$5B fa­cil­ity

In­ter­est in Rich­mond County LNG fa­cil­ity up, af­ter in­vestors pull out of B.C.

Cape Breton Post - - Front Page - BY BRETT BUNDALE

In­ter­est ris­ing in planned Cape Bre­ton LNG fa­cil­ity.

A Nova Sco­tia com­pany look­ing to build a liq­ue­fied nat­u­ral gas ter­mi­nal on Canada’s East Coast says it’s see­ing an uptick in in­ter­est since an LNG megapro­ject slated for the West Coast was scrapped last week.

Paul MacLean with Bear Head LNG Corp., a sub­sidiary of Aus­tralia-based Liq­ue­fied Nat­u­ral Gas Ltd., says af­ter more than a year of woo­ing west­ern Cana­dian shale gas pro­duc­ers, the Nova Sco­tia pro­ject is get­ting at­ten­tion.

“We’ve been work­ing with west­ern basin pro­duc­ers over the last year-and-a-half pre­sent­ing Bear Head as a com­pli­men­tary op­tion to what was pro­posed for the B.C. LNG pro­ject,’’ MacLean, strate­gic and reg­u­la­tory af­fairs ad­viser, said in an in­ter­view. “It was sort of a plan B.’’

But with Petronas and its part­ners pulling out of the $36-bil­lion Pa­cific North­West LNG pro­ject planned for Bri­tish Columbia, Bear Head is hop­ing to be­come the top choice for pro­duc­ers look­ing to get land­locked nat­u­ral gas to mar­kets.

“We’re not re­ally rel­ish­ing the fact that Petronas has de­cided to with­draw their pro­ject by any means, but we are ex­pe­ri­enc­ing an in­crease in in­ter­est as a con­se­quence of that de­ci­sion for sure,’’ MacLean said.

In a fiercely com­pet­i­tive en­ergy mar­ket grap­pling with a global over­sup­ply of nat­u­ral gas and a pro­longed pe­riod of de­pressed prices, the can­cel­la­tion of the West Coast megapro­ject ap­pears to give the East Coast ter­mi­nal an edge.

The pro­posed $5-bil­lion LNG ex­port fa­cil­ity in Cape Bre­ton’s Rich­mond County al­ready has con­struc­tion and en­vi­ron­men­tal per­mits as well as fed­eral ap­proval for a li­cence to ex­port LNG and im­port nat­u­ral gas from the United States.

“We’re the only fully per­mit­ted LNG pro­ject in At­lantic Canada,’’ MacLean said, not­ing the con­struc­tion phase would re­quire 1,500 work­ers while the ter­mi­nal would cre­ate 150 per­ma­nent jobs. “We’re shov­el­ready.’’

Bear Head’s sis­ter com­pany, Bear Paw Pipe­line Corp., also has ap­proval to build a 62.5-kilo­me­tre pipe­line that would run be­tween Gold­boro, N.S., to the ex­port fa­cil­ity planned for Point Tup­per. The $235-mil­lion pipe­line would con­nect to the Mar­itimes and North­east Pipe­line, which runs from Gold­boro to Mas­sachusetts.

The com­pany’s am­bi­tious pro­posal would see pro­duc­ers in Al­berta ship nat­u­ral gas through Tran­sCanada Corp. pipe­line to North Bay, Ont., which MacLean said is cur­rently un­der­uti­lized and has suf­fi­cient ca­pac­ity. From there, Bear Head would build a new pipe­line to Gold­boro.

Build­ing the so-called green­field pipe­line from On­tario to Nova Sco­tia would re­quire deals from pro­duc­ers up front, some­thing MacLean said he’s op­ti­mistic Bear Head can ob­tain within the next year or so.

The com­pany plans to get pipe laid and the ter­mi­nal up and run­ning by 2022 or 2023.

While west­ern Cana­dian pro­duc­ers would be able to

de­liver nat­u­ral gas to do­mes­tic mar­kets from Al­berta to Nova Sco­tia along the way, the fi­nal des­ti­na­tion would be over­seas.

“Nova Sco­tia ge­o­graph­i­cally is po­si­tioned ex­tremely well for ac­cess­ing global mar­kets,’’ MacLean said.

The nat­u­ral gas, shipped through pipe­line in a gaseous state, would be liq­ue­fied at the Point Tup­per ter­mi­nal, loaded onto tankers and ex­ported to north­west­ern Europe or other in­ter­na­tional mar­kets, he said.

Yet Toronto-based in­de­pen­dent en­ergy con­sul­tant Tom Adams, a self-pro­fessed watcher of At­lantic Canada’s “en­ergy ad­ven­tures,’’ called the pro­posed Nova Sco­tia fa­cil­ity “silly talk.’’

“I’m a long-time skep­tic of all the At­lantic Canada LNG pro­pos­als,’’ he said. “But this is the long­est of the long shots.’’

While Adams called the planned Bear Head pro­ject a “the­o­ret­i­cal pos­si­bil­ity,’’ he said it’s not prac­ti­cal.

He said west­ern Cana­dian pro­duc­ers would be bet­ter off ship­ping nat­u­ral gas south of the bor­der, to the Sabine Pass LNG Ter­mi­nal on the bor­der be­tween Texas and Louisiana, for ex­am­ple.

Adams said if the mar­ket is not at­trac­tive enough to get Bri­tish Columbia — po­si­tioned close to en­ergy-hun­gry Asian mar­kets — into the LNG busi­ness, then “Nova Sco­tia is just not even worth talk­ing about.’’

Liq­ue­fied Nat­u­ral Gas Ltd. bought the site in Point Tup­per from Anadarko Pe­tro­leum Corp. in an $11 mil­lion deal that closed in Au­gust 2014.

“We’re not re­ally rel­ish­ing the fact that Petronas has de­cided to with­draw their pro­ject by any means, but we are ex­pe­ri­enc­ing an in­crease in in­ter­est as a con­se­quence of that de­ci­sion for sure.”

Paul MacLean, Bear Head LNG Corp.

SUB­MIT­TED PHOTO

A con­cep­tual draw­ing of the pro­posed LNG plant in Bear Head, Rich­mond County.

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