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UNCLAS SECTION 01 OF 03 OTTAWA 000982 
 
SIPDIS 
 
STATE FOR WHA, EEB, OES 
DOE FOR POLICY AND INTERNATIONAL AFFAIRS 
 
E.O. 12958: N/A 
TAGS: EPET ENRG SENV CA
SUBJECT: PROPOSED LNG RECEIVING TERMINALS IN CANADA 
 
REF: 08 HALIFAX 45 
 
Summary and Introduction 
------------------------- 
 
¶1. (U) Although Canada currently does not have any liquefied 
natural gas (LNG) receiving and regassification terminals, 
there are many projects under development.  Canada has four 
fully approved LNG import facilities, one of which is under 
construction, and three proposed terminals.  One additional 
project, which had been approved, was scrapped after it was 
unable to secure a long-term supply of LNG.  Many of these 
proposed LNG terminals plan to provide LNG to U.S. natural 
gas markets as well as Canadian markets.  However, despite 
the large number of LNG import facilities under development, 
their likelihood of completion is hindered by the 
difficulties many are having in obtaining a long-term LNG 
supplier and in navigating the long domestic approval 
process. End Summary and Introduction. 
 
Canaport, St. John, New Brunswick 
--------------------------------- 
 
¶2. (U) The Canaport LNG receiving and regassification 
terminal is under construction and is slated to begin 
operations late in 2008.  Canaport LNG is a partnership 
between Canada's Irving Oil Limited (25 percent) and Spain's 
Repsol YPF, S.A. (75 percent), with the latter supplying the 
LNG and marketing it outside Atlantic Canada.  Overall 
construction is 80 percent finished with 99 percent of 
offshore and 76 percent of onshore construction completed. 
The imported LNG will be sold in Canada and the U.S. and is 
projected to supply 20 percent of the natural gas needs of 
the northeastern U.S.  The terminal will have an initial 
send-out capacity of one billion cubic feet per day (bcfd) 
and will connect to the existing Maritimes and Northeast 
Pipeline (M&NP) through the 145-km Brunswick Pipeline, to be 
completed in the fall in conjunction with the terminal.  The 
initial source of LNG will be Trinidad & Tobago, but Canaport 
hopes to eventually receive supplies from Algeria and other 
countries.  One source of possible resistance is the design 
change from a cold vent to a flare system as the proposed 
safety release system.  A cold vent system discharges methane 
gas into the atmosphere while a flare system combusts the gas 
before discharging it and will release a small amount of 
carbon dioxide as a result.  As part of the flare system, a 
flame atop a steel skeleton will burn continuously at a usual 
height of one meter.  During the start-up of each LNG tank a 
visible flame of 43 meters will burn for approximately 10 
days.  Canaport is asking for the public's comments regarding 
the design change.  If the project remains on schedule, it 
will be the first LNG regassification terminal in Canada. 
 
Rabaska, East-end Levis, Quebec 
------------------------------- 
 
¶3.  (SBU) Rabaska is a limited partnership between Gaz Metro 
of Quebec, Enbridge Inc. of Canada, Gaz de France, and 
Gazprom Marketing and Trading, Inc. (GMUSA) of the U.S. 
GMUSA is a wholly owned U.S. based subsidiary of Russia's OAO 
Gazprom and joined the partnership on May 15 when it signed a 
Letter of Intent to be the LNG supplier for the project.  The 
LNG would come from Gazprom's Shtokman liquefaction project 
which is currently under development in the central Barents 
Sea, 450 km northeast of Murmansk.  In May Gazprom's Deputy 
Chairman Alexander Medvedev announced that 50 percent of 
Shtokman's LNG exports would be sent to Rabaska.  Gazprom 
QShtokman's LNG exports would be sent to Rabaska.  Gazprom 
partners say Shtokman is scheduled to begin production in 
2013, although Norwegian experts developing the nearby 
Snohvit gas field do not expect Shtokman to begin exporting 
gas earlier than 2015.  Construction of Rabaska would be 
timed to meet Shtokman's first anticipated deliveries in 
¶2014.  The LNG would be distributed in Quebec and eastern 
Ontario through the Trans Quebec and Maritimes (TQM) Pipeline 
which would be connected to the terminal by an approximately 
42-km pipeline to be built as part of the project.  The 
facility would have an initial send-out capacity of 500 
million cubic feet per day (mcfd).  Comment: The Rabaska 
project has provoked intense local criticism and several 
ongoing efforts to launch legal challenges.  While the 
project has received federal and provincial approval, it is 
not yet certain that it will move forward.  End comment. 
 
Cacouna Energy, Gros Cacouna Island, Quebec 
------------------------------------------- 
 
 
OTTAWA 00000982  002 OF 003 
 
 
¶4. (U) Cacouna is a joint venture between TransCanada and 
Petro-Canada that has been proposed for 15 km northeast of 
Riviere-du-Loup.  The project does not have an LNG supplier 
lined up, as potential anchor supply Gazprom announced on 
February 8 that it had decided not to pursue its proposed 
Baltic LNG liquefaction facility that was to be the primary 
source of LNG for the terminal.  The LNG would be accessible 
to Quebec and Ontario as well as the northeastern U.S. and 
the terminal would have an average send-out capacity of 500 
mcfd.  Cacouna Energy was approved by the Government of 
Quebec and public opinion seems to be in favor of the 
project, with a Chamber of Commerce survey showing support 
from members at over 82 percent and a Cacouna Village 
municipality referendum in September of 2005 showing 57.2 
percent of residents in favor.  Since losing its potential 
supplier, however, the long-term fate of the project is in 
question. 
 
