Spanish company undecided on whether to proceed with multi-billion dollar plant conversion
By Robert Jones, CBC News Posted: Feb 12, 2015 5:42 PM AT Last Updated: Feb 12, 2015 5:42 PM AT
The Spanish petroleum company Repsol formally applied this week to the National Energy Board for approval to export liquefied natural gas from its Canaport LNG facility in Saint John.
However, the company says that does not mean a decision has been made to proceed with a multi-billion dollar conversion of the plant.
“It’s a necessary step to make this a feasible project on paper,” said Repsol spokesman Kristain Rix from Madrid. “It’s one more tiny incremental step. We still need to do a lot more work.”
Canaport LNG was built nearly a decade ago with the purpose of importing LNG, regassifying it and sending it into the United States by pipeline.
But enormous shale gas developments in the U.S. have undercut the need for imports and Repsol has been studying whether to convert Canaport into an export facility instead of one used for import purposes. Published estimates have put the cost of that conversion as high as $4 billion.
The key issue for Repsol is to find partners to share the cost, but Rix says the idea of converting Canaport to bring in cheap gas by pipeline from the U.S., liquefy it on site and export LNG to Europe is attractive for many reasons.
“It is in a privileged location,” said Rix. “It has the largest storage capacity on the east coast of the whole of North America. It is connected with pipelines. It can berth the largest LNG tankers in the world, so the facilities are great.”