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Irving, Repsol agree on LNG project New Brunswick terminal would be first in Atlantic Canada Gary Park Petroleum News Calgary Correspondent
Irving Oil has teamed up with Spain’s Repsol to keep ahead of the pack chasing the first liquefied natural gas project in Atlantic Canada.
After a week of rumors, the two confirmed Sept. 24 that they will develop a C$750 million LNG terminal in New Brunswick to supply Eastern Canadian and northeastern U.S. markets.
The plant at Irving Canaport is expected to come on stream in 2007 at 1.8 trillion cubic feet of initial capacity a year, with combined capacity of 1.7 bcf in three storage tanks and output of 500 million cubic feet per day that could double.
The facility was the first to receive environmental approval among the LNG proposals for Atlantic Canada, including three for Nova Scotia.
Kenneth Irving, the head of privately held Irving Oil, said he was “very pleased” that Repsol was contributing its years of LNG experience to the venture.
Madrid-based Repsol is Europe’s fifth largest integrated oil and gas company, with operations in 28 countries.
Privately owned, it controls 5.3 billion proven barrels of oil, concentrated in Latin America, the Middle East and North Africa and owns 99 percent of YPF, Argentina’s largest oil company and the source of 67 percent of its output last year.
Repsol said in a statement that the location of the Irving Canaport project, just 60 miles from the U.S. border, gives easy access to Boston and New York, the markets with high potential for growth.
Repsol’s other plans include a US$350 million regasification terminal on Mexico’s West Coast to supply Bolivian gas to Mexican and U.S. West Coast markets. Multiple U.S. terminals expected The U.S. Manufacturers Alliance said in a report earlier in September that the United States will open eight new LNG terminals by 2010 to nearly double the present LNG supplies and raise the import gas market share to 18 percent.
Of the other Atlantic Canada schemes, Anadarko Canada has several regulatory barriers to clear before it can start work on the C$450 million, 1 bcf per-day Bear Head project in Nova Scotia.
Although an environmental assessment has been approved, construction and transportation plans are before regulators along with National Energy Board permission to produce natural gas at the facility.
Anadarko took over the plan from privately held Access Northeast Energy in August and is looking for an international partner to share in the construction costs, a spokeswoman for the company told the Halifax Chronicle Herald.
She said that partner will likely be a national oil company that wants to gets to get its gas to North America, listing Qatar Petroleum and Algeria’s Sonatrach as “obvious” candidates.
Another key component is negotiating a deal to gain access to the Maritimes & Northeast Pipeline from Nova Scotia’s Sable gas field to the U.S. Northeast.
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