May 05, 2010 7:38 pm
    Good news. I am surprised however, not as many people have voiced their delight in this. Wasn't there a group trying to halt this? I hope they have a huge celebration.
  5. Trapper
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    Trapper - May 05, 2010 9:12 pm
    One more item attesting to financial viability, and I quote: "NorthernStar's bankruptcy filing listed assets of $165,930 and liabilities of about $129.5 million."JEFF BARNARD (AP) Another sign of how this company was too underfunded to front this project. Remember, they were only looking for financial backers for the development stage. They had NO backing for construction. And before people celebrate too hard and long, also remember, NorthernStar can still sell the permit to the highest bidder.
  6. grams
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    grams - May 05, 2010 10:17 pm
    I am sure we have not yet heard the end of this story. I wonder what other financial wreakage NorthernStar will leave behind. Congrats to our Cowlitz County Comissioners for sticking to their guns and making them pay up front. Interesting that Joe Desmond is named as a spokesman here but was fired last month. Well, Joe thats California, Idaho and now Oregon and Washington down. Perhaps you better choose a different line of work.
  7. pitfall
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    pitfall - May 06, 2010 5:15 am
    Wow good thing we moved out of Washington. No wonder the med. salary in Cowlitz county in 50% of Clark. Idiots can figure out why??? No jobs. Well maybe the people that opposed this will set up a factory and put all the people that are not working to work.

    I am sure one of these people that opposed it have the ability to come up with 100 million in backing to put something together to put those locals to work. What good people they are looking out for the future of the community.
  8. AtlasShrugged
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    AtlasShrugged - May 06, 2010 7:16 am
    It's pretty short-sighted that one of the cleanest forms of energy in one of the safest modes of transportation would get the treatment that the LNG project did. All the blather about their financing and company ties means nothing. I can only hope that Astoria holds on long enough for the artists and enviros, who do NOTHING to support the economic viability of the region, to get frozen out of their riverfront homes and condos and migrate back to Portland.
  9. Sanity Has Returned
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    Sanity Has Returned - May 06, 2010 7:31 am
    Who needs stinking good jobs, we'll get Walmart to come in here to build us not just another Walmart, but a Super Duper Walmart. Now them thar are some good family wage jobs. And maybe if the city council is feeling charitable, they'll throw in another payless shoe source and a McDonalds.
  10. Simon Sez
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    Simon Sez - May 06, 2010 7:41 am
    About 70 full time jobs. I somehow don't think that would put a large enough dent in this areas un-employment rate to justify the risks involved.
  11. corky72
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    corky72 - May 06, 2010 7:42 am
    The folks who made the empty promises of millions for salmon habitat, law enforcement enhancement and taxes are now running away from their substantial bills via chapter 7 bankruptcy. Can anyone really be surprised? Not me. I am just happy to see Northern Star make an exit from my community.
  12. gimpy
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    gimpy - May 06, 2010 8:12 am
    Fabulous headline on the print edition! "It's Over"! Yay, about time. Simon Sez, our group is meeting Tues. to decide on the format of our LAST public meeting. Trapper is right about the money. This was never more than a house built of cards and they are all collapsing now. There are interesting times ahead; the lawsuit against FERC is still in the 9th Circuit, Oregon LUBA remanded our victory to Clatsop County. The permit could be sold if there is a buyer with more money than brains out there!
  13. Longview 88
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    Longview 88 - May 06, 2010 8:39 am
    I think it could have been a boost to the region's economy.But with that aside, I am getting leery of companies intending to bring jobs to this area, then their plans fall apart. So far, Cameron Glass, the closed lumber plant at Mint Farm, the ethanol plant that was proposed for Mint Farm. The mill jobs are not as plentiful as they once were and we need something to diversify our economy. Unfortunately, we also have a lot of NIMBY whiners who tend to oppose anything that could bring decent jobs
  14. FDR
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    FDR - May 06, 2010 8:52 am
    Simon Sez said: "About 70 full time jobs. I somehow don't think that would put a large enough dent in this areas un-employment rate to justify the risks involved. "

    Note that the 70 jobs is a figure that had been revised upwards about three times as Northern Star tried to win support for the project; their initial estimation was for about fifteen to twenty full time jobs once the terminal was built. Yet everyone just took them for their word.
  15. Happy Camper
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    Happy Camper - May 06, 2010 9:10 am
    At some point in time perhaps those that oppose these types of projects will take an honest look at them and realize that liquid natural gas is a legitimate alternative to oil and gasoline to power our vehicles. There must be infrastructure to make it all work though. Will the environmentalists work to allow us to take the first step in the right direction? I really doubt it.
  16. grams
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    grams - May 06, 2010 9:29 am
    Atlas Shrugged....John Gualt you are not! Keep up with the times. There will soon be much pipeline construction bringing that cleanest form of fossil fuel to this area from the Wyoming shale deposits via Ruby pipeline and Williams Blue Bridge pipeline. Can you spell domestic? Can you understand no 700,000cubic yards of river bottem removed from a vital portion of the lower Columbia Estuary in Clifton Channel? Can you understand secure passage for our international shipping for our ports?
  17. cheney119
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    cheney119 - May 06, 2010 10:00 am
    This reminds of the BP disaster in the Gulf. They could have made that rig much safer, but it cost too much and now we are going to have an environmental dead sea on the Gulf Coast. Can anyone say that there wouldn't be shortcuts taken here too. NorthStar was nothing but empty broken promises. You can always tell when a Texan/Republican is lieing, you can spot it right away, it's when their lips are moving.
