An Australian company is acquiring a mothballed liquefied natural gas (LNG) project on Cape Breton Island, Nova Scotia, which includes an industrial-zoned site with project rights, approvals, storage tank foundations and civil works.
"For us it was a property that was sitting idle for a number of years. We are just extremely pleased there is very, very keen interest to purchase the site and also develop it," said Steve Sampson, Warden of Richmond County.
"It is a great benefit and we hope to see up to 600 construction jobs in that phase of the project and a number of jobs will be retained after construction is completed."
Sampson made this comment after Liquefied Natural Gas Limited (LNGL) of Australia announced its intention to acquire Bear Head LNG Corporation from a subsidiary of Anadarko Petroleum Corporation for US$11 million.
"It is crucial to the entire Strait area that the Bear Head site be developed," said Sampson.
"This is a world-class site located on deep, ice-free water. We feel its development could be a catalyst for additional projects in our area."
The Bear Head LNG Project is a 255-acre site comprising industrial-zoned land (180 acres) and deep-water acreage (75 acres), located in Richmond County.
The land has been cleared and a majority of the site works have been completed and roads constructed. In addition, the foundations are in place for two 180,000-cubic-metre LNG tanks.
"These people are very serious about moving forward in a timely fashion," said Sampson. "We hope that over the course of the next few weeks the sale will be completed. And, after that, they have some key players that will be here on a more permanent basis, working through all the hoops with permits and hoping to have all that in place by early 2015."
The close of the sale is expected on or before Aug. 31, 2014.
LNGL is also in discussions with gas transmission companies to transport natural gas to Bear Head and is proposing to initially develop the site for a 4 million tonne per annum (mtpa) LNG export terminal.
"This is a significant transaction for LNG Limited and is consistent with our strategic plan to selectively secure sites that meet our criteria and develop a strong North American presence," said LNGL’s managing director Maurice Brand in a press release.
"We are particularly keen to secure opportunities where we can either replicate Magnolia LNG or substantially use all the company’s technical, engineering, technology and development expertise."
LNGL is planning to integrate Bear Head project’s existing civil works and detailed engineering work with the development, technical and engineering work already completed for the US$2.2 billion Magnolia LNG Project near Lake Charles, La.
The company signed an Engineering, Procurement and Construction (EPC) Contract Term Sheet for the project with SK E&C USA, Inc on July 10 and has started drafting the Lump Sum Turn Key EPC Contract.
The Magnolia LNG Project involves the construction of an 8 mtpa LNG export project, which will be developed in two phases. The initial phase will have two LNG trains, each of 2 mtpa LNG design capacity, two 160,000 m3 storage tanks, jetty and ship loading facility and related infrastructure.
LNGL has already developed a gas supply plan and a transportation plan for the Bear’s Head project, and has interest from several parties to enter into tolling agreements, which adopt the same business model as the Magnolia LNG Project.
"We are looking forward to working with local governments in developing this project that will have significant local economic benefits," said Brand in the press release.
"We have been undertaking due diligence on Bear Head since October 2013, so we are confident that we can hit the ground running and obtain all permits and approvals by mid‐2015, and during 2016, make a final investment decision."
Anadarko Petroleum Corporation started construction of the LNG terminal at Bear Head in October 2004, which was expected to be complete by late 2007.
However, Anadarko halted construction work in March 2006, when the company failed to find a supply of natural gas to import to the terminal.
In August 2004, Anadarko acquired Access Northeast Energy Inc. (ANEI), a private Canadian company whose sole project was the development of the proposed LNG receiving terminal at Bear Head, Point Tupper on Cape Breton Island.
ANEI secured approval of the environmental assessment from both federal and provincial governments, which was needed to proceed with construction of the terminal.
There are two other LNG export sites proposed for Nova Scotia’s eastern coast.
Pieridae Energy Canada Ltd. was issued an environmental assessment approval by the Nova Scotia government on March 21, 2014 for proposed Goldboro LNG project, which includes a processing plant and facilities for the storage and export of LNG, including a marine jetty.
Last month, the Nova Scotia government announced that India-based H-Energy is developing plans for its proposed LNG plant in Melford, Guysborough County.
An Australian firm has purchased the Bear Head LNG Project on Cape Breton Island.
Photo: Bear Head LNG Project"
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