Repsol abandons its LNG terminal. The company announced last week that it was abandoning plans to develop a liquefied natural gas (LNG) terminal on Canada’s east coast. According to the company, the costs ofshipping gas to the terminal were simply too high to make the project profitable.
The project was intended to supply European markets with liquefied natural gas, offering an alternative to Russian gas, after the invasion of Ukraine. The LNG export terminal was to be located in Saint John, New Brunswick.
The LNG terminal, an uneconomic project
Unfortunately, transporting the gas from western Canada to the terminal required new pipeline capacity through several Canadian provinces as well as states in the northeastern United States. This would have increased the project costs considerably. For this reason, the company has decided not to pursue its Saint John liquefaction project.
In a statement, a Repsol spokesperson said, “Following a study conducted by the company, it was decided not to pursue the Saint John liquefaction project because the associated tolls made it uneconomic.”
Ottawa’s support for Repsol and its LNG terminal wanes
In 2022, the Canadian government was in talks with Repsol and the private company Pieridae Energy regarding a possible acceleration of their LNG projects on the East Coast. However, Ottawa’s support appeared to wane even before the visit of German Chancellor Olaf Scholz in August 2022. Repsol has since informed the Canadian government that there is no business case for an east coast terminal.
Natural Resources Canada said in a statement, “We will continue to support our European friends and allies as they accelerate their clean energy transition and eliminate their dependence on Russian energy. “It is up to individual developers to ensure the economic viability of their proposed projects.”
Pieridae Energy did not immediately respond to a request for comment.