Kitimat LNG, Kitimat, British Colombia 
-------------------------------------- 
 
¶5. (U) Kitimat is a subsidiary of Calgary-based Galveston LNG 
Inc. and is planned to be located in Bish Cove.  Construction 
is slated to begin in 2009 and be completed by the end of 
¶2011.  The LNG is intended for diverse North American gas 
markets and would be supplied through an approximately 14-km 
pipeline connected to Pacific Trail Pipelines and Spectra 
Energy's Westcoast Pipeline system.  It would have a send-out 
capacity of 1 bcfd.  Kitimat LNG is the only fully approved 
LNG regassification terminal on the west coast of North 
America and cites its proximity to the Alberta oil sands as 
an advantage.  Kitimat has not yet secured an LNG supplier 
for the facility. 
 
Energie Grande-Anse, Saguenay River, Quebec 
------------------------------------------- 
 
¶6. (U) Energie Grand-Anse is pursuing the LNG project in 
conjunction with the Saguenay Port Authority.  Grand-Anse had 
planned to seek government approvals in the summer of 2009 
and begin construction in the fall of that year with a 
completion date set for 2012, but everything has been pushed 
back by at least a year as they have been unable to reach an 
agreement with LNG suppliers.  The terminal's initial 
operation date may now be as late at 2014.  The LNG would 
supply Quebec, Ontario, and northeastern U.S. markets via a 
linking terminal connected to the TQM Pipeline.  The facility 
would have a send-out capacity of 1 bcfd. 
 
Maple LNG, Goldboro, Nova Scotia 
-------------------------------- 
 
¶7. (U) The Maple LNG project is a partnership between The 
Netherlands' 4Gas and Suntera Canada Ltd, a joint venture 
between SUN Energy and ITERA.  SUN energy is the energy 
investment arm of the SUN Group, a private investment group 
active in Russia, India, Europe, and the U.S., and ITERA is a 
Russian oil and gas company.  Construction is planned to 
start in 2010 with an initial delivery of gas in early 2012. 
The gas would be supplied to eastern Canadian and 
northeastern U.S. markets with an initial send-out capacity 
of 1 bcfd and the potential to increase to 2 bcfd.  The 
terminal would be adjacent to the M&NP intake station at 
Sable Offshore Energy Gas Plant in Goldboro.  Maple LNG 
received a Permit to Construct from the provincial utility 
and review board on June 18, 2008 and has received federal 
and provincial environmental approvals.  Discussions are 
Qand provincial environmental approvals.  Discussions are 
on-going with various parties around the globe concerning the 
supply of LNG for the terminal. 
 
WestPac LNG, Texada Island, British Colombia 
-------------------------------------------- 
 
¶8. (U) The project, proposed by Calgary-based WestPac LNG 
Corporation, would be located near Kiddie Point in the Strait 
of Georgia, approximately 120 km northwest of Vancouver.  The 
company plans to begin a regulatory review and environmental 
assessment in early 2009 and begin construction in late 2010 
or early 2011 with a completion date set for 2014.  WestPac 
would provide gas to coastal and lower mainland British 
Colombia and has stated it has no plans to export gas to the 
U.S.  There would be on-site access to the Vancouver Island 
gas pipeline and the plant would have a send-out capacity of 
500 mcfd.  Commercial agreements for LNG supply have not yet 
been reached.  Comment: The Westpac proposal has garnered a 
considerable amount of protest from the local population and 
 
OTTAWA 00000982  003 OF 003 
 
 
environmental groups who do not want LNG facilities or 
tankers anywhere near Texada Island.  Although these 
objections are in the early stages, they could mean a strong 
impediment to Westpac's plans.  End comment. 
 
Bear Head LNG, Cape Breton Island, Nova Scotia 
--------------------------------------------- - 
 
¶9. (U) Anadarko Petroleum's LNG project was mothballed on 
February 9, 2007 because the company was unable to secure a 
long-term LNG supply.  Construction was initiated in October 
of 2004 and was scheduled to be completed in late 2008.  The 
imported gas was intended for northeast markets via the M&NP 
at an eventual rate of 1.5 bcfd. 
 
Grassy Point LNG Transshipment and Storage Terminal, 
Placentia Bay, Newfoundland 
--------------------------------------------- ----------------- 
 
¶10. (U) Unlike the previous proposals, Newfoundland LNG Ltd's 
Grassy Point terminal would not provide for the 
regassification of LNG, but would still serve as a component 
of the LNG import chain by offering transshipment and storage 
services.  LNG could be brought on larger LNG carriers and 
then transferred to smaller vessels for shipment to LNG 
regassification terminals on the Atlantic coast.  The project 
would allow for LNG cargo transfer, short and long-term 
storage of LNG, temporary vessel-based LNG storage, and a 
lay-up site for in-transit LNG carriers.  Newfoundland LNG 
Inc., a Newfoundland and Labrador corporation, is jointly 
owned by North Atlantic Pipeline Partners, L.P. and LNG 
Partners, L.L.C.  The project has received provincial 
approval and is undergoing a federal assessment.  It is 
scheduled to be completed in 2010. 
 
¶11. (U) Due to the uncertainty of obtaining a steady supply 
of LNG along with the slow-moving nature of the proposals and 
resistance towards them, only four of the 22 fully approved 
LNG facilities in the U.S. and Canada are currently under 
construction.  Thus, while LNG importing terminals have the 
potential to increase supply in the North American natural 
gas market, the many challenges associated with their 
development have stalled the progress of many proposed LNG 
projects. 
 
Visit Canada,s Economy and Environment Forum at 
http://www.intelink.gov/communities/state/can ada 
 
WILKINS