Chevron Corp. said Monday it will work with Irving Oil Ltd. to study the costs and other factors involved in building a C$500 million (US$320 million) liquefied natural gas (LNG) plant in Saint John, NB. Irving Oil, a family-owned company with energy interests in eastern Canada, announced two months ago that it was considering construction of an LNG plant at its ice-free Canaport deepwater facility, where it has operated an oil terminal since 1970 (see Daily GPI, July 26).

If an LNG facility were added to the port, it would give Canaport, which has a current total tank capacity of 12.5 MMbbl, the ability to receive LNG cargoes and vaporize the LNG for send-out over the pipeline grid. A Canaport LNG facility could transport LNG from Canada’s East Coast and turn it into natural gas for U.S. markets among other destinations. The Canaport facility now transports crude oil from Venezuela, Brazil, the North Sea and West Africa to use at its Saint John refinery, the largest in Canada.

Chevron will join Irving in a feasibility study to consider site, plant and pier design along with North American marketing and supply operations. Chevron, which is merging with Texaco to form ChevronTexaco, has several operations already in Canada, including its operations in the Hibernia Field offshore Newfoundland, with recoverable reserves of 650 million bbl. It also operates a refinery and is the leading marketer of transportation fuels with 200 outlets in British Columbia.

“Chevron and Irving Oil have a long history of working together on the East Coast, and we’re pleased to continue our relationship with them in a project that holds such potential,” said Jim Simpson, president of Chevron Canada Resources. “Chevron owns several large undeveloped gas reserves along the Atlantic Basin, which could be a potential long-term supply of LNG products.”

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