Repsol SA has scrapped plans to export LNG from the Saint John import terminal in New Brunswick because of a lack of natural gas supplies and the costs to move it to the facility.

The company stated that it would shelve the plan to tap into European demand after a feasibility study confirmed that tolls for long-distance pipeline delivery to New Brunsswick on Canada’s east coast would be too high.

The company noted in a filing, approved by regulators last month to extend an export license, that the main hurdle would be securing feed gas supplies as offshore production in Eastern Canada has dried up. Pipeline capacity to deliver supply to the terminal, which currently has the capacity to import 7.4 million metric tons/year of liquefied natural gas, does not exist, it noted. Shipments to the terminal would require expansions on multiple linked pipelines.

The company said “even with an aggressive timeline, it would take a minimum of three years for the necessary approvals to be obtained and the facilities constructed,” based on conversations with pipeline operators.

Pipeline tolls and capacity additions prevent developing an east coast LNG terminal to export Western Canada gas, said a study by the Canadian Energy Research Institute. The first attempt to convert Saint John to export gas was dropped about seven years ago.

A wide gap in the Canadian pipeline grid would make Saint John LNG rely on roundabout deliveries across the eastern United States and north to New Brunswick. Pipelines from Alberta and British Columbia end in central Quebec, about 400 miles west of the Atlantic seaboard. 

No production has occurred in Atlantic Canada since offshore platforms closed in 2018, except small heating season flows from legacy land wells. New Brunswick, Nova Scotia and Quebec also banned hydraulic fracturing to tap shale gas for replacement supplies.