Repsol abandons Canadian LNG export terminal expansion plan due to high transportation costs
Madrid. Spanish energy giant Repsol SA has abandoned plans to expand a liquefied natural gas terminal on Canada’s east coast, saying the cost of transporting the gas was too high.
Repsol conducted a feasibility study to expand its plant near Saint John, New Brunswick, to allow gas to be exported to Europe.
It is currently the import terminal that brings the fuel to eastern North American markets, with the capacity to heat 5 million homes. But it’s too expensive for the company to ship natural gas from western Canadian fields across the continent to the port.
The project will also require new liquefaction plants and upgrades to an already busy pipeline network with partner TC Energy Corp.
“Following a study conducted by the company, the decision was made not to move forward with the St. John liquefaction project because the tolls associated with it would be uneconomic,” St. John LNG spokesman Michael Blackier said yesterday. Manages the terminal.
The idea of building an export terminal on Canada’s Atlantic coast has been around for decades, but after Russia invaded Ukraine last year and raised energy prices across the country, Europe was given new urgency.
Germany was under particular pressure, with Chancellor Olaf Scholz having to find new sources of energy to replace Russian supplies. He urged Prime Minister Justin Trudeau to consider all options, including a summit of seven in the Bavarian Alps in June and a visit to Canada in August.
Canadian Natural Resources Minister Jonathan Wilkinson called a meeting with Repsol and TC Energy earlier this week.
Although there are other plans in the field for the eastern terminal, Repsol informed the group that the project is no longer viable. Minister Wilkinson, during the meeting, once again supported the idea that the terminal could send gas to Europe within three years.
Canadian President Trudeau has also said his government will help speed the project through the regulatory process, but only if the companies involved decide there is a business plan to build it. Wilkinson spokesman Ian Cameron said Canada is still focused on global energy security and highlighted the recent approval of a West Coast export terminal called Cedar LNG.
“It is the responsibility of individual proponents to ensure the economic viability of their proposed projects,” Cameron said. “For St John LNG, the project initiator informed us that their assessment concludes that there is no business case as the cost of transporting gas over significant distances is too high.”
Repsol is a global multi-energy company operating in 37 countries to provide sustainable energy products and services. Innovation, efficiency and respect for Repsol create value in a sustainable way for the progress of society.
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