Repsol SA has moved closer to providing LNG to Europe from the east coast of Canada after securing an export license amendment despite objections from a Nova Scotia natural gas distributor.
The Canada Energy Regulator (CER) granted Repsol’s Saint John LNG Development Co. (SJLNG) a six-year extension, giving the company until May 2032 to begin exporting liquefied natural gas from a proposed overhaul of its New Brunswick import terminal.
The approval rejected opposition from Nova Scotia distributor Eastward Energy Inc. The company had sought a review of the Eastern Canadian gas market because of the loss of offshore production in 2018 and the war between Russia and Ukraine.
“Substantial changes have happened to the Maritimes gas markets since 2015,” CER said. It noted that SJLNG had secured its export license for a conversion proposal that was eventually discarded as uneconomic during a period of cheaper international energy trade.
However, the agency added that, “None of the changes enumerated by Eastward Energy demonstrate that the overall functioning of the market has changed.”
The CER conceded, “The Maritimes gas market is not as well connected to the North American gas market as most other Canadian markets are and may have some additional risks to gas supply, as described by Eastward Energy.”
All Canadian gas markets are monitored, however and the CER has legislated authority to prevent shortages by intervening if failures jeopardize regional supplies.
The revived export proposal aims for initial overseas deliveries of 300 MMcf/d or only 40% of the target volume in the initial proposal.
No decision has been made to build the proposed addition to the largely unused import terminal on the New Brunswick coast, SJLNG said in its export license request. The extension approval would only allow extra time to develop the export project.
The project’s main hurdle would be securing feed gas supplies, according to the CER filing. A wide gap in the Canadian pipeline grid would make SJLNG rely on roundabout deliveries from across the eastern United States and north to New Brunswick.
No pipeline from the producer provinces, Alberta and British Columbia, reaches the Atlantic seaboard. An SJLNG export terminal would import eastern U.S.- or Western Canadian-sourced gas via the Maritimes & Northeast Pipeline (M&NE).
No production has occurred in Atlantic Canada since offshore platforms closed in 2018, except small heating season flows from legacy land wells. New Brunswick, Nova Scotia and Quebec banned hydraulic fracturing to tap shale gas for replacement supplies.
“Numerous aspects of the proposed expansion remain uncertain and the timeline for first natural gas imports” via M&NE “and LNG exports is currently unknown,” the CER filing said.
