The economic recession and liquefied natural gas (LNG) market dynamics have caused the indefinite postponement of an LNG transshipment and storage terminal proposed by Newfoundland LNG Ltd. for Grassy Point on Placentia Bay on the southeast coast of Newfoundland, Canada.

“It is on hold. It’s only on hold due to the recessionary impact and, of course, due to the price of LNG right now,” Newfoundland LNG President Mark Turner told NGI Monday. “And also some of the suppliers have been slow [to come on-line] as well. We’re just going to wait and see what happens as we move forward.”

As originally conceived, the project was intended to provide transshipment and storage services for northeastern U.S. and Canadian LNG importers and providers. The facility would have provided LNG cargo transfer, short- and long-term storage of LNG, temporary vessel-based LNG storage and a lay-up site for in-transit LNG carriers.

Newfoundland LNG is a joint venture of North Atlantic Pipeline Partners LP and LNG Partners LLC. It filed plans for the project with federal and provincial regulators in late 2006 (see Daily GPI, Nov. 29, 2006). The project would include eight 160,000-cubic-meter storage tanks, three jetties with berthing facilities capable of mooring 265,000-cubic-meter LNG cargo ships, and a tugboat basin along one of North America’s deepest ice-free ports. It would not include LNG regasification facilities.

The project, which was intended to accommodate up to 400 vessels per year, was slated to begin construction in summer 2007, but Turner told NGI last year that construction was delayed and was expected to begin in late 2008 or early 2009 (see Daily GPI, April 30, 2008). The project received environmental approvals last summer (see Daily GPI, Aug. 12, 2008).

Turner said he had no idea of a timeline for a decision on the project. It could be scaled down from eight storage tanks to four. “There’s no big rush, but we are looking at downsizing,” he said, noting that he is confident the project could eventually move forward as he expects the price for LNG to strengthen. “I think it will have to,” he said. “LNG is a very good product. It’s a clean, efficient fuel. I do believe that it’s going to come back. My own guess, I’d say maybe a year and a half, two years until it comes back up to a level that we can do some business.”

Well before the Grassy Point project could come on-line, the LNG terminal being developed by Canaport LNG LP will have entered service in New Brunswick. The project — now more than 98% complete, according to its website — received its import and export licenses last year (see Daily GPI, Sept. 8, 2008). Canaport is a partnership of Spain’s Repsol YPF and Canada’s Irving Oil. At commissioning the terminal will have a sendout capacity of 1 Bcf/d with a peak capacity of 1.2 Bcf/d and could be expanded to 2 Bcf/d (see Daily GPI, Sept. 10, 2007).

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.