PORTLAND, Maine — The first approved exporter of liquefied natural gas in Eastern Canada has asked U.S. energy regulators for permission to bring the fuel from central and western Canada through New England before shipping to foreign markets.
The company Bear Head LNG, a subsidiary of the Australian company Liquified Natural Gas Limited, has asked federal energy regulators for the ability to enter 25-year contracts for natural gas pipeline capacity of up to 1.2 billion cubic feet per day.
The gas would make the last leg of its journey through Maine from western and central Canada on the Maritimes and Northeast Pipeline, ending in Calais.
Spectra Energy, which owns the Maritimes and Northeast Pipeline, is seeking regulatory approval to reverse the direction of that pipeline, which has run north to south.
Bear Head projected in its initial U.S. Department of Energy application that the use of that capacity could raise the price of natural gas in the region by as much as 1.8 percent from 2019 to 2033, according to an analysis the company supplied from the consultancy Black & Veatch, which determined the proposed project would “have a limited price impact in New England” from 2019 to 2049.
Bear Head wrote that delays in exporting natural gas from shale in western and central Canada has created an opportunity to move that gas east for export to foreign markets.
Those market shifts are the same driving Downeast LNG to seek approval for an LNG export terminal in Robbinston, on the western shore of Passamaquoddy Bay.
Company officials at the end of March said they expected to file draft environmental reports to federal regulators within weeks for that project, which also counts on reversal of the Maritimes and Northeast pipeline and would build an extension off that line.
In a July 2014 investor presentation, Bear Head said the eastern Canada location opens up a closer connection to Europe and is only a 5 percent longer trip to Asian markets than export sites on the Gulf of Mexico. The company said it plans to be viable processing about 300 million cubic feet per day, at a minimum.
The planned facility would produce 8 million metric tons of gas a year, expanding as more gas becomes available.
It plans to use natural gas harvested in Canada and the United States to feed the processing plant, but noted in its July presentation that there are various other potential sources of gas, including from offshore drilling sites south of Nova Scotia.
Bear Head identified three possible routes that gas from Canada could take to connect with the Maritimes and Northeast Pipeline, connecting to the Iroquois Gas Transmission System in Waddington, New York, and then to the Tennessee Gas Pipeline at Wright, New York, before ending up at Dracut, Massachusetts, where it would meet the Maritimes pipeline.
It could also connect with the Portland Natural Gas Transmission System in Pittsburgh, New Hampshire, or through either the the National Fuel Gas Supply pipeline in Niagara Falls, New York, or the Empire Pipeline in Grand Island, New York, before traveling to Dracut, the company said in a regulatory filing.
Bear Head’s project in February received approval from the Nova Scotia Utility and Review Board to begin construction and needs one remaining regulatory approval from the province’s environmental agency to begin construction there, according to a document filed with the Department of Energy earlier this month.
The company has to get approval from the Department of Energy to import or export natural gas under federal law. The department last August opened a formal process for requesting permission to export natural gas to countries with which the United States does not have free trade agreements.
Patrick Woodcock, director of the Governor’s Energy Office, said further details about the project will determine what impact it stands to have on Maine.
“The specifics matter,” Woodcock said. “The thing that we’re concerned about is No. 1 that these projects don’t move forward without also leaving some gas for our customers in Maine.”
Woodcock said his office has posed questions to the Department of Energy asking whether the agency could require Bear Head to release some of its contracted capacity to Maine consumers in the event of need, primarily for heating.
He said the project, if it facilitates the reversal of the Maritimes pipeline or expansion of other lines in the region, could help address constrained wintertime gas supplies to the region, particularly to power generators.
Bear Head said it expects to begin construction in 2015 and exports by 2019 from the LNG processing facility near Point Tupper in Richmond County, Nova Scotia. The Chronicle Herald reported the project is estimated to cost $2 billion to $8 billion Canadian to construct.
Bear Head’s parent company has a proprietary method for processing liquified natural gas.
The company also has proposed an LNG processing facility near Port of Lake Charles, Louisiana, called Magnolia LNG, and another near the Port of Gladstone in Queensland, Australia, called Fisherman’s Landing LNG.
It purchased rights to the Bear Head project from Anadarko Petroleum Corp. in August 2014.
The Department of Energy published notice of the Bear Head application in the Federal Register Thursday, soliciting protests, motions to intervene and notices of intervention to be emailed to email@example.com or mailed to the U.S. Department of Energy, office of OIl and Gas Global Security and Supply, P.O. Box 44375, Washington, D.C., 20026-4375.