The National Energy Board has been busy issuing approvals for proposed liquefied natural gas export projects in Nova Scotia.
Last week, the energy sector regulator approved the application from Bear Head LNG to export LNG from its project site on the Strait of Canso. It also approved an application by Pieridae Energy (Canada) Ltd. to both import natural gas from the United States and export LNG from its project site in Goldboro, Nova Scotia.
Australian-based Bear Head LNG’s export licence gives it the right to export up to eight million tonnes of LNG per year, starting in 2019, from the terminal it wants to build on the southern coast of Cape Breton Island.
The company also has the option to increase production to 12 million tonnes per year by 2024. The NEB granted Bear Head LNG a 25-year licence to export LNG.
As for Calgary-based Pieridae Energy, it received 20-year licences both to import natural gas from the U.S. and to export it from Canada. Pieridae Energy president and CEO Alfred Sorensen was pretty pleased with the NEB’s decision.
“We’re happy to have achieved another significant milestone for the Goldboro LNG development. We will continue to work with the National Energy Board and project regulators as we advance this project. We’re also on track to complete our supply acquisition this year, and each step brings us closer to our final investment decision,” Sorensen said in a statement.
Obviously, getting these licences is good news for Pieridae Energy and Bear Head LNG – you can’t export LNG if you don’t have approval to get the gas from suppliers (like U.S. shale gas producers) nor to export it to customers.
But there’s a lot of heavy lifting to be done before shovels are being driven into the ground at these two sites.
As Sorensen mentions in the statement above, enough natural gas has to be secured to supply customers for the licence period and there’s not enough local supply available currently to fill these two projects needs. That’s why both projects have gotten approval from U.S. regulators to import natural gas from the Yanks.
(On that topic, for a sobering view on where U.S. shale gas production and global LNG prices are going, read this recent post by Arthur Berman, who spoke at the NOIA 2015 oil and gas conference held in St. John’s this summer.)
The two companies also must find enough pipeline capacity to get the gas they need to its export terminals. Then there is the matter of finding the billions of dollars it will take to build each project (Pieridae’s Goldboro LNG project, for example, is expected to cost around $8 billion.)
These are some significant milestones that neither company has achieved yet. I’m not saying Pieridae Energy and Bear Head LNG won’t achieve them, but to paraphrase poet Robert Frost – they both have miles to go before they sleep.