List of planned LNG ventures grows

Gary Park, Petroleum News Calgary correspondent

The list of liquefied natural gas ventures is growing longer at the same time public interest in the commodity is building.

U.S. Federal Reserve Board chairman Alan Greenspan pushed LNG into the spotlight June 10 when he called for a “major expansion” of import capacity to offset the rise in gas prices and decline in domestic production.

Within days, ExxonMobil confirmed it is planning a terminal in the United States, while proposals for two terminals, with the United States as the major market, surfaced in Canada.

The three projects come on top of 18 proposals in various planning stages in the United States, where four terminals are already operating.

A mid-June report by Lehman Brothers analyst Thomas Driscoll predicted LNG imports will double in 2003 to about 2 percent of total U.S. supply and could climb to 5 percent by 2006-07 with the reopening and expansion of four established facilities.

He said gas prices in the range of $3-$4 per million British thermal units will promote significant expansion of LNG capacity.

ExxonMobil said it is examining three possible sites — on the Texas-Louisiana border, in Texas and somewhere on the East Coast — for its $1 billion terminal, which could open in 2006 with a capacity of 1 billion cubic feet per day.

Already producing about 20 percent of the world’s LNG, the Irving, Texas-based giant and its partners — ChevronTexaco, Marathon Oil, Sempra Energy and El Paso, are eyeing five LNG processing trains in Qatar with a combined capacity of 15 billion cubic feet per day from Qatar’s North Field, which has estimated reserves of 900 trillion cubic feet.

Irving Oil, part of a privately held New Brunswick-based conglomerate, has knocked the dust off a 2001 plan for a 500 million cubic feet per day terminal in its home province.

The C$500 million plan was shelved last year when gas prices fell and ChevronTexaco backed out of the venture.

A spokeswoman said Irving is now holding discussions with global LNG producers, including ChevronTexaco, on their possible participation in the scheme.

Construction could start in 2004, with a start-up date no later than 2006.

Meanwhile, newly established Access Northeast Energy said it has secured an option on land for a proposed LNG terminal, with capacity of 750 million cubic feet per day, in Nova Scotia.

Its primary focus will be on converting imported LNG back to natural gas which would then be shipped to the United States through the Maritimes & Northeast Pipeline from Nova Scotia’s offshore Sable field.

Initial capacity could be 750 million cubic feet per day, expanding to 1.125 billion cubic feet per day, with a projected capital cost of about C$500 million.