Undeterred after two prior attempts to site liquefied natural gas (LNG) import terminals failed because of local opposition, TransCanada Corp. said it has teamed up with Petro-Canada to develop an LNG facility, named Cacouna Energy, in Gros Cacouna, PQ, about nine miles northeast of Riviere-du-Loup. The proposed terminal would have average sendout capacity of 500 MMcf/d.

“Petro-Canada already has a large and growing business presence in Quebec, with a major expansion under way at our Montreal refinery,” said Petro-Canada CEO Ron Brenneman. “We look forward to increasing our investment in Quebec with the development of the Cacouna Energy LNG facility in partnership with TransCanada. Having North American LNG capacity will strengthen Petro-Canada’s ability to continue to be a major, long-term supplier and marketer of natural gas in North America.”

TransCanada and Petro-Canada will equally share the costs to construct the LNG receiving, storage and regasification facility on Gros Cacouna Island, adjacent to the existing harbor. TransCanada will operate the facility, while Petro-Canada will supply the LNG. The estimated cost of construction is C$660 million. The project would include a pipeline to the TransQuebec and Maritimes pipeline system in Quebec City. The regasified LNG ultimately would be delivered to Quebec markets and markets in the Northeastern United States.

Before construction of the facility can begin, the proposed terminal must receive regulatory approval to proceed from federal, provincial and municipal governments. The regulatory approval process is expected to take two years. Provided the necessary approvals are received, the facility is expected to be in service toward the end of the decade.

This is TransCanada’s third attempt — its first in Canada — at finding a location for an LNG import terminal. Two prior Maine sites in Harpswell and in Hope Island were rejected by local authorities. TransCanada and ConocoPhillips planned to build the Fairwinds LNG project in Harpswell but it was canceled after town residents voted not to lease a former U.S. Navy Fuel Depot site to build the terminal. The town is located 15 miles northwest of Portland.

The two companies then turned to Hope Island but members of the Cumberland, ME, council abruptly called off a scheduled referendum vote on the project in May, saying it would be better if a regional approach was taken toward LNG, involving state and federal officials. Some council members apparently didn’t believe the privately owned island, which is zoned residential and would require a special contract zone for an LNG terminal to be sited there, was the appropriate location. A number of residents also complained that an LNG terminal would be a target for terrorists, sully the environment and possibly disrupt the livelihood of lobstermen.

However, TransCanada repeatedly said it would continue its search for a location in Maine, Atlantic Canada or even possibly the Pacific Northwest. It believes the Cacouna project is in an ideal spot. Petro-Canada has planned an LNG terminal for the location since the early 1980s.

Originally called the Arctic Pilot project, the terminal was to receive LNG from a liquefaction plant on Melville Island in the Northwest Territories. In the early 1980s, the Quebec government ruled that the import terminal would have no adverse environmental impact. Low gas prices and abundant gas production from western Canada made it uneconomic, however.

“We may get some opposition, but right now the tendency is to agree that this is a good location and people are happy with our decision,” said Andrew Pelletier, spokesman for Petro-Canada. “Cacouna is a small place about 12 kilometers northeast of Riviere-du-Loup, which has a population of about 32,000 people. This area around the terminal location has about 2,000 people. It’s very scenic, very picturesque. Yes there are some challenges from an environmental perspective because it is quite a beautiful area. And we will have to work with people regarding the traffic on the Saint Lawrence and environmental issues regarding the whales, birds and other animals, but we feel this is doable and feasible.”

Pelletier also said Petro-Canada and TransCanada feel they have a better site than a competing Quebec project proposed by Enbridge, Gaz de France and Gaz Metro. The competing Rabaska LNG project would be located in Ville Guay or Beaumont, Quebec.

“We think we have a good project,” said Pelletier. “We think we have the right location for it, and I know the other folks are having a few more problems with their location, which is just outside of Quebec City and is in a higher density population area.”

The Cacouna Energy project will be the sixth proposed LNG terminal in Atlantic Canada and the eighth Canadian terminal that has been announced. The other Atlantic Canadian terminals include Access Northeast Energy’s (Anadarko) Bear Head LNG project in Point Tupper, NS; Irving Oil’s Canaport LNG project in St. John, NB; Keltic Petrochemicals’ Keltic LNG project in Goldboro, NS; Statia Terminals’ proposed Point Tupper, NS, project; and the Rabaska project (see NGI‘s August 2004 special report on North American LNG Import Terminals).

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