  18. jesse1
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    jesse1 - May 06, 2010 10:03 am
    I bet Weyerhaeuser is next but the good thing is i beleave simpson or rsh will step in and buy them
  19. boo275
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    boo275 - May 06, 2010 10:33 am
    Cheney119 - just curious, how could they have made the oil rig "much safer"?
  20. DavidArthur
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    DavidArthur - May 06, 2010 11:32 am
    Maybe the North Stars shouldn't have moved to Dallas from Minnesota. Much better market in the north for that kind of thing. I knew it would never last in Dallas.
  21. cheney119
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    cheney119 - May 06, 2010 12:01 pm
    http://www.huffingtonpost.com/2010/05/06/feds-let-bp-avoid-filing-_n_566224.html This article describes how they didn't even have a blow out plan. The lack of the device, called an acoustic switch, these switchs are required in Brazil and Finland and BP uses them voluntarily in the UK, this could have stopped the leak before it started, but not on ours. I suspect you don't want to know how, or you'd just look it up yourself, you want to listen to Rush make up you lies instead.
  22. pearharbor
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    pearharbor - May 06, 2010 1:18 pm
    just anoth event pushing this country closer to that end game scnerio where we the people will have to fight for what we want god bless America
  23. pangborn
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    pangborn - May 06, 2010 1:46 pm
    I have felt all along that the thing would not be built. I smelled boondogle. Those people did not intemd to build but to take the money and run.
  24. country gal
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    country gal - May 06, 2010 1:47 pm
    longview 88: To a certain degree I agree with you although I'm not for LNG strictly because of the natural balance in our environment. I feel when you invest in a company built from scratch on up, you're going to make it. Investing $$$$$$ into an all ready corporation, chances are you'll go bankrupt. The fees/taxes/expenses that the state requires you to pay is ridiculous! Until we get rid of those, will we be able to keep our heads above water plus create a lot of competitive businesses.
  25. pangborn
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    pangborn - May 06, 2010 5:22 pm
    pear harbor.... Huh? The end game here is the capitalist thieves won't be stealing natural resources. They got what they deserved.
  26. Simon Sez
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    Simon Sez - May 06, 2010 6:19 pm
    jesse1, what does Weyco have to do with this? And who is supposed to buy whom?
  27. redhead
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    redhead - May 06, 2010 9:07 pm
    I have asked this question numerous times but never get an answer. For all of you that were in favor of this project, would you still be in favor of it if someone came to your door and wanted to take your land and run a high pressure pipeline through it? I doubt it very much. Northern Star came in with all these promises but left bankrupt with only $200,000 in assests. BYE-BYE JOE!
  28. Trapper
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    Trapper - May 06, 2010 9:43 pm
    Longview88 - name calling always solves problems. To you I'm one of those "NIMBY whiners." By definition, I've never taken home a "family wage paycheck" and I've given up my paycheck altogether for several months now in order to keep my business doors open my employees working. My wife and I don't own fancy cars or have any "toys". We put our heart and soul into our property and home and you think we should turn it all over for "promise" of a handful of jobs? Find someone else to blame.
  29. grams
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    grams - May 07, 2010 8:39 am
    Trapper, you are so right... promises, promises. And then there is the old saying, "if it sounds too good to be true, it probably is" I still can't believe that a number of pacific northwesterners bought into that TEXAS tripe and ridiculed those who saw the light, realized the the emperor was stark naked and stepped up to the line and said "you want to do what, where, and for how long?" But then there will always be those among us who will believe anything if it promises enough. Shissssh
  30. pitfall
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    pitfall - May 08, 2010 10:08 am
    Yes I have heard the rumors about the big W selling out also. Last year and first quarter they were saved by liquidation of assets. Timber land tracts at the auction last week they let 10 acts go for less than 50k. Has to be the cheapest 10 acres sold in the county in the last 20 years. Sad ending to a good company
  31. grams
    Report Abuse
    grams - May 12, 2010 7:47 am
    earlier on here I wondered just what other wreackage NorthernStar would leave behind. Well, we are fast becoming aware of some of that. Thousands of dollars owed to the county which in part defended their effort to bring LNG here.
    Even their local Rotery Club. Now they are trying to blame it all on state agency proceedure. The state could only move as fast as the relavent information provided them and it was not. NS thought they could bluff their way through. HAH
  32. Hauskapoika
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    Hauskapoika - May 12, 2010 12:28 pm
    The LNG terminal was not a political thing, and an LNG terminal operation is far different than the offshore platforms in the gulf of Mexico. I do not know enough of the details to favor or disfavor LNG on the Columbia, and I would venture to say 99% of local people don't know enough either.
    Why is this different than other existing LNG terminals in the USA? It is easy to say "environmentally bad", but what does that mean? We need facts,pro and con, instead of rhetoric.
  33. grams
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    grams - May 13, 2010 9:56 pm
    Hauskapoika.... Abvously you have not followed this event over time. DEQ has stated that there has been no good proof that the construction would not cause harm to the fish species in the Columbia river and/or at the Clifton Channel location. That is almost like the word of god when it comes to environmental harm. NorthernStar was given many extentions to try to provide the written plan that would prove acceptable. They did not. Better safe than sorry huh?
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