Blog: LNG exports from Eastern Canada?

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The federal government, which in February vetoed the planned Energie Saguenay LNG export project in Quebec, has suddenly decided that LNG exports in the Maritime provinces could be acceptable.

Thus we have federal officials talking with two potential LNG exporters.

Ottawa is looking at Spanish company Repsol’s LNG import facility in New Brunswick, for one, with the idea that it could be re-engineered to become an export facility.

Natural Resources Minister Jonathan Wilkinson says that if Repsol indeed decided to convert the terminal, “you likely could have a facility that would be producing within three to four years.”

Repsol has remained silent on this.

Officials from Wilkinson’s office have also chatted with Pieridae Energy, about its proposed Goldboro LNG facility in Nova Scotia.

“We are looking at Goldboro and Repsol’s projects and discussing these with the proponents and with German and European counterparts,” said Wilkinson.

There has been no federal mention of talks with Buckeye Partners, which has an agreement to purchase Bear Head Energy and its long-proposed LNG project in Nova Scotia.

There’s another east-coast project that could eventually come into play, the LNG Newfoundland & Labrador Limited project, which would process natural gas from the offshore Jeanne d’Arc Basin. (The First Nations Major Projects Coalition and the Miawpukek First Nation are working together towards increased Indigenous equity participation in this project.)

At this point, Canada’s efforts to increase LNG exports to Europe are limited to selling our gas to U.S. operators who would convert it to LNG and export it to Europe.

If Ottawa’s ideas all work out, though, we could at some point be processing Western Canadian natural gas in the Maritimes, and sending it to a gas-hungry Europe that is trying to stop importing Russian gas.

But there’s a catch: Wilkinson says Canada would be looking for any new LNG facility to use a low-emission process for gas.

But there are no federal standards or numbers yet to enable anyone to know what to expect.

And any eastern LNG plant would also face hefty competition from the U.S., which already has seven major LNG export facilities, and four more under construction. Another 18 have been approved but are not yet being built. And two more applications are pending.

There would also be competition from Qatar, the LNG giant that has already doubled its exports in the last year — and is working speedily towards doubling its total LNG export capacity.

The stink-eye given by the federal cabinet in February to the $10.6-billion Energie Saguenay LNG project followed, by seven months, the rejection of the project by the Quebec government. Both cited climate grounds.

Federal Environment Minister Steven Guilbeault says Energie Saguenay is welcome to submit a new proposal. There has been no sign of one.

And there’s a second catch decreed by Ottawa: Wilkinson says the feds would also  expect that any new LNG plant in the east be capable of transitioning to exporting hydrogen later on.

Ottawa released its “hydrogen strategy” in 2020, happily declaring that “Canada is uniquely positioned to become a large-scale exporter of hydrogen.” The federal strategy document added: “The time is now.”

But there hasn’t been much action. Hydrogen has yet to catch on in the way Ottawa’s strategy envisages. Becoming a large-scale exporter of hydrogen would call for production plants and infrastructure that we simply don’t yet have.

True, we have the world’s largest green-hydrogen plant in Quebec, from Air Liquide. But it is notably limited, producing only 3,000 tonnes a year, destined for industrial users and transportation and not for export to overseas markets.

From the federal hydrogen strategy: “As an energy rich nation with significant clean hydrogen production capacity, established international trade partnerships, and strategic infrastructure assets such as deep water ports and established pipeline networks, Canada is positioned to become top global supplier of clean hydrogen.

“A 2019 BC study shows an export potential of $15 billion by 2050 from that province alone. Another recent study indicated that hydrogen exports could reach ~$50 billion by 2050, doubling the economic potential of the domestic market projected for Canada in that same timeframe. With import countries looking to decarbonize their energy systems, hydrogen could contribute to a significant portion of the energy export market share in the coming decades.”

Alberta has an ambitious hydrogen roadmap: “Alberta is already the largest hydrogen producer in Canada. We have all the resources, expertise, and technology needed to quickly become a global supplier of clean, low-cost hydrogen.”

BC is already a hub for limited production of hydrogen fuel cells for transportation. Ballard Power, for one, produces such hydrogen fuel cells, and has a joint venture agreement with engine-maker Weichai Power in China, where the central government has set a target of putting one million fuel-cell vehicles on the road by middle of the next decade.

The federal hydrogen strategy noted that Canada has “established pipeline networks.” But while fans of hydrogen say it can be moved by pipelines that now carry natural gas, it’s not that simple.

First, we still need the gas pipelines to move our gas, for domestic use and for potential exports.

And, second, a US authority notes “the potential for hydrogen to embrittle the steel and welds” in current pipelines.  “Converting existing natural gas pipelines to deliver pure hydrogen may require  . . . substantial modifications.”

Ottawa’s hydrogen strategy document included this headline: “A Call to Action.”

But, as with LNG exports from the east, we have yet to see federal enthusiasm turn into federal enthusi-action.

The Repsol LNG plant in Saint John NB

(Posted here 02 June 2022)

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