A three-year reprieve has been granted from a provincial deadline at the end of this year for a delayed Australian plan to build a natural gas export terminal on the Canadian east coast in Nova Scotia.
Perth-based Bear Head LNG Corp. (BHLNG) was given until the end of 2022 by the Nova Scotia Utility and Review Board for the construction permit for the liquefied natural gas (LNG) terminal and companion Bear Paw Pipeline.
The firm’s successful extension request described formidable hurdles that Canadian east coast export proposals face after offshore gas production ended and onshore replacements were ruled out by Nova Scotia, New Brunswick and Quebec bans on unconventional drilling, including hydraulic fracturing.
“BHLNG has been delayed in initiating construction due to the difficulty in securing the necessary natural gas feedstock for the LNG facility,” the firm said. In addition, “Bear Head has been negatively affected by changes in global energy market conditions.
“These market condition changes include a substantial imbalance in the current LNG supply-demand situation, deferral of long-term purchase commitments by the market and instability in energy pricing including LNG.”
The Australian firm bought the estimated C$5 billion ($3.8 billion) Nova Scotia project in 2014 from Anadarko Petroleum Corp. for $11 million, and it has held a federal export license for 1.6 Bcf/d since 2016. In 2016, Bear Head proposed building a 1,600-kilometer (1,000-mile) pipeline to carry Western Canadian gas to the east coast for LNG exports.
Despite the supply and market obstacles, “We are very optimistic that we will secure the necessary feedstock during the extension period,” BHLNG officials said.
Work is underway on securing western gas and pipeline service for deliveries across 3,000 miles of Canada and the United States from Alberta and British Columbia to the proposed terminal site on Nova Scotia’s Atlantic coast.
BHLNG, the Assembly of Nova Scotia Mi’kmaq Chiefs, Nova Scotia Construction Labor Relations Association and Cape Breton Unions have announced project participation and benefits agreements.
The Australian firm also sponsors the more advanced yet still delayed Magnolia LNG project in Louisiana, which has received regulatory permits, awarded a construction contract and completed a supply deal with a power plant in Vietnam.