The new oil and gas hub of North America: Saint John?admin
New Brunswick’s powerful Irving family is poised to take a giant step in developing a continental energy hub in Saint John, with an announcement expected today that the family’s oil arm will build its second major refinery in the city.
“There is tremendous momentum around the idea of an energy hub in Saint John,” said Steve Carson, chief executive officer of Enterprise Saint John, the economic development office for the port city.
Mr. Carson, who would not comment on the Irving project, said the region is swimming in energy investment, with about $3-billion already committed and more likely to come. Much of the activity is aimed at markets in the United States, about 110 kilometres away.
Even without a new refinery, the Irving family would be the centrepiece of any energy entrepã´t taking shape in Saint John. They are the main drivers in a proposed $750-million liquefied natural gas (LNG) terminal in east Saint John, in partnership with Repsol YPF SA, the Spanish energy giant.
Fast progress in approving the LNG terminal has been a major coup, allowing Saint John to streak ahead of competing sites, including two proposed terminals in Nova Scotia.
The terminal’s initial capacity would be one billion cubic feet of natural gas a day.
In addition, Irving Oil Ltd. recently spent $1-billion in upgrading its existing oil refinery, already Canada’s largest.
Now, published reports say it is planning a second refinery that would potentially double its production in Saint John.
The new refinery is expected to have a capacity of 300,000 barrels a day — about the same volume as the current 46-year-old facility — and provide about 1,000 full-time jobs, reports said yesterday.
Using oil from the North Sea, Newfoundland and the Middle East, the existing refinery already accounts for more than 50 per cent of Canada’s export of finished petroleum products to the United States.
Irving Oil spokeswoman Jennifer Parker would not comment on published reports of a new refinery, but indicated important information about the company’s future plans will be disclosed in an Irving executive’s presentation today to the Saint John Board of Trade. “Our company is a strong believer in the energy hub concept for our region, and are always looking for opportunities to grow our region through the energy sector,” Ms. Parker said.
She pointed out that the company has made recent “foundational investments” — $1-billion in upgrading its existing refinery, as well as launching the LNG terminal. The progress of those initiatives allows the company to turn its attention to the future, she said.
The terminal and refinery plans bear the imprint of Kenneth Irving, the aggressive president of Irving Oil and a fourth-generation standard bearer of the forest-and-energy conglomerate founded by his great-grandfather in 1881. The new refinery is “a bold move,” said Michael Ervin, president of M.J. Ervin & Associates Inc., a Calgary-based energy consultancy. He said any new refinery investment faces a number of uncertainties, including the question of how quickly U.S. demand will grow and whether future product formulation regulations will add to the capital costs of the facility.
In addition to the Irving projects, Saint John will also benefit from a $1.4-billion upgrade under way at New Brunswick Power Corp.’s Point Lepreau nuclear power station west of the city.
The new Liberal provincial government has also talked about exploring the feasibility of an expansion there.
The concept of an energy hub is also gaining momentum from the presence of Repsol, which is investing in New Brunswick as a foothold in the North American market, Mr. Carson said.
In addition, Halifax-based Emera Inc. plans to build a 145-kilometre natural gas pipeline to connect the LNG terminal in Saint John to the state of Maine, thus carrying the gas into the U.S. Northeast and beyond.
Nova Scotia Premier Rodney MacDonald recently expressed fears that the proposed pipeline could harm proposals for natural gas projects in his province. He said the pipeline — known as a “bullet” because it bypasses other lines — could affect tolls charged on the Maritimes and Northeast pipeline between Nova Scotia and the United States.
“These are all issues that could potentially mean the difference between having a project in Nova Scotia or not having a project,” Mr. MacDonald told Canadian Press, referring to terminals proposed by Anadarko Petroleum Corp. for Bear Head on the Canso causeway and by 4Gas Ltd. in Goldboro, N.S.
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