The future of the Gros Cacouna liquefied natural gas (LNG) terminal in Quebec has been cast into doubt by a decision by OAO Gazprom to cancel what would have been the terminal's key source of LNG.

The C$1 billion Gros Cacouna terminal, a project of Petro-Canada and TransCanada Corp., was to have been supplied by a proposed $3.5 billion liquefaction plant on Russia's Baltic coast. Gazprom said recently that it was dropping the liquefaction project in favor of other, more competitive projects in the region.

"As the potential anchor supply for the Cacouna terminal, Gazprom's decision not to pursue Baltic LNG is disappointing to us and we are reviewing the impact of this decision on our LNG strategy with our project partner," a Petro-Canada spokesman Kyle Happy told NGI. "Without the anchor supply in place we will have to reconsider our options for developing the site.

"Baltic LNG was regarded as the potential anchor source for the Cacouna project; however, Petro-Canada has been in discussions with a number of companies from North Africa, the Middle East and Asia concerning supply."

Happy said it would be premature to comment further on the company's plans for the terminal.

The future of Gros Cacouna, just inside Canada along the St. Lawrence Seaway, was looking fairly bright last summer. "Right now it's a green light," Cacouna Energy spokesman Andrew Pelletier said in August (see NGI, Aug. 20, 2007). "We're working toward a project announcement."

Forecast costs of the Gros Cacouna terminal, proposed to import an initial 500 MMcf/d of gas in the form of LNG, had climbed about two-thirds into the C$1 billion (US$940 million) range from early predictions of C$660 million (US$620 million), Pelletier said.

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