Energy Irving/Repsol Partnership Plans to Send First Natural Gas Down Pipeline in March

Canaport LNG will begin commercial deliveries of natural gas in the first quarter of 2009, spokeswoman Carolyn Van der Veen said this week.

With construction 84 per cent complete on the liquified natural gas terminal and regasification plant, a crew of 1,500 continues to work at the East Saint John site. The Canaport LNG partners – Irving Oil Ltd. (25 per cent) and the Spanish company Repsol YPF (75 per cent) – broke ground in November 2005.

It will take several weeks after the end of construction before the plant can begin steady deliveries to the 145-kilometre Brunswick Pipeline that will carry natural gas from Saint John almost to the American border to connect to the Maritimes & North East Pipeline before it crosses the St. Croix River north of St. Stephen.

Emera Inc. (EMA: TSX) of Halifax owns the Brunswick Pipeline, the 30-inch diameter link from Canadaport LNG to its American markets. Emera contracted with Spectra Energy (SE: NYSE) to design, lay and operate the Brunswick Pipeline.

Brunswick Pipeline named Louisbourg Pipelines of Mississauga, Ont., a division of Simard-Beaudry Construction Inc., as general contractor to build the $350-million project.

Construction, which began in earnest in November, reached 73 per cent completion this week, said Brunswick Pipeline spokeswoman Susan Harris.

In urban areas, the contractor still has to bore crossings under four roads. In rural areas, the contractor has about 10 days of blasting through rock to complete in the Prince of Wales area west of Saint John city limits.

The crew must finish laying and welding pipe, test the pipe for leaks and other damages, then start cleanup work.

“We’re probably looking at early December to be finished,” Harris said. That will leave only remediation to the right of way and environmental work to complete next spring.

Canaport LNG named SNC-Snam, a partnership between the Quebec companies SNC-Lavalin (TSX: SNC) and Snamprogetti Canada Inc., to engineer and build the liquified natural gas project.

At the end of construction, the plant must still go through pre-commissioning and commissioning before Canaport LNG can take its first ocean tanker load of liquified natural gas to “cool down” the first storage tank, four of eight vaporizers, four unloading arms, interconnection pipes, boil-off gas compressor, condenser and submerged combustion vaporizers.

With everything down to -162 C, Canaport LNG will begin by sending 28 million cubic metres of natural gas per day down the Brunswick Pipeline before the end of March, Van der Veen said.

From then, Canaport LNG will work at commissioning and cooling down the other two tanks and increasing production to the capacity of one billion cubic metres per day.

The first shipments of liquified natural gas will come from Trinidad and Tobaggo.

The partners originally estimated the cost of the Canaport LNG construction project at $750 million, but this increased with the decision to add a third tank.

The parties cleared some financial issues involving this project last month when two subcontractors settled multi-million-dollar claims for payment against SNC-Snam and its predecessor SNC-CENMC.

Acier Ecan, an installer of steel rebar from Longueil, Que., placed a mechanics lien on the project demanding payment of more than three million dollars from Opron Maritimes Construction for completed work.

Opron, in turn, placed a mechanic’s lien seeking more than $13 million from SNC-Snam for labour, material and equipment to build two liquified natural gas tanks.

Acier Ecan and Opron Maritimes each filed suit in Saint John Court of Queen’s Bench in spring 2008.