Special Report-Repsol Facility Frontrunner to Deliver Canadian Gas to Europe

Repsol’s LNG facility in Canada’s East Coast has been designated as the best candidate to boost shipments to Europe, as the country’s east coast has only enough natural gas supply to accommodate one new LNG export facility.

Since May, Canadian government has been discussing increasing exports to Europe with Repsol’s LNG facility in New Brunswick and Pieridae Energy, which has proposed building an LNG facility in Nova Scotia.

Canada’s Environment Minister Guilbeault said on Wednesday that the amount of gas was available for only one facility at this point. He added that the possibility of building new pipelines in Canada was not very realistic.

Guilbeault pointed to the Repsol facility as the fastest project that could be used because it requires minimal permitting as there’s already an existing facility and a gas line.

The vast majority of Canada’s natural gas is produced in the western provinces of Alberta and British Columbia.

Europe has been looking to diversify gas supplies as it prepares to phase out imports of Russian energy following Moscow’s invasion of Ukraine. Talks have been ongoing with Germany and Spain about increasing Canada’s east coast exports.

Canada, the world’s sixth largest natural gas producer, does not currently have any operational LNG facilities, and the only one under construction is on the country’s west coast.

Guilbeault said Canada is aiming to increase oil and gas exports by 300,000 barrels per day by the end of this year to help improve global energy security, but in the short term can do no more.

Repsol’s LNG facility in Saint John, New Brunswick, is currently an import facility. Making it also an export facility may help lift supply in the medium term, but Guilbeault stressed that it must comply with Canada’s requirements for steady reductions of carbon and methane emissions.

He said the project could be deployed rapidly, but it would still require some years before it starts shipping to Europe.

While Canada has said it is keen to help its European allies, the government is also seeking to reduce its carbon emissions to net zero by 2050, and it has regularly missed its reduction goals in the past.

Approving new fossil fuel projects at this stage would appear to run against its climate goals.

Guilbeault said his conversations with German officials about increasing gas flows included the new LNG facility to be converted to exporting hydrogen instead of gas long before 2050.

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