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

To: Dennis Roth who wrote (501)	9/22/2005 11:00:53 AM
From: Dennis Roth	Respond to of 919

Race to U.S. market leads Repsol to Saint John Petroleum giant chose Irving Oil as LNG partner because infrastructure, gov't approval in place Telegraph-Journal staff NB Telegraph-Journal As published on page C1/C2 on September 22, 2005 canadaeast.com Existing infrastructure and regulatory approval were key to attracting oil and gas multinational Repsol YPF to New Brunswick and a majority partnership with Irving Oil Limited to import and process liquefied natural gas. The Spanish multinational has a 75 per cent stake in Canaport LNG, the corporate name for Saint John's LNG facility, to be built adjacent to Irving Oil's existing deepwater terminal in the Bay of Fundy. Irving Oil owns the remaining 25 per cent. This project has permits and gas," said Canaport LNG engineer and construction manager Adolfo Azcarraga. "If you look at the other projects (along the United State's eastern seaboard) about 90 per cent of those don't have anything." Mr. Azcarraga was part of Repsol's negotiating team and said Saint John's ice-free port, Irving Oil's existing infrastructure at Canaport and the government approval made this deal particularly attractive. "The environmental permit is very important," he said. "A project is not a project until it gets a permit." Irving Oil received regulatory approval for the LNG project in August 2004 from both the federal and provincial departments of Environment and the federal Department of Fisheries and Oceans. It was the first LNG project in eastern Canada to receive approval. A week later a smaller project at Bear Head N.S., on the Strait of Canso, was also given government approval to proceed. In addition to the Saint John and Bear Head plants, there are proposals in Goldboro, N.S., Rivire-du-Loup, Quebec City and Robbinston ME. Further down the coast, there are plans for LNG plants in Rhode Island, Philadelphia, New Jersey, Long Island (which is facing significant opposition), Maryland and four in the Boston region. According to the U.S. Energy Department, the country imports about 16 per cent of its natural gas - most of it from Canada via pipeline. However, by 2025 demand is expected to increase by 37 per cent, and there isn't enough North American-produced natural gas to satiate that hunger. The U.S. is going to have to increase natural gas imports, and the only way to do that is to bring it across the ocean in specially-designed tankers in liquid form. Repsol, Spain's largest oil and gas company, is the largest supplier of LNG to the United States and it will supply Canaport's gas. "It's a good partnership. It has everything an LNG project needs," Mr. Azcarraga said. "Irving Oil has all the local knowledge of how to do things in this part of the world. We have the LNG experience from liquification, to ships, to re-gassification plants. I think both together we're completely complementary." When it opens in 2008 the new LNG terminal is expected to have 9 billion cubic metres of gas transported to it every year, or approximately 1 million cubic metres of gas per day. The gas pumped through the terminal in a single day would be enough to power 24 power plants generating 1,000 megawatts each. That gas is intended for Eastern Canada and the Boston market. The gas could come from Repsol's gas interests in Trinidad and Tobago, North Africa and elsewhere. The Saint John development is far from the only LNG project Repsol intends to invest in over the coming years. Between 2005 and 2009 the company's strategic plan calls for an investment of $21 billion Euros, or approximately $30 billion Canadian, in energy projects globally and LNG represents a significant portion of that. Meanwhile, the failure of Sable Island's offshore natural gas deposits to meet expectations, presented an opportunity for Irving Oil to finally enter the natural gas market. In the late 1990s it had partnered with Westcoast Energy in a bid to distribute natural gas through New Brunswick. It lost to Enbridge Gas New Brunswick. Now, with Canaport LNG, Irving Oil officials hope to position this new venture as a replacement to Sable Island as a natural gas supplier in the region. Sable Island reserves are now predicted to dry up around 2010. The combination of Irving Oil and Repsol will ensure customers have a constant and steady supply of natural gas, even when Sable Island ceases production, said Jeff Matthews, Irving Oil's director of business development. Repsol officials from Spain and Argentina will arrive in the next fiew months to set up a local office. The $750-million Canaport LNG project includes three LNG storage tanks, a re-gassification plant and a marine terminal for the receiving and unloading of LNG from ships at Irving Canaport, in operation at Mispec since 1970.