Lots of LNG proposed in Canada:
Energy giants join LNG race with plant proposal
TransCanada, Petrocan to team up
By DAVE EBNER AND PATRICK BRETHOUR
00:00 EDT Thursday, September 02, 2004
CALGARY -- TransCanada Corp. and Petro-Canada want to build a $660-million liquefied natural gas terminal in eastern Quebec, the sixth proposal in Canada for the controversial industrial projects that are quickly becoming an important part of the North American energy market.
Two receiving terminals are already moving ahead, in New Brunswick and Nova Scotia, and backers of such projects say liquefied natural gas (LNG) is the best way to satisfy North America's ever-growing energy appetite. Continental gas production is already in slow decline and TransCanada, the country's largest pipeline company, predicts that demand for natural gas will jump 20 per cent by 2012 from 2002.
"Even with new supply from the Northwest Territories, there's a need for LNG imports," said Kurt Kadatz, a TransCanada spokesman.
The planned TransCanada-Petrocan terminal near Rivière-du-Loup, if approved, could be operational in late 2009, handling about 200 billion cubic feet of gas a year, roughly 1 per cent of the annual natural gas use in the United States. The gas could supply Ontario, Quebec, the U.S. Northeast and the Midwest, depending on demand.
For Calgary-based Petrocan, the project is the first manifestation of the company's global gas strategy.
The strategy was first conceived last fall and is aimed at securing supplies overseas, building LNG infrastructure in North America and selling the product to the United States. TransCanada, also Calgary-based, is evaluating other LNG projects but would not provide details.
"It's smart to put these two players together," said Chris Theal, co-head of research at Tristone Capital Inc. "I don't think there's any sort of a risk of overcapacity in Eastern Canada."
LNG is gas that has been turned into a liquid for transport across oceans and is turned back into gas at receiving terminals for transport to customers. But LNG terminals aren't welcomed by some communities because of environmental concerns and the potential for a massive disaster. The worst such incident was the explosion in Cleveland in 1944 that destroyed a square mile of that city and killed 128 people.
A Maine fishing village in March voted against a proposed LNG terminal that TransCanada and ConocoPhillips Co. wanted to build. According to the U.S. Federal Energy Regulatory Commission, four LNG terminals are operating in the United States., six more have been approved and about three dozen are proposed.
Stiff opposition is already mounting against a proposed $700-million terminal on the St. Lawrence River near Quebec City.
In the Rivière-du-Loup region, about 200 kilometres northeast of Quebec City, area politicians say they have concerns but want to see the TransCanada-Petrocan project go ahead.
"There are a number of questions," said Paul Crête, the Bloc Québécois member of Parliament. "I believe that it is an important thing that this project be realized but we have to be sure it will be correct on environmental questions."
The mayor of Rivière-du-Loup, Jean D'Amour, said the approval process will provide necessary assurances that the project is safe and won't harm the local environment. The proposed site is about 15 kilometres northeast of Rivière-du-Loup on Gros Cacouna Island, near the idyllic village of Cacouna, known as one of Quebec's most beautiful. But the village is already home to a large industrial park and TransCanada had proposed a quarter century ago to build an LNG terminal there before energy prices plummeted and the project was shelved.
"It's not very often that a project like this, millions of dollars, comes to our area," Mr. D'Amour said. About 40 long-term jobs would be created if the terminal is built. Construction could employ as many as 1,000.
Like other such projects, it faces a long list of required approvals from all three levels of government, including bodies such as the National Energy Board, the Department of Fisheries and Oceans, and Transport Canada, all guided by the Canadian Environmental Assessment Act. The process is expected to take two years.
TransCanada will operate the proposed plant and provide the gas transportation expertise, while Petrocan is key in securing gas supply for the project. The companies will share the costs of development.
A month ago, Petrocan chief executive officer Ron Brenneman said the company is "seeking to move into the LNG business in a substantive way." The deal with TransCanada is only the first step in that move.
On the Toronto Stock Exchange, Petrocan closed up $1 at $62.50, while TransCanada shares rose 41 cents to $27.90.
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LNG: Canada's controversial new gas option
Canada is building or considering six liquefied natural gas projects that backers see as the answer to dwindling North American production. But critics see it as an environmental or explosion hazard.
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RIDLEY ISLAND
Near Prince Rupert, British Columbia
Backers: WestPac Terminals Inc., Moneta Capital Partners Ltd.
Estimated cost: Less than $300-million
Status: Proposed
Projected daily volume: 300 million cubic feet
Year of operation: 2009
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KITIMAT
British Columbia
Backers: Galveston LNG Inc.
Estimated cost: $300-million
Status: Proposed
Projected daily volume: 340 million cubic feet
Year of operation: 2008
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GROS CACOUNA
Quebec, near Riviere-du-Loup
Backers: TransCanada Corp. and Petro-Canada
Estimated cost: $660-million
Status: Proposed
Projected daily volume: 500-million cubic feet
Year of operation: 2009
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LEVIS/BEAUMONT
Quebec, near Quebec City
Backers: Gaz Métro LP, Gaz de France and Enbridge Inc.
Estimated cost: $700-million
Status: In approval process
Projected daily volume: 500 million cubic feet
Year of operation: 2009
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SAINT JOHN
New Brunswick
Backers: Irving Oil Ltd.
Estimated cost: $750-million
Status: Construction to begin soon
Projected daily volume: One billion cubic feet
Year of operation: 2007
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BEAR HEAD
Near Port Hawkesbury, Nova Scotia
Backers: Anadarko Petroleum Corp.
Estimated cost: $500-million
Status: Construction to begin soon
Projected daily volume: One billion cubic feet
Year of operation: 2007
© The Globe and Mail
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