Anadarko Petroleum rejects any talk of a race to open a liquefied natural gas terminal in Atlantic Canada, but it’s moving ahead with its own C$450 million project without waiting for regulatory approvals.
Less than two months after taking ownership of the Bear Head venture in Nova Scotia, the U.S. independent has started clearing the site, although several regulatory hurdles have yet to be cleared.
Robert Daniels, senior vice president, exploration and production, said Anadarko has decided to proceed before it has locked up a secure gas supply or obtained government approvals.
“We don’t think we’re in a race with anybody. We’re just in a race to get our plant delivered on time and on budget,” Daniels told a Canadian offshore exhibition in Halifax.
The project has received a go-ahead on its environmental assessment, seen by the company as a significant breakthrough given the tough opposition in the United States to LNG proposals.
But the Nova Scotia Labor Department must still issue an industrial permit for the construction plans, the Canadian Department of Transport must clear the project under the Navigable Waters Protection Act and the National Energy Board must approve the production of natural gas at the terminal — a first for the federal regulator since Canada currently has no LNG plants.
Exploring supply opportunities
While negotiating the regulatory maze, Anadarko is exploring gas supply opportunities in Algeria and Qatar, where it has exploration rights and is now negotiating rights to liquefaction capacity.
“Those are two obvious (sources), considering we have got relationships already,” Anadarko spokeswoman Nadine Barer, told the Halifax Chronicle-Herald a month ago.
She said Qatar Petroleum and Algeria’s state-run Sonatrach are “looking for something out of this particular project and we’re looking to spread our risk around. They will become a partner whatever percentage is negotiated.”
Also unresolved is a deal to connect the Bear Head plant with the Maritimes & Northeast Pipeline, which currently ships about 430 million cubic feet per day of gas from the Sable field offshore Nova Scotia to the U.S. Northeast.
Duke Energy Services, which has a majority interest in Maritimes & Northeast, said the pipeline will have to be expanded from its current capacity of 650 million cubic feet per day to handle the extra gas flow.
Irving Oil has green light to proceed
Since taking over Bear Head from privately held Access Northeast Energy, Anadarko has rapidly closed the gap on Canada’s Irving Oil, which has a green light to proceed with its Canport project in New Brunswick in partnership with Spain’s Repsol.
The C$750 million Canport venture is scheduled to start operations in 2007, the same year Bear Head is targeting a start-up.
Irving’s progress gained momentum in late September when it teamed up with Repsol, Europe’s fifth-largest energy group.
Repsol, in turn, added value earlier this month by announcing it was joining Royal Dutch/Shell in a US$4 billion LNG project in Iran.
“All of us will be looking at what happens with other (LNG) plants as we move forward, but we think the market will dictate how many plants are needed,” said Daniels.
He said Anadarko’s own assessment suggest that Bear Head will be needed to satisfy the North American market.
