Canaport LNG Plant, St John, New Brunswick, Canada

Canaport LNG started the construction of a state-of-the-art Liquefied Natural Gas (LNG) receiving and regasification terminal in St John, New Brunswick in late 2006 (initial work, such as site clearance, was completed in May 2005).

Canaport LNG is a Canadian-based joint energy project owned by Repsol YPF and Irving Oil. The facility is scheduled to begin operations in late 2008 and will become the first LNG regasification plant in Canada.

The plant will supply natural gas to the domestic Canadian and American markets. At commissioning the distribution capacity of the terminal will be 28 million cubic metres (one billion cubic feet) of natural gas a day (1bcf/d, or approximately 10 billion cubic metres annually (bcma)), with a peak capacity of 1.2bcf/d, which will be expandable to 2bcf/d when the market is ready for additional natural gas supplies.

The Canaport LNG project requires an investment of C$756m. Repsol YPF completed its agreements in early 2007 to transport natural gas from the Canaport LNG Terminal to markets in Canada and the Northeast US via the Brunswick Pipeline and an expansion of the Maritimes and Northeast Pipeline system in the US.

CONSTRUCTION AND CONTRACTORS

Canaport LNG has awarded the construction contract to SNC-CENMC GP, a partnership between SNC-Lavalin of Montreal, Quebec, and Saipem SpA of Milan, Italy, and Kiewit-Weeks-Sandwell Partnership, a consortium of Peter Kiewit Sons Co of St John's, Newfoundland, Weeks Marine of Cranford, New Jersey and Sandwell Engineering of Vancouver, British Columbia.

Project construction status by February 2007 is 20% completed. The project is ahead of schedule due to the warmer winter weather in St John in late 2006 (construction began in September 2006). Currently 18% of the onshore facilities are finished and more than 26% of the offshore structure is completed.

In the onshore area of the project the construction of temporary installations, such as office buildings and material staging areas, is complete. The foundations for the construction of the LNG tanks and pipelines have also been finished.

The offshore jetty construction should be complete by mid-April 2007. The final sections of the facility, called 'jackets', are currently being fabricated in Newfoundland. The installation of the jackets will commence as early as April 2007 and be complete by October 2007. The offshore part of the project is expected to be complete by the start of the fourth quarter of 2007.

FABRICATION CONTRACTS

In October 2006 Lorneville Mechanical Contractors (LMC) of St John was awarded a significant contract to construct the steel interior and roofs of two LNG storage tanks at the terminal. In August 2006 another contract was awarded to OPRON of St John to complete the concrete exterior of the LNG tanks.

Modern LNG tanks require highly specialised materials and extremely sophisticated engineering construction techniques. The tanks are double-walled with highly efficient insulation between the walls to keep the stored natural gas in a liquid state for safe and efficient handling. The tanks maintain extremely cold temperatures of at least -161.5°C.

DOCKING OF TANKERS

The Canaport LNG project will be located adjacent to the Irving Oils' refinery at St John. Because the LNG unloading pier is fixed, ships will be able to unload LNG and crude oil at the same time.

All ships brought into Canaport LNG for unloading, whether at the monobuoy (where crude oil is unloaded), or at a pier, are brought in based on weather conditions. The pier will be built to withstand worst-case scenario weather, and ships will only be brought to the pier when the weather allows.

PIPELINE ROUTE

The LNG regasification plant will supply a new pipeline connected to the Canadian natural gas grid.

The new natural gas pipeline will run underground through the industrial corridor already in place at Rockwood Park, already the site of high-tension electrical power lines. This was chosen because it presented the least amount of risk to the community or to the environment.

Running an underwater pipeline across the St John harbour presented a greater degree of long-term risk and environmental impact to the St John area so this was rejected.