(Adds Repsol comment)
By Nia Williams
March 16 (Reuters) - Repsol has decided against
developing a liquefied natural gas (LNG) terminal on Canada's
east cost because it would cost too much to ship the gas to the
terminal, the company said on Thursday.
Spanish company Repsol had been looking into developing an
LNG export terminal in Saint John, New Brunswick, to supply
European markets, part of a global push to secure alternative
supplies to Russian gas following the invasion of Ukraine.
But to reach the terminal gas would have to be transported
thousands of kilometres from western Canada, requiring new
pipeline capacity through Canadian provinces and northeastern
U.S. states that in the past have resisted fossil fuel
development.
"Following a study carried out by the company, it was
determined to not continue with the Saint John liquefaction
project as the tolls associated to it made it uneconomical," a
Repsol spokesperson said in a statement.
Last summer Repsol CEO Josu Jon Imaz said the company would
need a buyer to commit to a 15- to 20-year offtake agreement for
the gas, as well as new pipeline infrastructure and tolling
agreements to get the gas to the Atlantic coast.
European countries scrambled to source new gas supplies last
year as prices rocketed following Russia's invasion of Ukraine,
prompting German Chancellor Olaf Scholz to visit Canada in
August in the hope the world's sixth-largest producer could
expedite exports to Europe.
Earlier in 2022, the Canadian government was in talks with
Repsol and privately owned Pieridae Energy about potentially
accelerating their LNG projects on the east coast but Ottawa's
support appeared to wane even before Scholz's visit. A spokesperson for Canada's Natural Resources Ministry said
Repsol has informed the Canadian government that there was no
business case for an east coast terminal.
"We will continue to support our European friends and allies
as they accelerate their clean energy transition and eliminate
their dependence on Russian energy," spokesperson Ian Cameron
said. "It is up to individual proponents to ensure the economic
viability of their proposed projects."
Pieridae Energy did not immediately respond to a request for
comment.
(Reporting by Nia Williams and Gokul Pisharody; Editing by
Chris Reese and Christopher Cushing)
Messaging: nia.williams.thomsonreuters.com@reuters.net))
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