LNG plant clears hurdle
Environmental OK may set stage for N.S.-N.B. pipeline access fight
By JUDY MYRDEN / Business Reporter
Tuesday, August 10, 2004 The Halifax Herald Limited
herald.ns.ca
A proposed $450-million plant for Cape Breton to process super-chilled liquefied natural gas got environmental approval Monday from the federal and provincial governments.
It was the first regulatory hurdle cleared by Access Northeast Energy Inc. of Calgary in its bid to build and operate a liquefied natural gas terminal at Bear Head, on the Strait of Canso.
"It's a first, very significant milestone, and that sets the course for a whole series of other permits," said Kim West, a Halifax spokeswoman for Access Northeast.
The company will also need provincial approval to build the plant and will have to submit evidence that the project will benefit the province.
She said the project is on schedule to start operation in 2007 and is being backed by ARC Financial Corp. of Calgary, Canada's largest private energy investment equity firm.
The news comes three days after Irving Oil of Saint John got the green light from the New Brunswick and federal governments to build a $750-million LNG plant to start operating by 2007.
One energy analyst said that's not a coincidence, since the two provinces could be vying for pipeline access to ship the incoming gas to the U.S. northeast.
Damien Dufour, president of Dufour Energy Commodities of Calgary, said Maritimes and Northeast Pipeline, operators of the only gas access route from the U.S. to Atlantic Canada, could be caught in a "battle" between Nova Scotia and New Brunswick.
There are four LNG terminals in the United States and none in Canada, but that could change, given the approvals in New Brunswick and Nova Scotia.
Mr. Dufour said many LNG sites in the United States can't get environmental approval, so for two to get the go-ahead in Atlantic Canada is significant.
But he warned: "Remember, there is limited capability to move the gas south because there is a limit on the size of the pipeline."
Mr. Dufour said there may not be room along the pipeline for the two projects, which are scheduled to come on stream at the same time.
"So the pipeline will have to be expanded - so that is a another whole can of worms. That's the biggest issue right now.
"It's a question of how do you move it. It will be a battle between Nova Scotia and New Brunswick (as to) who gets pipeline capacity."
No contracts have been signed with a pipeline owner, but staff from Maritimes and Northeast, which transports Sable gas to New England, have talked to Access Northeast officials. Maritimes and Northeast is seen as a strong candidate to carry the LNG.
Nova Scotia Environment Minister Kerry Morash said the approval for Access Northeast has been granted under strict conditions.
Terms of the huge project include storm water management, air quality controls and development of an emergency spill contingency plan.
Access Northeast must also submit a monitoring plan for the protection of a rare species of orchid called the southern twayblade.
Ms. West said the project will meet all government requirements.
"There was nothing that we heard today that we hadn't anticipated . . . really no surprises," she said.
Access Northeast announced last August its plans to build and operate an LNG terminal, along with unloading facilities, storage tank area and regasification section.
A company spokesman has said the project would employ about 1,100 people at the peak of construction and 30 to 40 when in operation.
The liquid natural gas would be brought to the terminal by huge ships from Qatar and Algeria, then transported to market by pipeline.
Access Northeast filed its environmental assessment May 9, asking for approval from the provincial and federal governments. The public had 30 days to submit comments.
Since then, two other LNG plant proponents, Statia Terminals of Point Tupper and Keltic Petrochemicals of Halifax, have announced plans for projects in the Strait of Canso and Goldboro, Guysborough County. Neither has filed an environmental assessment.
The Irving facility, outside Saint John, will be located at Irving's Canaport, next to the firm's major oil refinery and close to a major market, the U.S. eastern seaboard. Canaport is 95 kilometres from the American border.
Irving Oil has said it will build three 160,000-cubic-metre LNG tanks, which are capable of carrying up to one billion cubic feet of natural gas per day.
The Strait terminal would produce 750 million to one billion cubic feet of gas per day - equivalent to an average day's supply of natural gas for up to four million homes.
LNG represents about six per cent of worldwide natural gas consumption and about 94 per cent in Japan, where it has been used for years. |
