Husky eyes Atlantic LNG

Husky Energy is adding some substance to the prospects of LNG exports from Canada’s Atlantic coast by disclosing that it is responding to interest from European buyers who are examining alternatives to their reliance on supplies from Russia.

Malcolm Maclean, Husky’s senior vice president for the Atlantic region, told the Financial Post that the company is “constantly looking at ways to monetize some of our gas discoveries” in Newfoundland’s offshore where Husky is one of the leading producers of crude.

He said Husky is weighing the possibility of conducting preliminary studies based on its appraisal of discoveries to date in a region where it produces only oil, while reinjecting the associated gas.

Maclean said Husky has its sights set on a world-class project to ship LNG to Europe and possibly as far off as Southeast Asia.

Unsettled by Russian President Vladimir Putin’s annexation of Crimea and uncertain about what other territories he might covet, European countries fear they could be cut off their supplies.

Four U.S. ambassadors in Europe have prodded the Obama administration to accelerate LNG export licenses for shipments from the U.S. Gulf Coast.

Maclean said the scramble for secure energy supplies was gathering pace even before the Ukraine crisis and Husky believes that interest could grow even more.

Husky has produced up to 45,000 barrels per day of oil in Atlantic Canada and has been involved with Norway’s Statoil in three new discoveries in Newfoundland’s Flemish Pass.

Maclean said a number of companies are considering investment in Atlantic Canada, but was unable to identify them for confidential reasons.

So far, three possible LNG projects are being mulled for Nova Scotia, led by Pieridae Energy Canada, which has conditional approval from the Nova Scotia government for a US$8.3 billion project to produce up to 10 million metric tons a year of LNG.

In New Brunswick, Spain’s Repsol, as 75 percent owner and Irving Oil as 25 percent partner, are keeping their options open to convert their existing Canaport terminal at Saint John, which imports 1.25 billion cubic feet per day of gas for re-export.

Also in the running to ship LNG from Nova Scotia is India’s privately held H-Energy, which has tentatively proposed a C$3 billion liquefaction plant, with initial capacity of 4.5 million metric tons per year.

It has regulatory approval from the New Brunswick Department of Environment and Canada’s National Energy Board to load vessels with LNG at the terminal, but has set no deadlines for a decision.

—Gary Park