Lately, there’s been a lot of talk regarding LNG exports from the United States to Europe. This new resource may become an alternative to the natural gas that’s currently supplied to Europe by Russian giant, Gazprom (OGZPY).
But with the Obama administration (more specifically, the Federal Energy Regulatory Commission) dragging its heels with the approval of LNG projects, the prospect of U.S. LNG flowing to Europe grows more and more dim. I discussed the U.S. LNG project delays in a recent article.
This isn’t to say that American gas won’t be exported to Europe. Instead, it may be coming from our northern neighbors, Canada.
The Canadian government is very serious about becoming a major gas supplier to Europe. It’s fully behind the building of multi-billion-dollar LNG plants on its Atlantic Coast to enable natural gas to be transported via tankers to Europe.
With this positive background, several major projects are looking to proceed in eastern Canada.
Project #1: Repsol’s $2-Billion Proposal
Repsol, S.A. (REPYY) is looking to build a $2-billion LNG export facility at its existing Canaport facility in Saint John, New Brunswick. This plant is an underused LNG import facility on which Repsol has already undergone a $1.3-billion write-down.
In effect, Repsol is following the same game plan that U.S. LNG export pioneer, Cheniere Energy (LNG), uses… by converting an existing LNG import plant into an export facility.
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The company has filed a complete description of its plans with the Canadian Environmental Assessment Agency. But plans are not yet public.
Project #2: Husky’s Early-Stage Mission
Another company contemplating an LNG export project on Canada’s East Coast is Husky Energy (HSE.TO).
The company would like to sell the natural gas that it finds from its vast acreage holdings in Canada’s Atlantic Coast.
However, this project is still in the very early planning stage.
Project #3: Pieridae Finds a Huge Buyer
The Goldboro LNG Project in Nova Scotia – proposed by privately owned Pieridae Energy – is much farther along.
Last June, Pieridae signed up the major German utility company, E.ON SE (EONGY), as a customer for its LNG. It’ll sell E.ON 5 million metric tons (mmt) per year of LNG (out of the 10 mmt that it’ll produce) for 20 years.
In March, Pieridae received environmental assessment approval for its project from the Minister of Environment for the Province of Nova Scotia.
The project is expected to be up and running before the end of the decade.
Canada and Europe’s LNG Future
With government backing, Canadian LNG projects on the East Coast could end up beating U.S. LNG projects to the European market.
And it’ll be a large market, too.
By the end of the decade, about half of Europe’s natural gas demand will have to be met by outside sources. That leaves it with two choices: turning to Russia or looking at LNG imports from overseas.
With Europeans tired of shelling out about $100 million per day for Russian energy, I wouldn’t be surprised if they chose the latter.
And “the chase” continues,