Natural Resources Minister Jonathan Wilkinson says two private-sector proposals to export liquefied natural gas from Canada’s East Coast to European countries struggling to reduce their dependence on Russian fuel should go ahead without federal funding. Mr. Wilkinson said in an interview that Ottawa is assisting in discussions between Canadian energy companies and prospective German LNG buyers. But he added that both Energy proposals will have to stand on their merits and go through Canadian regulatory reviews to ensure they meet that country’s climate goals. “Our view is that the private sector should provide the money for these projects and it should be done on a commercial basis,” Mr Wilkinson said. “We are certainly willing to help in the talks with our friends in Germany who are looking for these kinds of supplies to make sure that there are long-term arrangements, contractual arrangements that provide certainty to the private sector.” After Moscow’s full-scale invasion of Ukraine in February, Europe began trying to reduce gas imports from Russia. Last week, German Vice Chancellor Robert Habeck told a crowd at an event organized by the Sueddeutsche Zeitung newspaper that Russia could begin blocking the Nord Stream 1 gas pipeline from July 11. Germany has started preparing for gas rationing this winter. Pieridae is considering a full-scale Nova Scotia LNG project plan to export natural gas to Germany The two East Coast proposals are being made by Pieridae Energy Ltd’s Goldboro LNG. in Nova Scotia, and Repsol SA’s Saint John LNG in New Brunswick. Both companies say they are studying the feasibility of building new LNG export terminals, which would be able to transport the natural gas directly across the Atlantic Ocean to European markets. Last year, the federal government rejected Pieridae’s request for $925 million in financial assistance for Goldboro LNG. Canada currently has no operational LNG export terminals. And there is only one terminal under construction: the Shell PLC-led LNG Canada project, which will transport natural gas in liquid form to Asia from Kitimat, BC. These exports are scheduled to begin in 2025. To realize their terminal dreams, Calgary-based Pieridae and Madrid-based Repsol will need to arrange for natural gas to be transported from Alberta via a circuitous route to the East Coast. To do this, they will be required to negotiate directly with pipeline companies. “We would expect the proponent to work with the pipeline provider to ensure they actually have a business case. I mean they don’t have a business case if they don’t have gas,” Mr Wilkinson said. TC Energy Corp.’s pipeline system. in Ontario would require significant upgrades and expansions, as would the TransQuebec & Maritimes Pipeline system in Quebec. Calgary-based TC Energy and Montreal-based Énergir each own a 50 percent stake in TQM. TQM is connected to the Portland Natural Gas Transmission System (PNGTS), a pipeline route in New England that is 61.7% owned by TC Energy. The remaining stake is owned by Northern New England Investment Co. The PNGTS in turn connects to the Maritimes and Northeast Pipeline, which runs from New England to New Brunswick and Nova Scotia. Enbridge Inc. Calgary-based owns 77.5% of Maritimes and Northeast, with the remainder held by Emera Inc. and Exxon Mobil Corp. TC Energy said in a statement that it believes LNG from Canada could play a vital role in helping Europe wean itself off natural gas from Russia. “We respond to customer needs and welcome opportunities to collaborate and develop solutions to meet those needs,” the company said. “Energy projects need the support of indigenous groups, governments, regulators, communities and buyers to ensure projects are successfully implemented.” Mr Wilkinson said the situation with East Coast LNG proposals today is very different from the Trans Mountain pipeline four years ago. Kinder Morgan Canada Inc. sold the Trans Mountain project, including its Vancouver port terminal and pipeline expansion plans, to Ottawa for $4.5 billion in 2018 after years of failed or stalled energy proposals in Canada. “Trans Mountain was not intended to be a subsidy,” Mr Wilkinson said. “Trans Mountain was because there was a lot of risk in the project and the proponent decided they just weren’t willing to take that kind of political risk.” As for the East Coast proposals, he said, proponents would have to meet Canada’s net zero carbon emissions targets by 2050. “We are willing to try to help with the regulatory process. We are willing to help with the counterparty in Germany or elsewhere in Europe, but our view is that the private sector must raise the capital.” Timothy Egan, president of the Canadian Gas Association, has written four letters to Prime Minister Justin Trudeau since March, hoping to draw more attention to Canada’s opportunities to export LNG. “While we are prepared to deliver, we require an assurance from the government that the regulatory process will not delay or impede development,” Mr Egan wrote in his latest letter, which he sent on Thursday. The Sierra Club Canada Foundation and the Council of Canadians, meanwhile, are urging the federal government to reject any new LNG projects in Canada. “Instead of pushing for natural gas expansion, Canada should be stepping up renewable energy to protect consumer wallets, protect our economy and protect our climate,” Gretchen Fitzgerald, director of national renewable energy, said in a statement. Sierra Club programs. Mr Wilkinson said Pieridae and Repsol still have a lot of work to do as they consider how best to build their respective export terminals and how to convince TC Energy and other companies to make the necessary upgrades to their pipeline systems. The pipeline companies will in the minimal need to add compressor stations, and new pipelines will probably also need to be installed in order to meet the additional demand that the proposed terminals could create. “We’re certainly interested in seeing one of them make a final investment decision and we’re trying to help them reduce the uncertainty around some of the upgrades, for example, that would be required,” Mr Wilkinson said. Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox morning or night. Sign up today.
