Some additional comments from MB in this Chronicle Herald editorial, which again demonstrates the progress BH has made esp. when considering other Canadian projects.
Preparing for the LNG rebound
Even if the oil and gas markets sort themselves out with stable prices and viable supply, it’s likely to be the 2020s before any of the four proponents of shipping LNG from Nova Scotia will be serving global markets.
But two Nova Scotia proponents, Bear Head LNG of Point Tupper (owned by Australia’s Liquified Natural Gas Ltd.) and the Goldboro facility proposed by Pieridae Energy Canada of Calgary,
have been moving ahead smartly with Canadian and U.S. regulatory approvals, getting ready for LNG to resume long-term growth in world markets.
And this week the Bear Head group announced it is acquiring an additional 72 acres of Crown land, through Nova Scotia Business Inc, at its Strait of Canso site.
That brings Bear Head’s footprint to 327 acres. The company says this will enable it to increase LNG capacity from its original plan of eight million tonnes per annum to as much as 12 million. It has National Energy Board approval to reach this higher export capacity by 2024.
Bear Head president Maurice Brand told The Chronicle Herald editorial board that the land purchase “is an important step because it allows us to do our planning and to accommodate a future growth opportunity.” It would allow one or two additional gas trains (compression and condensing facilities) at the site.
The other major step forward, he says, was getting U.S. approval to export U.S. gas to two types of nation — those that have free-trade agreements with the U.S. and those that don’t — and to move Canadian gas through the U.S. to Nova Scotia.
These approvals allow Bear Head to move forward with identifying potential gas supplies in the U.S. and Western Canada as well as from the Nova Scotia offshore.
The company will also begin a UARB hearing in May on a proposed Bear Paw pipeline to the offshore gas landfall at Goldboro.
Bear Head has not yet made a decision on construction.
“This year is all about getting approvals, getting the gas path sorted out and finishing the front-end engineering,” says Mr. Brand.
But he says the quick regulatory turnarounds have been “superb” and argues that Bear Head is “brilliantly positioned” to take advantage of a market rebound in 2021-22 by offering a low-cost process and a modular plant design.
The company is pinning its confidence on its proprietary OSMR (Optimized Single Mixed Refrigerant) process and a modular plant design that Bear Head shares with a sister facility being developed in Lake Charles, Louisiana.
“Because of our capital costs, which are about half the capex of traditional LNG projects, we are viable to come into this project with just two trains,” says Mr. Brand.
“Each train is nominally around two million tonnes, but because of ambient conditions here (a cooler climate that assists liquefaction), which are favourable for LNG plants, we can actually produce closer to 2.5 million tonnes per train.”
"Five million tonnes is what we need for our project to commence, whereas other projects would typically be looking at 8-10 million tonnes on their economics. So even in this period of low world oil-price environment, we can still see an opportunity to move this project forward over the next one to two years.”
The Bear Head president says the company is confident in the projection that LNG demand will strengthen in 2021-22, which, with a four-year build, “
really pushes us in 2017-18 to press the go button.” The most likely markets are Europe and South America, which is actually a shorter sail from Bear Head than from the U.S. Gulf Coast.
Of course, energy markets are complex and volatile and no project is ever certain.
But persistence, regulatory efficiency and technical innovation are all advantages and it’s good to see them at play in Nova Scotia’s LNG prospects.
http://thechronicleherald.ca/editorials/1352810-editorial-preparing-for-lng-rebound
