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Gold/Mining/Energy : LNG -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (474)	5/16/2005 12:07:16 PM
From: Elmer Flugum	Respond to of 919

Wall Street Journal on Friday reports that a glut of LNG may be coming.... "LNG Exporters Weigh Strategies To Avoid A Glut" WSJ, p. A2 Another resource: lngjournal.com len

To: Dennis Roth who wrote (474)	10/11/2005 7:36:56 AM
From: Dennis Roth	Respond to of 919

LNG powers regional investment and energy hub BILL SIMPKINS PLUGGED IN NB Telegraph-Journal \| General Business As published on page C1/C2 on October 11, 2005 canadaeast.com Unless you have been living under a rock, you know that energy issues are at the top of the public agenda. And the energy turbulence in the U.S. may create a storm of spin-off opportunities associated with local liquefied natural gas (LNG) interests that provide a foundation to attract more investment to New Brunswick. While the U.S. energy picture remains a puzzle, one thing for certain is that the appetite for energy will continue to grow. Natural gas consumption is projected to increase from 22.5 trillion cubic feet (Tcf) in 2002 to 31.4 Tcf by 2025. And the U.S. will be faced with fewer supplies from Canada after 2010 as Canadian fields mature and our own demand increases. The U.S. Energy Information Administration (EIA) predicts that LNG will become the largest source of net U.S. imports by 2015. So the race is on to supply the U.S. market with natural gas through new LNG projects. The EIA projects that four new LNG regasification terminals will be constructed on the Atlantic and Gulf Coasts from 2007 to 2010 to meet a 58 per cent increase in LNG imports. And there are at least two dozen proposals to build LNG terminals over the next several years including projects in Nova Scotia. New Brunswick is uniquely located close to the U.S. market and energy exports continue to propel the provincial economy. The province's energy exports rose to $4.6 billion last year and are up about 35 per cent year over year. The province continues to gain steam as an energy hub in Atlantic Canada. The Irving Oil refinery is already a major contributor. The refinery is the biggest in the country, refining 280,000 barrels of oil per day with 70 per cent of the products going to the U.S. market. That amounts to about half of all of Canada's refined petroleum product exports. The refinery was part of a long term vision when it was built in 1960 in partnership with Chevron Corp. Now Irving Oil's LNG partnership with Repsol of Spain promises to replicate the refinery success story. "We see the LNG project as a foundational project that makes other projects possible. This project adds to the energy hub concept in southern New Brunswick, and will make it easier to attract other investors to the region, both in the energy industry and in supporting industries. These investments mean more jobs for more people," says Daniel Goodwin, spokesperson for Irving Oil. The LNG project requires a massive $750 million investment and that means additional spin-off benefits could produce another $1.5 billion boost to the local economy. This project alone will create 700 construction jobs and at least 40 permanent jobs at the terminal alone. The investments will support a bigger tax base for governments and provide more benefits to the province. The project will generate $15 million per year in taxes including capital, corporate income, personal income, property and usage taxes. Direct labour income during construction is estimated to be $26 million with indirect expenditures of $14 million. And the project will generate more than $3 million in port and related fees. The solid energy infrastructure already in place could attract further investment to this potential Atlantic Canada energy hub. The combination of LNG, Canaport (the largest deep water port north of Louisiana) and the refinery provide the genesis of an attractive energy hub for Atlantic Canada. Can a petro-chemical and plastics industry investments be far behind? The potential for manufacturing of base and specialty chemicals would further strengthen the ability of Saint John to compete for world-scale investment. More local business growth will surely follow providing even more opportunities and demonstrating that New Brunswick is a great place to invest, live and to work. Irving Oil has fortunately focused its investment strategy in the province. Paced development and patient investment that take advantage of local opportunities have been the hallmark of the company's success. The company's decision to build an LNG terminal may seem prescient today but it began with a vision more than four years ago. New Brunswick is well positioned for success in the energy field. The province has a vision for a diversified economy that attracts business and new industries with opportunities. LNG is a bright light in a regional economy that has suffered from the loss of manufacturing jobs. And LNG is positive news as the Atlantic Provinces Economic Council (APEC) reports that there are fewer major projects on the books to support the Atlantic economy. As New Brunswick enters a new global business, thoughts of Saint John as a major energy hub are not out of the question. Bill Simpkins is an energy industry consultant living in Halifax. He can be reached at bsimpkins@eastlink.ca.