Atlantic Canada can “definitely” handle the two LNG plants that are in an advanced planning stage, provided the market is given a chance to adjust, according to a consultant with Purvin & Gertz.
Roland George told an industry audience in Halifax that there is room for both the Irving Oil/Repsol plant in New Brunswick and Anadarko’s facility on Nova Scotia, depending on how they are brought on stream.
Both have received the required permits, which gives them the advantage over other liquefied natural gas sites in Canada and the United States of being able to negotiate supply contracts.
Without being in a position to commit to supply they could run the risk of “some fairly stiff contractual penalties,” George said.
Anadarko has been working to line up supplies in Qatar, Russia or Algeria and is expected to strike a deal this summer, while Irving’s decision last fall to team up with Spain’s Repsol could open the door to supplies in Trinidad and Tobago, a current source of Repsol’s LNG shipments to the U.S.
Even more upbeat than George is Mayor Billy Joe MacLean of Port Hawkesbury, near the site of Anadarko’s planned US$650 million terminal.
He told the Halifax audience that Anadarko has spent close to C$80 million in the past eight months, including C$40 million worth of contracts and C$30 million on consulting fees.
MacLean also rated the Irving project as a “done deal.”
Asked to rate the chances of both ventures being completed he was “100 percent sure they will happen.”
Bear Head targeting 2007 completion
Anadarko’s Bear Head project is targeting completion by late 2007 when it plans to ship 750 million to 1 billion cubic feet per day of gas through the Maritimes & Northeast Pipeline to the U.S. Northeast.
The C$750 million Irving project is counting on initial shipments of 500 million cubic feet per day to Eastern Canadian and New England markets, also in 2007, with hopes of eventually doubling those volumes.
Still alive are plans for a third LNG terminal in Atlantic Canada — A C$4 billion facility on Nova Scotia’s eastern coast by privately held Keltic Petrochemicals.
Three months ago, Keltic said it was making progress towards lining up a supplier to start delivering 1 bcf per day in 2007.
One third is tagged for Keltic’s petrochemical complex and the rest is earmarked for shipment through Maritimes & Northeast to Atlantic Canada and the U.S. Northeast.
Earlier this year, rumors identified Marathon as the likely supplier after officials from that company visited Keltic’s terminal site.
