Regulators clear Quebec LNG plans

The Canadian and Quebec governments have approved plans for a liquefied natural gas terminal on the shores of the St. Lawrence River, improving the partners’ prospects of securing supplies from Russia.

A spokesman for Petro-Canada said that clearing the regulatory hurdles “sends a much clearer signal to potential suppliers” that the Gros Cacouna project is serious and will be around for the long term.

It has an agreement with Russian gas giant Gazprom to embark on the initial engineering design for a gas liquefaction plant near St. Petersburg, but has yet to negotiate a supply contract.

It is almost three years since Petro-Canada and TransCanada announced they would spend about C$660 million to build a regasification facility capable of processing 500 million cubic feet per day for markets in Eastern Canada and the United States.

The debate among analysts is whether the project will proceed without a contracted source of supply and what impact the approvals might have on other LNG projects in Eastern Canada.

A second Quebec LNG project known as Rabaska is awaiting a verdict by an environmental panel later in July. It is backed by Enbridge, Gaz de France and Gaz Metro.

Leading the pack at present is a joint venture by Irving Oil and Spain’s Repsol to build a plant in New Brunswick.

—Gary Park