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Anadarko Secures Capacity Agreements for Proposed LNG Terminal in Nova Scotia

Anadarko Petroleum Corp. last week signed agreements for nominated capacity on a planned expansion of the Maritimes & Northeast Pipeline system to deliver volumes into Canadian and U.S. markets from the producer's planned Bear Head liquefied natural gas (LNG) import terminal, which is scheduled to start up in 2008.

Construction of a C$600 million LNG terminal and regasification facility on Cape Breton Island, along the Strait of Canso in Nova Scotia, is on track to begin this summer after Nova Scotia Business Inc. sold an industrial site to Bear Head LNG Corp., an Anadarko subsidiary, earlier this year (see NGI, May 9). The 1 Bcf/d terminal, which would be built in Point Tupper, received final approvals last year and is expected to be in service in 2008 (see NGI, Aug. 16, 2004). The LNG site includes 179 acres of land and a 67-acre water lot.

"This is a critical step in Anadarko's development of an integrated LNG project," said Karl Kurz, Anadarko senior vice president, Marketing and General Manager, U.S. Onshore. "With transportation arrangements now secured into premier North American natural gas markets, Anadarko has added value and visibility to the project while we continue to move forward with LNG supply negotiations."

The Maritimes' pipeline expansion is still in the early stages, but company officials set a target date of November 2008 to triple the capacity of its 850-mile pipeline to 1.5 Bcf/d from its current capacity of 400 MMcf/d (see NGI, May 2). The proposed expansion would allow the system to accommodate Anadarko's initial Bear Head sendout capacity of 750 MMcf/d to markets in eastern Canada and the U.S. Northeast. The Bear Head terminal site on Point Tupper is approximately 35 miles from the existing pipeline.

Anadarko acquired the Bear Head terminal project last year, and construction planning, site clearing and leveling, and construction of access roads for the Bear Head terminal began in late 2004 to prepare the site for major construction in 2005. In April, Anadarko entered into an agreement with Horton CBI Ltd. for engineering services and procurement of certain materials necessary for the construction of two 180,000-cubic-meter LNG storage tanks. Bidders also have been short-listed to participate in the engineering, procurement and construction contract for the terminal, which is expected to be awarded later this year.

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