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Canaport Terminal Gets LNG Import, Export Licenses

Repsol Energy Canada Ltd. has been approved for a 25-year license to import liquefied natural gas (LNG) at the Canaport LNG Terminal at Mispec Point, near Saint John, NB, and a separate 25-year license to export regasified LNG to the U.S. Northeast by Canada's National Energy Board (NEB). Permission to export domestically produced Canadian gas to the United States was denied, however.

The regasified LNG will serve the Canadian market and be available for export to the United States through the Emera Brunswick Pipeline.

Canaport LNG LP, the partnership of Spain's Repsol YPF and Canada's Irving Oil, said in the spring that the overall Canaport project is 70% complete with 50% of the construction completed. According to its website, as of July the project was 83.3% complete overall. The company said the terminal is expected to be operational by the end of 2008. At commissioning, the terminal will have a sendout capacity of 1 Bcf/d with a peak capacity of 1.2 Bcf/d and could be expanded to 2 Bcf/d (see NGI, Sept. 10, 2007).

The Emera Brunswick Pipeline, which received NEB approval last summer (see NGI, June 4, 2007), when completed will be a 90-mile, 30-inch diameter pipeline extending through southwest New Brunswick to an interconnection with Maritimes & Northeast at the Canadian-U.S. border near Saint Stephen, NB.

The NEB said last Thursday that it is satisfied that the proposed import of LNG at Canaport is in the Canadian public interest. It concluded that the volumes to be imported would be a useful addition to the supply of gas in North America, supplementing supply available to Canadians. The NEB was also satisfied that Repsol will make the imported LNG available to Canadian buyers with the same financial terms and prices that will be given to export customers, it said.

However, the NEB denied Repsol's request to export Canadian-sourced natural gas as part of the export license. Repsol's application did not contain sufficient information to meet the requirements of the market-based procedure for evaluation, NEB said.

According to the NEB's document on its decision, Repsol argued that "even though it does not have any firm contracts with Canadian suppliers for the export of gas, it should have the flexibility, under the proposed license, to export domestically produced gas. Such gas would be exported in addition to, or in lieu of, imported regasified LNG. If Repsol had the opportunity to acquire and export gas sourced in Canada at some point in time over the course of the 25-year license, it would be because market forces have made such a transaction possible."

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