Spanish oil and gas giant Repsol SA has dropped its plan to ship liquefied natural gas (LNG) to Europe from a terminal in New Brunswick, citing high shipping costs.
Repsol was looking into the feasibility of expanding its Canaport import terminal in Saint John to handle exports. “But the company has deemed it too expensive to ship natural gas from fields in western Canada across the continent to port,” Bloomberg reports.
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“To reach the terminal, gas would have to be transported from thousands of kilometres (miles) away in western Canada, requiring new pipeline capacity” from project partner TC Energy, Reuters writes.
The notion of East Coast LNG exports “has been around for decades,” Bloomberg states, taking on new urgency last year when German Chancellor Olaf Scholz was scrambling for new supplies to replace gas from Russia. But even then, Germany made it clear that was looking for legitimately green supply sources, and ultimately green hydrogen, over a 20-year span, raising serious doubts about whether a new LNG export project would ever break even.
Bloomberg says Repsol’s Saint John LNG facility was seen as the best prospect for an East Coast export terminal, since the facility is already in place and could have skipped extensive regulatory review. But when Natural Resources Canada Minister Jonathan Wilkinson convened Repsol and TC Energy representatives last week to determine whether the project could proceed, Repsol declared it a no-go.
“Following a study carried out by the company, it was determined to not continue with the Saint John liquefaction project as the tolls associated to it made it uneconomical,” Saint John LNG spokesperson Michael Blackier told Bloomberg in an email.
The provincial government had “hoped an expansion of the Saint John terminal could provide a rationale for ending the moratorium on shale gas development in New Brunswick,” CBC says. “Gas from New Brunswick is a ‘possible solution’ for Europe, Premier Blaine Higgs said last spring, adding that it would be less expensive than gas shipped to a Saint John terminal over long distances via pipelines.”
But “it is up to individual proponents to ensure the economic viability of their proposed projects,” Wilkinson spokesperson Ian Cameron told media. “In the case of Saint John LNG, the project proponent has informed us that their evaluation concludes there is no business case, as the cost of transporting gas across the significant distances are too high.”
