Construction Continues on Canada's First Liquefied Natural Gas Import Terminal

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Researched by Industrial Info Resources( Sugar Land, Texas)--Construction is progressing on Canaport LNG's $750 million liquefied natural gas import terminal in St. John, New Brunswick. Canaport LNG, a limited partnership between Irving Oil Limited (St. John, New Brunswick) and Repsol YPF S.A. (NYSE:REP) (Madrid, Spain) in which Irving Oil owns 25% and Repsol owns the remaining 75%. Canaport LNG will be the first LNG re-gasification plant in Canada that will send out natural gas to both Canadian and U.S. markets. The terminal will unload natural gas in a liquid form, store it and then convert it to a gaseous state for consumption in the region.

Canaport LNG began tree clearing and site leveling in mid-2005. Terminal construction began in summer 2006 and is expected to be complete and operational by the end of 2008. Both of the 160,000-cubic-meter cryogenic tanks have been erected, and most of the offshore facilities have been completed. The terminal will be connected to Maritimes Natural Gas Pipeline System by way of dual 7-mile, 24-inch pipelines. The terminal will have the capacity to re-gasify 1 billion cubic feet (28 million cubic meters) per day of natural gas, and the pipeline will have a capacity to deliver 750 MMSCFD. The offshore facilities were designed to accommodate LNG carriers of up to 200,000 cubic meters in capacity. Canaport LNG will be able to supply 20% of the natural gas needs of the northeast U.S. as well as Canada's needs.

Foster Wheeler Incorporated (NASDAQ:FWLT) (Clinton, New Jersey) is providing overall project management services. The onshore engineering, procurement and construction (EPC) contract was awarded to SNC-CENMC, G.P., a partnership between SNC-Lavalin (TSX: SNC) (Montreal, Quebec) and Saipem S.p.A. of Milan, Italy. Opron Incorporated (Boucherville, Quebec) is responsible for the completion of the concrete portion of the two LNG tanks. Lorneville Mechanical Contractors (LMC), a St. John-based mechanical service and engineering company, was awarded the contract to construct the steel interior and roofs of the two LNG storage tanks. The tanks consist of an inner tank made of high-performance 9% nickel steel and an outer tank made of advanced concrete. The offshore EPC contract was awarded to Kiewit-Weeks-Sandwell Partnership, a consortium of Peter Kiewit Sons Company of St. John's, Newfoundland; Weeks Marine of Cranford, New Jersey; and Sandwell Engineering of Vancouver, British Columbia.

Canaport LNG management has also approved the additional investment for the construction of a third LNG storage tank. The third LNG tank was originally approved by the provincial and federal governments under the environmental impact assessment completed on the project in August 2004. Construction on the third tank is expected to begin shortly after the terminal begins operation and is estimated to last for 12 months.

In addition to Canaport LNG, there are five more import terminals planned for Canada. Out of the five remaining one is also located in Atlantic Canada, two are in Quebec and the final two are in Western Canada. Including Canaport the projects represent over $6.1 billion in spending. If all five terminals are constructed that would give Canada 3.625 billion cubic feet per day of re-gasification capacity plus the additional 1.0 Bcf/d from Canaport LNG.

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