Liquefied Natural Gas in Atlantic Canada
In 2006, no less than three Atlantic Canadian LNG (liquefied natural gas) facility projects continued their slow, deliberate scaling of the regulatory and economic peaks that stand between the proposals and completed construction and start-up. Should any of the projects succeed in the near term, it will be at the vanguard of introducing LNG to the North American marketplace.
Long in use in several international jurisdictions, LNG is natural gas cooled at the production source to -160 Celsius to reach a liquid state. At 1/600th of its original volume, it is then shipped to a regassification plant closer to one of the major global markets. There it is returned to gaseous form for delivery to customers, generally through pipelines.
The Atlantic Canadian LNG project closest to being realized is the $750 million Canaport LNG facility in Saint John, New Brunswick. A joint venture by Irving Oil Limited and Repsol, a Spanish company with long experience in LNG, this extension to the existing Canaport deepwater marine terminal is the largest construction project in the province of New Brunswick.
Closely associated is the $350 million Brunswick Pipeline project, a 145 km pipeline from the Canaport facility to Maine. This puts Saint John, the closest Canadian city to Maine, in the enviable position of becoming the regional energy hub.
Meanwhile, two other LNG projects are on the horizon in Nova Scotia.
Still in the public hearing stage is a massive $4 billion project, which would see Keltic Petrochemicals build an integrated LNG and petrochemical complex in Goldboro. Then there’s the stalled Anadarko Petroleum Bear Head project near Port Hawkesbury, which remains in limbo.
These projects hold out the promise of energy supply diversification for Nova Scotia, as well as competitively priced and environmentally friendly fuel options for electrical generation. Notwithstanding the ambiguous status of the Kyoto Accord, the long-term trend is toward cleaner energy sources, of which natural gas is one.
These projects also offer the tantalizing prospect of establishing a Nova Scotia petrochemical industry cluster, since they tap into the global LNG supply network. While it’s early to tell how this will pan out, the possibility exists where there is LNG but are unlikely without.
Finally, they help tip the scale toward economic production of natural gas offshore Newfoundland and Labrador. The impressive gas resources of the Jeanne d’Arc Basin and the Labrador Shelf (which, at some 10 trillion cubic feet, exceeds the MacKenzie Gas resource) are currently stranded. However, at least one proponent appears to see potential to monetize them: in late November North Atlantic Pipeline Partners quietly filed environmental documentation toward establishing a transhipment facility near Come by Chance in Newfoundland.
The pieces may well be falling into place for development of new gas resources in Atlantic Canada.