The thinking that there is room for two liquefied natural gas plants in Atlantic Canada is being put to the test.
Anadarko Canada and the partnership of Irving Oil and Spain’s Repsol show no signs of wavering in their plans to bring import terminals on stream by late 2008.
Anadarko took another step forward June 30 when it signed a transportation agreement with Maritimes & Northeast Pipeline to deliver gas from its Bear Head project in Nova Scotia to markets in the United States and Canada. That gave it an edge over the Irving-Repsol project which has yet to conclude a contract for shipping gas from its Canaport facility in New Brunswick.
Karl Hurz, an Anadarko senior vice president, said the deal with Maritimes & Northeast is a “critical step” in the plans for an integrated LNG venture and gives Anadarko added “visibility” as it moves ahead with LNG supply negotiations.
The company has indicated it hopes to announce a supplier this summer or fall — with most speculation focused on surplus supply in Qatar, Russia or Algeria.
The US$650 million Bear Head project is expected to make initial shipments of 750 million cubic feet per day.
Possible expansion already announced
Maritimes & Northeast currently carries about 400 million cubic feet per day of gas from Nova Scotia’s Sable offshore field to New England.
It announced in April that it might expand the pipeline by 1.5 billion cubic feet per day following an overwhelming industry response to an open season. A spokesman said the Anadarko deal gives Maritimes & Northeast a basis to file an application with the National Energy Board later this year.
He said Maritimes & Northeast is in talks with other possible shippers that also indicated they wanted capacity on an expanded pipeline.
It is not known if Canaport is part of those negotiations.
However, design and engineering for the New Brunswick terminal is well advanced and construction could start this summer.
Repsol is responsible for arranging LNG supplies and will market the regasified LNG in the United States, while Irvin will control distribution in Canada.
Anadarko also announced June 30 that it has an agreement with Horton CBI, a subsidiary of Chicago Bridge and Iron of Houston, for engineering services and procurement of materials needed to build two LNG storage tanks.
In addition, there is a short list of bidders to participate in the engineering, procurement and construction contract for the terminal, which is expected to be awarded later this year.
