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

To: Dennis Roth who wrote (813)	3/23/2006 7:51:54 AM
From: Dennis Roth	Read Replies (1) \| Respond to of 919

LNG project won’t start soon Anadarko having trouble securing gas source, analyst says By JUDY MYRDEN Business Reporter thechronicleherald.ca It could take years for the developers of a proposed $750-million US liquefied natural gas terminal in Cape Breton to resume construction, says a Calgary energy analyst. Last week, Houston’s Anadarko Petroleum announced it is "rescheduling" the timing of on-site construction at its proposed Bear Head site near Port Hawk-esbury until it finds a supply of liquefied natural gas. The gas, coming from Qatar, Algeria and Russia, is cooled to liquid form to allow for efficient transportation from overseas by ship. It’s then processed for markets in the energy-hungry American northeast at a regassification terminal, such as the one being proposed at Bear Head. "It may take one or two years . . . I think it’s really challenging to see that project materialize at all," Chris Theal, an analyst at Tristone Capital, said in an interview Tuesday. "Obviously, they’re having trouble locking up a source of gas. In my mind it’s only logical they made that announcement." He said Anadarko’s problem of being unable to find a gas supply is now coupled with the fact that its Nova Scotia competitor, Keltic Petrochemicals, announced Monday it has teamed up with two European partners to bring gas to its LNG regassification terminal for operation in 2010. "I think that creates additional challenges for Anadarko…. Anadarko is a distant third," said Mr. Theal, referring to the Keltic Petrochemicals project in Goldboro and another rival project in Saint John, N.B., led by Repsol, Spain’s largest oil and gas company, and Irving Oil Ltd. While there are currently no LNG terminals in Canada, there are eight being proposed across the country; including three in the Atlantic region, three in Quebec and two out west. He said it was "logical" for Anadarko to "put the brakes on construction" after forecasting it would sign a deal for gas by January 2006, but the Russian company it was negotiating with announced it was instead teaming up with Petro-Canada. He said Anadarko had been trying to reach a long-term deal for gas with state-owned Russian giant Gazprom, which already produces 20 per cent of the world’s gas, but it didn’t work out. On the same day that Anadarko announced its slow down at Bear Head, Gazprom and Petro-Canada announced they were partnering to import Russian gas into North America to meet growing demand from consumers and industry. "Anadarko was trying to negotiate their way into that," said Mr. Theal. The Houston-based company took over the permitted LNG site in August 2004 and it would be its first foray into LNG. Since then, the company has spent about $91.6 million on consultants, lawyers and engineering work. On Monday, Keltic Petrochemicals announced it will receive a crucial supply of liquids to feed its proposed $4.5-billion petrochemical plant that will make raw plastics, and Maple LNG, the Canadian affiliate of two European energy companies, will develop and control the LNG regassification terminal. The deal by Keltic to sell the LNG interests to Maple, made up of 4Gas of Rotterdam and Russian-owned Suntera, an international energy company owned by Sun Energy Resources Ltd., and Itera, which has significant interests in Russian gas, was signed last Tuesday. "I think you have a very clear picture today of what the LNG market looks like today in Eastern Canada." ( jmyrden@herald.ca