Nova Sco tia LNG pro ject takes a big step for ward
De spite receiving regulatory approv als from the U. S. on Monday, a liquefied natural gas ex port project pro posed for the Nova Sco tia coast is still a long way from be ing built.
Hali fax- based Bear Head LNG Corp. an nounced Mon day that the U. S. Department of Energy had author ized the com pany to export up to 440 bil lion cubic feet per year of American- sourced nat ural gas into Canada before converting that gas into its li que fied form for ex port to coun tries that have signed free trade agree ments with the U. S.
The ap prov als are a “very signifi cant” step for ward for the pro posed LNG ex port fa cil ity on Cape Bre ton, project director John Godbold said in an inter view.
Godbold con firmed that Bear Head, owned by Perth, Australiabased Liquefied Natural Gas Ltd., expects to make a final investment decision on the project, which would chill natural gas to its liquid state for export, in 2016.
However, he said it was unlikely the company would come to a final decision on the project before Bear Head receives additional regulatory approvals.
The com pany is still seek ing approv als from the Na tion al Energy Board, Canada’s na tion al en ergy regu la tor, to im port gas from the U. S. and then ex port that gas from Canada be gin ning in 2019.
As a result of com pli cat ed pipeline routes, the pro ject’s pro ponents are also seek ing ap prov als to ship Can ad ian- sourced nat ural gas through the U. S. and then back into Canada be fore ex porting that gas off the coast of Nova Scotia.
Final ly, the pro ject needs approv als to ex port American-sourced natural gas to countries that have not signed free trade agree ments with Wash ing ton.
“We, most like ly, would not go to final in vest ment de ci sion until we had all three ( ap prov als), just because the project financing and the financiers related to the pro ject real ly ne ces si tate hav ing all three in place,” Godbold said.
The rise in production from shale gas plays, as a result of the wide spread use of hori zon tal drilling and multi- stage hydraulic fracturing, has resulted in a glut of natural gas in North America, which has caused a drop in the com modity’s price across the con tin ent.
As a result, com pan ies like Bear Head aim to sell LNG to buy ers o ver seas, where nat ural gas prices are much high er.
Bear Head, which was initially designed as an im port ter min al, is one of four LNG ex port pro jects pro posed for con struc tion in Atlan tic Canada. Two other LNG export fa cili ties have been pro posed in Quebec.
The Canadian Association of Petroleum Producers released a report last week predicting that domestic natural gas production would eventually decline if Canadian production companies were unable to access customers in the global LNG market.
Godbold con firmed that Bear Head had not signed any cus tomers to offtake agree ments to date but added the global LNG market was big enough, that he expected to add customers after all regulatory approvals were in place.
“The critical piece is not an LNG sale, the critical piece is getting gas supplied to the facility,” Godbold said.
We, most like ly, would not go to final in vest ment de ci sion until we had all three ( ap prov als).