LNG tanker arrives in New Brunswick

By Bill Trotter, BDN Staff
Posted Dec. 02, 2009, at 12:14 p.m.

The energy market in New England and Atlantic Canada is about to get a big delivery of natural gas.

The 315-meter-long, Qatar-based Q-Flex MV Mesaimeer, the second-largest liquefied natural gas tanker in the world, arrived Tuesday off Saint John in New Brunswick to deliver 4.6 billion cubic feet of natural gas to the newly opened Canaport LNG terminal, which is a joint project between Saint John-based Irving Oil and Spanish energy giant Repsol YPF. The ship is the 10th LNG vessel to deliver the fuel to the terminal since it began operations in June.

According to Canaport officials, the Q-Flex’s arrival marks the first LNG supertanker delivery to the East Coast of North America. The delivery from Qatar, an Arabian country on the Persian Gulf that has the third-largest oil and gas reserves in the world, was trumpeted by the company as a milestone in the region’s energy development.

“This marks a new era for our region and for Canaport LNG as a significant player in the global gas industry,” Blaine Higgs of Irving Oil parent company Fort Reliance said in a prepared statement.

But the development of LNG terminals in North America, and in particular the Canadian government’s stance against the possible development of LNG terminals just across the border in eastern Maine, have been controversial.

Developers who are looking to build terminals on the western side of Passamaquoddy Bay, which is split between Maine and New Brunswick, have said Canadian opposition to terminals on the bay amounts to protectionism. The Canadians argue that LNG tanker traffic through Canadian waters into Passamaquoddy Bay would pose a danger to nearby residents and would be out of place in the relatively pristine bay. Those arguments, American developers say, fall flat when you consider the greater population density of the Saint John area and the fact that Canadian ships already routinely carry into the bay dangerous cargo such as ammonium nitrate.

But on Tuesday, representatives of two American LNG development firms said that the Q-Flex delivery is a good sign for the New England LNG market and the terminals they hope to build.

Dean Girdis, president of Downeast LNG, indicated by e-mail that it shows there is a healthy market for LNG importation in the Northeast, even though the price of natural gas is relatively low. This means there is a market for his proposed terminal in Robbinston, he said.

“This is a good sign for both LNG regasification terminals and consumers as it affirms that New England is an attractive market for LNG suppliers and, second, the increased supply source to our region will encourage gas-to-gas competition thereby lowering prices to consumers,” Girdis wrote.

According to Girdis, the delivery illustrates that imported gas is cheaper than producing fuel from mineral shale. Domestic shale gas may be abundant, he said, but the expense of extracting it and processing it exceeds the cost of importing LNG from overseas.

Tony Buxton, an attorney for Calais LNG, said Tuesday evening that the delivery demonstrates that LNG tanker traffic is safe, or it would not be permitted in the densely populated Saint John area. It supports his firm’s claims that it would be safe to deliver LNG to the company’s proposed terminal site in Calais, he said.

Second, it shows there is ongoing demand for added natural gas capacity in New England, Buxton said. There is a good market for it because it is cleaner or more reliable than other fuels, he said, and though it is relatively cheap, it fetches a higher price in the region than it does elsewhere in the country.

“Will [the Canaport terminal] meet all the demand? I doubt it,” Buxton said. “There aren’t many options [for energy sources] left.”

But Robert Godfrey, spokesman for Save Passamaquoddy Bay, said Buxton is missing a key distinction. Godfrey’s group opposes LNG development on the bay.

Tanker traffic at Canaport is safe because the terminal is five miles from any populated areas and because it has a direct approach from open water, Godfrey said. In Passamaquoddy Bay, the tankers would have to wind their way through Head Harbour Passage past communities on both sides of the border.

“Tanker traffic to Saint John is safe,” Godfrey said. “It’s entirely different from the situation in Passamaquoddy Bay.”

Godfrey also disputed the notion that more development is needed to satisfy the demand for natural gas in New England. Federal energy experts have said that the Canaport terminal and two offshore facilities in Massachusetts, one of which is operating and the other of which is being built, should satisfy all the foreseeable demand in the region, he said.

Mary Usovicz, spokeswoman for Repsol YPF, declined Tuesday to comment on what the Q-Flex delivery might mean for proposed LNG terminals in New England. She said that of the existing terminals on the East Coast, only the terminal in Elba Island, Ga., has the ability to accept supertanker deliveries.

“In the Northeast, we’re the only ones,” Usovicz said.

The Q-Flex has not started unloading LNG, according to Usovicz. A shift in the winds Tuesday prompted the ship to delay unloading its cargo until weather conditions improve, she said.

http://bangordailynews.com/2009/12/02/business/lng-tanker-arrives-in-new-brunswick/ printed on October 1, 2014