Bear Head LNG and Bear Head USA, both units of LNG Limited, have filed an application with the U.S. Department of Energy for authorization to export natural gas to Canada for a 25-year period.
Under the DOE application, Bear Head LNG and Bear Head USA are seeking long-term, multi-contract authorization to export up to 503 billion standard cubic feet per year, or 1.4 BcF per day, by pipeline to Canada. This is the first of the various applications Bear Head LNG and Bear Head USA anticipate filing with DOE to enable the export of LNG from the project to free trade agreement and non-free trade agreement nations.
“This represents a significant step forward for our LNG export facility at Bear Head, Nova Scotia,” says John Godbold, Bear Head LNG’s Chief Operating Officer and Project Director. “With all of Bear Head LNG’s major Canadian approvals in place or moving through the regulatory process, we are on schedule to begin commercial operation in late 2018 to early 2019.”
Once constructed, the Bear Head LNG project will be capable of receiving, processing and liquefying natural gas, storing LNG, and loading LNG onto ocean-going vessels for delivery to export markets. The project will require LNG export authorization from Canada’s National Energy Board (NEB). Bear Head LNG filed an export licence application with Canada’s National Energy Board on November 6, 2014.
Ian Salmon, Bear Head LNG’s Chief Financial officer and Chief Commercial officer, said the export facility’s development schedule aligns with the projected ramp-up of natural gas production from U.S. supply basins, including the Appalachia basin. Bear Head LNG may also access supplies of natural gas from Eastern Canada.
“We have a comprehensive and robust plan for gaining access to natural gas supply,” said Salmon.
The Bear Head LNG project, which will have an initial production capacity of 8 million tonnes per annum, will be developed on a site that was partially developed and then maintained in hotidle status. The Bear Head LNG site is located on the Strait of Canso in Point Tupper, Richmond County, Nova Scotia, which is about half the shipping distance to major European markets compared to U.S. Gulf Coast ports. The location puts the Bear Head LNG project closer than its North American competitors, including those in British Columbia, to burgeoning natural gas markets in India. The project is being developed on a 255-acre site comprising industrial-zoned land (180 acres) and deep-water acreage (75 acres).
LNGL purchased 100% of the stock and assets of Bear Head LNG on August 27, 2014 from a subsidiary of Anadarko Petroleum Corporation for US$11 million. More than $100 million were invested prior to LNGL’s acquisition of Bear Head earlier this year, to design, complete engineering work, and develop the Bear Head LNG project in the early to mid 2000s.
Bear Head LNG already holds 12 permits in place to build an LNG facility on the deep, ice-and dredge free waters of the Strait of Canso. These include approved Environmental Assessments; permits to construct a gas plant facility from both the Department of Natural Resources and the Nova Scotia Utility and Review Board; and a Development Permit from the municipal government in Richmond County. The Bear Head LNG project will use LNGL’s OSMR technology, and integrate the design and engineering work already completed for the 8 mtpa LNG export terminal being developed in Louisiana by Magnolia LNG into existing feed for the project.
Press Release; Image: Bear Head LNG