https://www.cbc.ca/news/politics/repsol-lng-export-europe-too-costly-1.6781588

 

Energy company drops idea of shipping LNG to Europe, cites associated costs

Spanish energy company Repsol says shipping natural gas to its Saint John terminal would be too costly

 

Darren Major · CBC News · Posted: Mar 16, 2023 8:34 PM ADT

 

 

Spansih energy company Repsol considered expanding its Saint John LNG import terminal to allow it to ship gas across the Atlantic. (CBC)

 

Spanish energy company Repsol says it won't be expanding its Saint John LNG terminal to export liquefied natural gas to Europe because the associated costs make the project unviable.

Europe faced a serious supply crunch last year as it weaned itself off Russian oil and gas following Moscow's unprovoked invasion of Ukraine.

As they scrambled to replace Russian gas, Germany and other EU members turned to Canada as a possible solution to their supply woes.

• Poilievre attacks Canada's natural-gas policies as Europe says it wants hydrogen

• Scholz says Germany wants more natural gas from Canada but lacks infrastructure, business backing

Repsol's current import terminal in Saint John, New Brunswick was considered as an option to export natural gas across the Atlantic.

But as Bloomberg News first reported, the company considers the project too costly. Company spokesperson Michael Blackier told CBC News that Repsol conducted a viability study on the project.

"The overall costs to ship the gas to our terminal are too high," Blackier said in an email to CBC.

U.S. LNG exporters boosted shipments to Europe by more than 137 per cent in the first 11 months of 2022 — an increase that has resulted in tens of billions of dollars in new revenue, according to U.S. Energy Information Administration (EIA) data.

During his visit to Canada last summer, German Chancellor Olaf Scholz said he was open to the idea of accepting more gas from Canada but added the country lacks infrastructure and a proven business case to boost exports across the Atlantic.

German Chancellor Olaf Scholz joined the CBC for an interview in Toronto on August 23, 2022. (Evan Mitsui/CBC)

Over the past decade, businesses have pitched 13 LNG export terminals for Canada's West Coast and five for the East Coast.

These projects have failed for a variety of reasons.

European Commission President Ursula von der Leyen poured cold water on the idea of Canada exporting more natural gas to Europe during her recent visit.

Both Scholz and von der Leyen have said they're interested in buying clean hydrogen energy from Canada. 

"We will continue to support our European friends and allies as they accelerate their clean energy transition and eliminate their dependence on Russian energy," a spokesperson for Natural Resource Minister Jonathan Wilkinson's office told CBC in an email.

• Battle lines drawn on potential New Brunswick gas export terminal

• Analysis
  LNG vs. hydrogen: Who will win N.B.'s green-energy race?

"In the case of [Saint] John LNG, the project proponent has informed us that their evaluation concludes there is no business case, as the cost of transporting gas across the significant distances [is] too high to support project economics."

The New Brunswick government hoped an expansion of the Saint John terminal could provide a rationale for ending the moratorium on shale gas development in New Brunswick.

Gas from New Brunswick is a "possible solution" for Europe, Premier Blaine Higgs said last spring, adding that it would be less expensive than gas shipped to a Saint John terminal over long distances via pipelines.

CBC reached out to the New Brunswick government for reaction but didn't receive a response by publication time.

ABOUT THE AUTHOR

Darren Major

CBC Journalist

Darren Major is a senior writer for CBC's Parliamentary Bureau. He can be reached via email darren.major@cbc.ca or by tweeting him @DMajJourno.

With files from Jacques Poitras

CBC's Journalistic Standards and Practices

 

 

 

384 Comments

 

 

David Amos

Content Deactivated

Surprise Surprise Surprise

 

 

Walter Vrbetic   

Reply to David Amos

Yep, no business case...

Surprised, not...

 

 

 

 

David Amos

Methinks Repsol must recall my actions within the NEB and 3 elections in 2006 N'esy Pas?  

 

 

Samual Champlain 

Reply to David Amos

Methinks they have not given it any thought in over 17 years.

David Amos

Reply to Samual Champlain  

Think again one of the lawyers I dealt with back then was honest with me before he got his latest appointment  

 

 

David Amos

Reply to Samual Champlain

BTW Yesterday the EUB sent me their latest decision I can't wait to read Mr Jones spin on it 

 

 

 

 

 

 

 

 

Chris Halford 

Poilievre of course will blame Trudeau.

 

 

David Amos

Content Deactivated

Reply to Chris Halford

I blame Poilievre too 

 

 

Oscar Street

Content Deactivated 

Reply to David Amos

It is Trudeau's fault. He's made it clear energy projects in Canada do not get built under his watch. This sort of project would need design upgrades and better sources. Neither of which is possible with the current government. Trudeau is happy to ship energy in from opec to the east coast. It's clear and pretty well documented. 

 

 

David Amos

Content Deactivated

Reply to Oscar Street  

I was dealing with the questionable Repsol dudes long before Trudeau was even a MP Trust that that is pretty well documented too 

 

 

Oscar Street

Reply to David Amos

I am sure you would. The reality new people new standards etc. One can't compare safety standards 20 years ago to those used today. I get being skeptical. I don't understand flat out saying no without discussing the matters and the risks. 

 

 

 

 

 

 

J Dunn 

And yet shipping across the Atlantic is much shorter than across the Pacific? Hmmm. 

 

 

Chris Halford

Reply to J Dunn 

Read the article! The issue is the cost of getting the gas to the shipping point, not the cost of carriage. 

 

 

David Amos

Reply to Chris Halford 

Trust that I read it  

 

 

Oscar Street

Reply to Chris Halford   

The reasons you aren't reading because it's putting pressure on the government. We should be building access and securing sources . A company can't just shred current contracts to fill a new need. It needs capacity and source material. That is the part that's not viable. I know it takes a little understanding but that's how this works.

Vernon Shein 

""The overall costs to ship the gas to our terminal are too high," Blackier said in an email to CBC.".

And no explanation for why costs to ship gas to their terminal are too high.

This is disgraceful journalism and reeks of political bias.

Chris Halford

Reply to Vernon Shein  

"Reeks of political bias"?! A commercial business says that something's too expensive - how is that political? 

 

 

David Amos

Reply to Chris Halford   

Everything is political and its always about the money Remember the Emera Pipeline? 

 

 

Vernon Shein 

Reply to Chris Halford  

It is political bias by the reporting CBC, not the company. Real journalists would have asked why the costs of getting the gas was too high to be economic and answer would have been the lack of pipeline capacity in Canada. And that lack of pipeline capacity can be blamed directly on the Trudeau Liberal cabinet and their anti fossil fuel agenda.

In not reporting this CBC has shown their bias.