An Atlantic Canada utility has challenged the plan by Repsol SA to convert its New Brunswick arm, Saint John LNG Development Co. (SJLNG), from an import site into an export terminal for energy-starved Europe.

Nova Scotia gas distributor Eastward Energy Inc. has urged the Canada Energy Regulator (CER) to require an east coast market review before granting SJLNG a six-year export license extension to design, win approval and build the proposed conversion.

Last year, Repsol became the sole owner of the Canaport liquefied natural import terminal at Saint John in New Brunswick. The facility then was renamed Saint John LNG.

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Eastward management pointed to the United States for examples of supply disruptions liable to result from an SJLNG decision as reports were completed in 2015 to support the current license remain valid.

“This could lead to a similar issue seen in Texas and other Midcontinent states” in February 2021’s Winter Uri storm, executives said. They cited the “supply side constraints due to a polar vortex,” which “led to customer outages and spikes,” with soaring spot prices.

Eastward executives also noted a written appeal last month to President Biden by New England distributor Eversource Energy calling for supply protection this winter.

“Consumers in New England are already experiencing skyrocketing electricity and gas costs given supply constraints and global price pressures following the Russian invasion of Ukraine,” Eversource CEO Joseph Nolen stated in the letter.

“Regional gas pricing is based on Algonquin Citygate,” which is in New England and “is often the highest-priced natural gas market in North America,” management said. “During significant cold weather events, this market has traded at a spot price of US$100/GJ or more. with SJLNG imports available to the market.”

The company said since 2015, Atlantic Canada has become an importer of U.S. and Western Canadian natural gas via the Maritimes & Northeast Pipeline. Offshore production ended in 2018, and New Brunswick, Nova Scotia and Quebec banned hydraulic fracturing to replace wells.

While the CER did not immediately respond to Eastward’s request for an updated East Coast market review, regulators have questioned the SJLNG decision.

“Repsol is a participant in the global energy market and the fact it is evaluating adding liquefaction capability to the SJLNG terminal clearly demonstrates that market participants respond to market signals and develop projects to meet supply and demand needs,” CER said.

“This very project provides clear evidence that the market is indeed working,…

“SJLNG does not see any constraints that will impact the free functioning of the markets should the requested extension be granted. Supply-demand market forces will continue to ensure development occurs, as needed.”

SJLNG is aiming for initial exports of 300 MMcf/d, or only 40% of the targeted volumes that were in a previous version of the project. Deliveries could begin around May 2032, which would allow for planning, regulatory approval and construction stages.