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Repsol and Irving to convert Canaport LNG into export terminal

Repsol Canaport LNG to value Talisman US shale gas

The Spanish oil and gas company Repsol SA and its local partner Irving Oil (Irving) have decided to convert their existing import liquefied natural gas (LNG) terminal Canaport LNG into an export LNG terminal from Saint John in the New Brunswick Province of the Eastern Canada.

In 2005, Repsol and Irving formed the Canaport LNG joint venture to import natural gas into Canada and USA in a period where North America was thirsty of imported energy.

Repsol-Irving_Canaport-LNG-Terminal-Conversion_Project_MapIn this Canaport LNG joint venture, Repsol and Irving share the working interests such as:

 – Repsol 75% is the operator

 – Irving 25%

In 2009, Canaport LNG started operations with a capacity of 1.2 billion cubic feet per day (cf/d) of natural gas.

Since that period, US developed its shale gas with all the severe consequences for the series of LNG import terminals which were built in the meantime along the North America east Coast, such as Canaport LNG.

In 2013, Repsol had to support a $1.3 billion write down because of Canaport LNG low activity, requiring the Spanish company to find solution.

The response came out in combined strategic chess moves.

In order to take the best advantage of this shale gas tide, Repsol triggered a $8.3 billion takeover on the Calgary-based Talisman Energy Inc. (Talisman)

Repsol submitted first Canaport LNG NEB application

Among its valuable assets,Talisman owns 78,000 hectares of lands in the famous Marcellus giant shale gas  basin from where its produces 471 million cf/d of gas.

Unfortunately Marcellus is located in the northeast region of USA, while all the export LNG projects are located in the south on the Mexico Gulf Coast.

Repsol-Irving_Canaport-LNG-Terminal-Conversion_ProjectIn this context the Canaport LNG geographical position  becomes an advantage in offering a far shorter distance between the US Pennsylvania shale gas production and the Canada New Brunswick terminal.

Therefore in combining Talisman acquisition with the Canaport LNG Terminal conversion, Repsol returns an hard lesson into a double win.

Repsol submitted in February 2015 an application to Canada National Energy Board (NEB) for Canaport LNG Terminal conversion.

This Canaport LNG terminal conversion  also relies on the project to return the Maritimes and Northeast Pipeline from south to north for the same reason to pipe US gas out to Canada.

In respect with its production capacity and available transportation infrastructure, Repsol and Irving are planning to build a 5 million tonnes per year (t/y) capacity LNG plant at Canaport LNG.

Assuming the pre-front end engineering and design (pre-FEED) to start this year, Repsol and Irving are targeting the Canaport LNG terminal conversion project to load the first shipment from Saint john in New Brunswick to Europe by 2020

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