Statia Terminals explores LNG terminal at the Strait of Canso.
Wednesday, June 30, 2004 The Halifax Herald Limited
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Statia Terminals is exploring the idea of building a liquefied natural gas plant at the Strait of Canso.
Gas plant
proposed
Statia's LNG facility would be second built at Strait
By TOM PETERS / Business Reporter
Statia Terminals says it is serious about spending hundreds of millions of dollars on a liquefied natural gas project at the Strait of Canso.
If the project goes ahead it would be the second LNG facility earmarked for the Strait.
Calgary-based Access Northeast Energy Inc. is well along in its plans to build a $450-million plant and terminal at Bear Head.
Paul Crissman, president of Statia Terminals Canada Partnership, said Tuesday that Statia has been considering an LNG facility for several years.
"Statia Terminals is already in the petroleum storage business, so going into LNG importation is a natural fit for us," he said.
The Access Northeast project will include liquefied natural gas plant with terminal, unloading facilities, storage tank area and re-gasification area at Bear Head.
The Bear Head site is only a short distance from Statia Terminals.
Access Northeast has already filed is environmental assessment documents and has been receiving comments.
Gordon Hart, president of Access Northeast, said in a telephone interview from Calgary on Tuesday that he welcomes competition.
"I don't know how real the project is because at this stage I have not seen a project description or anything of that nature," he said.
"I do know in our case we spent two years developing this project and it will take at least two years or more to develop any other projects. . . . They will likely have to go through the same process as we did," he said.
The first step for Access Northeast was to prove its business case to the provincial government.
Mr. Hart warned that the market in the northeastern U.S., where the gas would be piped, could not sustain more than one or two LNG sites.
Irving Oil of Saint John, N.B., also has plans to build a liquefied natural gas plant at its Canaport facility, the company's oil-handling operation.
The proposal has cleared some regulatory hurdles, and a public hearing into the project was scheduled for Tuesday in Fredericton.
"We are a market-driven facility and we do not want to hurt the market and pricing in Boston and New England," Mr. Hart said.
"If we were to overbuild we could damage the price in the marketplace and therefore hurt the offshore. . . . Producers could say they were not going to drill if they don't see a return that reflects market price."
He said industry has to be aware of these issues when designing and developing these facilities.
Mr. Crissman said there are several LNG facilities in the U.S. and many planned.
"I can't comment on their potential for success. . . . I think that is a concern right now, to see which projects are the most robust, which ones will make it past the drawing board and into the realm of viability," he said.
"Not all of them will."
The Statia president said the final design for an LNG facility should be finalized before the company begins a public consultation process.
"It is forthcoming, and it won't be in the long term," he said.
Mr. Crissman said Statia has already had discussions with potential users "and trying to match it up with market demand."
Statia has also been considering the potential for compressed natural gas.
Statia would bring the LNG into the Strait via larger tanker vessels and then move it to markets through a pipeline. Mr. Crissman said there has been some discussion about using the Maritimes and Northeast Pipeline system.
Port Hawkesbury Mayor Billy Joe MacLean says he welcomes the news of any new project for the Strait but is skeptical about Statia's motivation.
Mr. MacLean said Statia, at one point, scoffed at the idea of an LNG facility, saying it would not be a successful venture.
"I do hope that the powers that be do not slow down the process of the one industry we have in hand and wind up losing both of them," he said.
"So I hope the government officials and boards will deal with the first project and finalize it before moving on to look at another."
Mr. MacLean said Access Northeast met with local officials long before it made its plans public, but that hasn't happened with Statia.
"Here, all of a sudden, Statia arrives on the scene, a company that is on our doorstep that has never had a discussion with local leaders," he said.
"I am the chairman of the mayors and wardens committee for the Strait, and we are fully committed with support on record for the project of Access Energy. |
