Daily GPI / NGI All News Access

Maritimes Cancels Transport Pact with Anadarko for Bear Head Terminal

Anadarko Petroleum called off an agreement for gas transportation capacity on a proposed expansion of the Maritimes & Northeast Pipeline because of the sale of the Bear Head liquefied natural gas (LNG) import terminal planned for Cape Breton Island near Point Tupper, NS, to private equity firm U.S. Venture Energy in July. The $125 million sale followed Anadarko's unsuccessful attempt to line up LNG supply in the global market.

In a filing with the Securities and Exchange Commission on Sept. 13, Anadarko said it received a notice of contract termination from Maritimes on Sept. 8. A letter to Anadarko from Maritimes revealed that the companies in May had agreed to a four-month extension of the expiration date associated with a contract termination option to no later than Sept. 10. Maritimes retained a right to terminate the contract if Anadarko failed to demonstrate that it had arrange for adequate LNG supply to support the operation of the Bear Head terminal.

Anadarko had signed a contract for 813,000 MMBtu/d of firm transportation on the Maritimes system. Repsol YPF, which is a cosponsor with Irving Oil in the 1 Bcf/d Canaport LNG terminal under construction in St. John, NB, signed an agreement to transport 750,000 MMBtu/day on the 850-mile Maritimes system, which extends to near Boston from the Sable Offshore Energy Project's production facilities offshore Nova Scotia.

Maritimes originally planned that its Phase IV expansion would include combined supply from the LNG terminals and would have required 146 miles of looping and a compressor station in Methuen, MA. However, the delay of Bear Head has reduced the required expansion facilities to the compressor station and only 1.7 miles of pipeline looping in Baileyville, ME.

Anadarko does hold an 18-month option to secure up to 350 MMcf/d of throughput capacity at Bear Head at competitive rates if U.S. Venture Energy eventually is successful in lining up LNG supply. U.S. Venture Energy is planning to move forward with construction of the terminal. However, it has not signed a replacement agreement for transportation capacity on the Maritimes pipeline system. A third proposed LNG import terminal that is being built in Goldboro, NS, by Keltic Petrochemicals fell outside the Maritimes' expansion timeline but may be a supplier by the end of the decade.

©Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2019 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus