Keltic Petrochemicals Inc. took an important step in the development of its planned liquefied natural gas (LNG) import terminal in Goldboro, NS, by signing an agreement with The Netherlands-based Petroplus International BV for management and operation of the proposed import terminal, including LNG supply procurement.

The two companies announced the signing of a memorandum of understanding to advance development of the project, which has been under consideration for five years and is expected to break ground this summer. As part of the deal, Petroplus will operate all of the LNG and power generation activities on a stand-alone basis through a new subsidiary called “4Gas.”

The deal allows Keltic to focus entirely on using the LNG as a feedstock for its petrochemical operations. Keltic will use the ethane and propane in the regasified LNG to create ethylene, propylene and polypropylene and polyethylene, the most widely used of all the plastics.

“They will be the managers and operators [of the LNG project]. We’ll just take the liquids out of the gas,” said Keltic Petrochemicals President Kevin Dunn in an interview with NGI. He said Keltic is confident that Petroplus can line up LNG supply for the project because it already has established relationships with BP and others for supplying its two other proposed LNG import terminals in Europe.

Dunn said Keltic plans to submit its final regulatory documents on the environmental assessment for the terminal in the first week of January. The government has 100 days to process the documents and hand down a decision. “We expect to break ground sometime in June. We have a lot of site work to do.”

The Nova Scotia project will include three LNG storage tanks with a gross capacity of 160,000 cubic meters each. Sendout capacity will total 1 Bcf/d. The site has sufficient space and utilities available to add three additional tanks and increase total sendout capacity to 2 Bcf/d. The Goldboro site will be designed to receive LNG carriers with capacities ranging from 75,000 cubic meters to 250,000 cubic meters.

The project’s regasification terminal is to be located adjacent to the Maritimes and Northeast Pipeline intake station at the Sable Island Gas Plant at Goldboro. Dunn said the company expects to use about 34-40% of the LNG sendout capacity for its petrochemical operations. The remainder (up to 600 MMcf/d) will be used to fuel an onsite cogeneration plant or sent into the wholesale gas market via the Maritimes pipeline system.

4Gas also is building LNG import terminals in Milford Haven, Wales and in Rotterdam, The Netherlands. The U.K. project, Dragon LNG, is expected to be operational in 2007. The projects in Nova Scotia and The Netherlands, including Keltic LNG and LionGas, respectively, are expected to be operational in 2009.

The Carlyle Group and Riverstone Holdings LLC will be major shareholders in 4Gas through their investment in RIVR Acquisition B.V., which is also the holding company of Petroplus. 4Gas will be managed by CEO Paul van Poecke. Petroplus is the owner of refineries in Antwerp, Belgium; Cressier, Switzerland; and Teesside, United Kingdom, with a total capacity of 240,000 bbl/d.

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