Irving, Repsol sign New Brunswick LNG pact

The Associated Press

Encouraged by a 25-year freeze on property taxes, Irving Oil Ltd. and Madrid-based Repsol YPF have signed definitive agreements to develop a $750-million liquefied natural gas terminal in Saint John, New Brunswick.

The agreements create a new company, Canaport LNG, which will construct own and operate the terminal by 2008, the firms said June 7.

The terminal will initially be capable of delivering one billion cubic feet per day of regasified LNG, as provided in an existing permit. Repsol will be responsible for providing all of the LNG while Irving will market the regasified LNG in Atlantic Canada, and Repsol will sell it elsewhere in Canada and in the United States.

“The parties have nearly completed front-end engineering design for the terminal, and plan to request proposals for engineering, procurement and construction contracts during July of this year,” the companies said in a release.

In May, people opposed to a lucrative tax break by the City of Saint John presented a petition at the New Brunswick legislature that called for the deal to be revoked. It’s estimated the tax concessions will cost the city as much as $125 million.

Eyeing spin-off benefits, Saint John common council voted to freeze property taxes for the terminal at $500,000 a year for 25 years, with no adjustment for inflation.