Nova Scotia LNG project plans teetering

One of the most advanced hopes for Canada’s first liquefied natural gas terminal is starting to wobble as Anadarko Petroleum faces a decision on whether to continue pouring money into its Bear Head project in Nova Scotia.

Jim Hackett, Anadarko’s chairman, president and chief executive officer, promised analysts in a Feb. 6 conference call that “something definitive” will occur this quarter.

He said “we’re not going to let this drag on forever,” referring to Anadarko’s inability so far to arrange supply agreements, having already invested US$80 million on the terminal.

That came only three months after Hackett told Reuters he was confident Bear Head — planned to open by late 2008 — would start receiving imported LNG ahead of its rival Canaport project, planned for New Brunswick by a partnership of privately held Irving Oil and Spain’s Repsol.

Company hunting for supply

Bear Head has designed throughput capacity of 1 billion cubic feet per day for Eastern Canada and New England.

Further storage tanks could be added later to add another 500 million cubic feet per day of send-out volumes.

The terminal has the advantage of close proximity to gas transmission infrastructure and has signed agreements for nominated capacity on a planned expansion of the Maritimes & Northeast Pipeline system that currently ships about 400 million cubic feet per day of gas from Nova Scotia’s offshore Sable field.

When that pact was concluded last April, Anadarko senior marketing Vice President Karl Kurz said the deal was a “critical step” in giving Bear Head added visibility while Anadarko moved forward with LNG supply negotiations.

In the final quarter of 2005, LNG tank foundations were excavated, formed and poured and final preparations continued for other areas of the site, while Anadarko said it expected to announce the successful bidder for the engineering, procurement and construction contract this quarter.

—Gary Park