More than a year after an eager East Coast provincial government named Canada’s lone liquefied natural gas (LNG) import terminal as a prime candidate to switch to revenue-generating exports, the plant refuses to be rushed into making the change.

The Nova Scotia energy department identified Canaport LNG as a logical Atlantic Canadian entry into overseas trade in a report that it commissioned by ICF Consulting Canada Inc. of Toronto and circulated widely early in 2013. The idea regained a flurry of attention in recent days as a potentially quick way to carry out political wishes in Ottawa and Washington, DC, to punish Russian behavior in the Ukraine by creating fresh competition against Siberian gas exports to Western Europe.

Canaport’s owners — Spain’s Repsol YPF SA as 75% senior partner, and Irving Oil Ltd. with 25% — greeted speculation that they are at last acting on the idea with stony silence, refusing comment and letting the regulatory record speak for itself. The record to date confirms that converting the plant, a six-year-old addition to Irving’s oil refinery in its hometown St. John, NB, is an option but sets no conversion date, capacity targets or projected costs.

A rumored new addition to the record, an application to Ottawa’s Canadian Environmental Assessment Agency (CEAA), remains in a preliminary, confidential screening stage (see Daily GPI, Nov. 8, 2013). Even when allowed into the public record, after acceptance as completed first drafts, CEAA applications dwell almost exclusively on projects’ environmental effects and do not venture into their economic aspects, such as a prediction that the Canaport conversion could cost US$2 billion.

On the known record, Canaport LNG received approval from the New Brunswick environment department to reverse its flows of up to 1.2 Bcf/d on Sept. 9, 2013. The provincial permit is valid until September 2016 and allows 120 tanker movements annually into or out of the harbor at St. John.

Marketing of at least small test cargoes in Europe may have begun as soon as Canaport received its provincial environmental approval. The National Energy Board (NEB) granted Canaport a two-year license to export gas on April 29, 2013. Disclosures of the gas trade under short-term NEB permits are limited to aggregate industry totals. The early 2013 report on potential East Coast energy trade evolution, “Future of Natural Gas Supply for Nova Scotia,” explored an array of possibilities. The Nova Scotia and New Brunswick governments are both avid supporters of growing their province’s notoriously quiet economies.

Along with Canaport, the 14-year-old Maritimes & Northeast Pipeline (MNP) plays a central role in the armchair economic generals’ hopes for the two provinces. Traffic on MNP changed radically since the line was built in 1999 for deliveries from the Sable Offshore Energy Project (SOEP) to Nova Scotia, New Brunswick and the New England states, the 134-page survey of market conditions said.

Production from SOEP has fallen to less than 150 MMcf/d from 550 MMcf/d due to natural depletion of the wells offshore Nova Scotia. Encana Corp.’s nearby, new Deep Panuke production platform is providing an initial burst of up to 300 MMcf/d, but the volume is expected to fall off swiftly as low gas prices prevent additional drilling to compensate for rapid drainage of the conventional reservoir, ICF said. Deep Panuke began full operations in December (see Daily GPI, May 13).

Repsol holds about three-quarters of MNP’s delivery capacity. Canaport is linked to MNP by a pipeline from its site at the Irving refinery in the harbor at St. John. MNP and the Canaport connection have potential for reversal into an export network for blending production from the United States into offshore Canadian gas output into a united overseas export stream, said the consultants’ encouraging report to the Nova Scotia government.

The strategy suggested by the consultants has taken on formal shape in an application for a long NEB gas export license by Goldboro LNG, a proposal for a rival to Canaport on the Nova Scotia coast near the provincial capital of Halifax.

Goldboro, named after its coastal site, is promoting a plan that calls for U.S. gas arriving via MNP to fill up to 1 Bcf/d, or 70% of its proposed capacity of 1.4 Bcf/d. The Nova Scotia terminal proposal stands out in the Canadian lineup as having secured a customer for about half its total planned LNG exports: E.ON Global Commodities SE, trading arm of a German gas and power conglomerate.