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

To: Dennis Roth who wrote (697)	3/15/2006 5:45:00 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 919

Construction of Cape Breton LNG terminal to slow down: Anadarko Corp. canadaeast.com MELANIE PATTEN HALIFAX (CP) - Construction of a liquefied natural gas terminal at Bear Head, N.S., will be slowed as Anadarko Petroleum Corp. (NYSE:APC) continues its search for a suitable supplier. A spokeswoman confirmed Tuesday that the Houston-based company plans to ease off on tank construction and expenditures this year at its site along the Strait of Canso in southern Cape Breton. Lee Warren said the company is in talks with more than one gas supplier, but declined to be more specific. "It is taking longer than we had initially anticipated," Warren said from Calgary. "It is a very complex and competitive task." Warren would not speculate on when a supplier would be selected, but a company statement said a decision should be made during the next few quarters. The company had initially hoped a supplier would be selected by the end of 2005. Liquefied natural gas, or LNG, is natural gas supercooled to liquid form for transport by sea on tankers. Importing natural gas from other countries is seen as a key way to supply North America with sufficient quantities of the fuel in the future as domestic supplies wane. At the terminals, LNG from overseas is converted back to gas before entering distribution pipelines in North America. Mark Friesen, an industry analyst with FirstEnergy Capital in Calgary, said Anadarko made the right decision to slow down construction, though it will not be something the market will want to hear. "In this type of situation, no news is not good news," he said. Friesen said other companies have been able to secure suppliers despite intense competition. "I'm not saying it's easy to find (LNG supply), but I think it's a competitive enough market that you could be out there courting someone," he said. "But if you're looking to be your own supplier. . .or looking for supply from very specific countries or regions, that could be challenging." Chris Theal, an energy analyst with Tristone Capital in Calgary, said the news didn't surprise him. "It's all about supply, and clearly Anadarko is struggling to find supply, so it makes sense to halt the project until they can get it." However, he noted it puts the company at the "bottom of the list in terms of probability of success." Warren insisted the company remains committed to the project, and work on the terminal will not stop completely. As work slows down in Cape Breton, Calgary-based Petro-Canada (TSX:PCA) announced Tuesday it was moving ahead with an LNG project in Russia. The Canadian company and Russian natural gas giant Gazprom signed a deal for the initial engineering design of a gas liquefaction plant near St. Petersburg, Russia. Petro-Canada plans to import Russian gas to North America to meet growing demand from consumers and industry. The company and pipeline company TransCanada Corp. (TSX:TRP) are partners in a $500-million proposal to build and operate a regasification terminal at Gros-Cacouna harbour on the St. Lawrence River, about 15 kilometres northeast of Riviere-du-Loup, Que. Another LNG project planned for Quebec, a $700-million Rabasca terminal near Quebec City, is backed by Quebec's leading gas distributor, Gaz Metro (TSX:GZM.UN), Calgary-based pipeline company Enbridge Inc. (TSX:ENB) and Gaz de France. In New Brunswick, Irving Oil and Spanish energy company Repsol have proposed a plant for Saint John, N.B. Other LNG projects have also been proposed for British Columbia and Goldboro, N.S. As for the Cape Breton project, Anadarko confirmed Tuesday it is focused on getting its gas delivered some time between 2009 to 2011. Billy Joe MacLean, the mayor of nearby Port Hawkesbury, said he wasn't concerned by the delay and he's confident a supplier will be found. "If not, they'll take in a partner, or partners, or they'll sell out to somebody who has gas," MacLean said Tuesday. "At the end of the day, we'll have LNG in the Strait (of Canso)." --- Related story: Industry scramble for LNG still a fluid affair canada.com