Atlantic Canada offers international LNG bridge

Gary Park

Petroleum News Calgary correspondent

Canada’s East Coast could be the ideal bridge for shipments of liquefied natural gas and compressed natural gas to the United States, according to Doug Bloom, president of Maritimes & Northeast Pipeline, the exclusive carries of Sable gas to the U.S. Northeast.

He said two LNG projects rolled out earlier this year for Atlantic Canada could both proceed, partly because of the failure to make new gas discoveries offshore Nova Scotia to build on the Sable project.

Bloom said the region is an obvious landfall for international LNG shipments seeking ice-free deepwater ports and ready access to U.S. markets.

Irving Oil has indicated its intention of starting work in 2004 on a C$500 million LNG terminal in New Brunswick with capacity for 500 million cubic feet per day, while Access Northeast Energy is targeted January 2005 to proceed with a Nova Scotia terminal, costing up to C$300 million and handling 750 million cubic feet per day.

In addition, he said Newfoundland would be an ideal location to test compressed natural gas technology to exploit that province’s untapped offshore gas reserves, where about 5 trillion cubic feet of discovered gas is stranded in several fields.

The gas is currently reinjected to maintain reservoir pressures in Newfoundland’s oil fields, but industry interest is building in the prospects of recovering the gas with compressed natural gas technology, Bloom said.

The M&NP pipeline is currently carrying 500 million cubic feet per day, 100 million below capacity that could easily be raised to 1 billion cubic feet per day with more compression and minimal new pipeline construction in the U.S.

He said the bigger issue hinges on how confident LNG suppliers feel about increasing volumes without undermining prices.