Repsol scraps bid to ship Canadian gas to Europe amid rising costs Ship’s crew

By Brian Platt (Bloomberg) —

Spanish energy company Repsol SA has scrapped the idea of ​​expanding a liquefied natural gas terminal on Canada’s east coast because the cost of transporting gas there is too high.

Repsol conducted a feasibility study to expand its facility near Saint John, New Brunswick to export gas to Europe. It is currently an import terminal supplying fuel to eastern North American markets with enough capacity to heat 5 million homes.

However, the company felt it was too expensive to ship natural gas from fields in western Canada across the continent to the port. The project would also include new liquefaction plants and the upgrade of an already stretched pipeline network with partner TC Energy Corp.

“Following a study conducted by the company, it was determined not to proceed with the Saint John liquefaction project as the associated tolls made it uneconomical,” said Michael Blackier, a spokesman for Saint John LNG, the Repsol-owned company that operates the terminal , said via email on Thursday.

The idea of ​​building an export terminal on Canada’s Atlantic coast has been around for decades, but last year it took on new urgency after Russia invaded Ukraine and drove up energy prices across Europe.

Germany was under particular strain as Chancellor Olaf Scholz had to find new sources of energy to replace Russian supplies. He urged Prime Minister Justin Trudeau to explore all options, including at a G7 summit in the Bavarian Alps in June and a visit to Canada in August.

Jonathan Wilkinson, Canada’s natural resources minister, called a meeting with Repsol and TC Energy earlier this week to determine if the project still had a chance, according to people familiar with the matter. Repsol told the group it was not viable, people said.

While there are numerous other proposals for an eastern terminal, the Repsol project was seen as having the greatest potential as it was an extension of an existing facility that would not require the extensive regulatory process of building from the ground up.

Wilkinson supported the idea, once telling Bloomberg that the terminal could deliver gas to Europe within three years. Trudeau also said his government would help expedite the project through the regulatory process — but only if the companies involved decided there was a business case for construction.

Ian Cameron, spokesman for Wilkinson, said Canada is still focused on global energy security, citing the recent approval of a West Coast export terminal known as Cedar LNG.

“It is up to the individual proponents to ensure the commercial viability of their proposed projects,” Cameron said via email. “In the case of Saint John LNG, the project proponent has informed us that their assessment concludes that there is no business case as the cost of transporting the gas over the significant distances is prohibitive.”

A spokesman for TC Energy referred questions to Repsol.

© 2023 Bloomberg LP

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