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Canadian LNG: One forward, one back
Petro-Canada has edged ahead of its rivals in the pursuit of Russian LNG for North America, but another Canadian project has been stalled by an inability to round up supplies.
Petro-Canada made another advance March 14 when it announced a deal with Russian gas giant Gazprom to work on an initial engineering design for a US$1.5 billion gas liquefaction facility with capacity of 500-700 million cubic feet per day near St Petersburg, Russia.
The two companies are committed to spend US$5 million at this stage and US$25 million for more detailed engineering.
If Petro-Canada and Gazprom move to a full-fledged partnership, it hopes to lock up gas supply for 20 years or more to support a C$500 million LNG regasification plant in Quebec in partnership with TransCanada.
The two facilities are targeted for completion by 2010.
Petro-Canada Chief Executive Officer Ron Brenneman told a conference call that Petro-Canada and Gazprom are talking about a 50-50 interest in the St. Petersburg plant, “but the ultimate partnership in both ends of this project are part of what needs to be determined between now and the end of the year when we finish the preliminary engineering work.”
He said his company would also like a stake in Russian gas production, although that would not be part of any Gazprom deal. Anadarko slows progress Meanwhile, Anadarko has slowed progress on its US$650 million regasification plant in Nova Scotia, giving a further boost to Irving Oil’s Canaport terminal in neighboring New Brunswick.
That facility, being developed in partnership with Spain’s Repsol, is due to come on stream in 2008 — the same year Bear Head was supposed to be completed.
An Anadarko spokeswoman said more time is needed to explore supply possibilities in regions such as Russia, the Middle East and Africa.
She said Anadarko remains committed to the project; it just needs more time to work on negotiating long-term supplies.
—Gary Park
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