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Maiwpukek becomes First Nation to obtain equity in Newfoundland offshore project

Partners in Jean D’Arc Basin project focused on first gas in 2030

ST. JOHN’S, N.L. — If things go according to plan, liquefied natural gas (LNG) from Newfoundland’s offshore oil fields will be heating up homes in Europe by the start of the next decade.

Leo Power, chief executive officer for LNG-NL, was one of the presenters on the first day of the Newfoundland Offshore Industries Association (NOIA) conference in St. John’s Tuesday, Sept. 21.

The project will involve three main components.
The first step is to put a production platform offshore, right in the middle of the existing oil fields, to tap into the natural gas that is a byproduct of those oil wells.

They’ll also need to build a 600-km underwater pipeline, encased in concrete, to flow the natural gas from offshore to the on-shore processing facility.

That’s where Placentia Bay comes in.

LNG-NL’s plan is to build the natural gas refinery at Grassy Point, Placentia Bay, near Arnold’s Cove.
TheyIt is one of the largest, deepest, bays in the world. It has pilotage support, thanks to the fact there’s already tanker traffic in the bay accessing the refinery at Come By Chance refinery and the Whiffen Head oil transshipment terminal, and a marine traffic communications centre.
Grassy Point has enough land, 32 acres, to develop an LNG terminal, there should be no obstacles to getting government permission for the site.

Power pointed out the site was previously approved by the province as the location for the transshipment terminal.
like Placentia Bay for several reasons.

The partnership

The LNG project involves several business partners, including the Miawpukek First Nation (MFN) of Conne River.
The official signing ceremony of a Project Framework Agreement at the NOIA conference on Sept. 21 marks the first-ever First Nations equity participation in an offshore energy project in Newfoundland and Labrador.

The First Nations Major Projects Coalition (FNMPC) has been working with the MFN since July of this year to provide technical advice and support. The FNMPC is a non-profit coalition that works to help First Nations gain ownership in the major projects taking place in their territories.

The MFN’s equity stake in the project is through its company, Miawupek Horizon Maritime Services Ltd.
The MFN’s Chief Misel Joe said in a news release, “Producing some of the world’s cleanest LNG aligns well with the values of our First Nation. Furthermore, the benefits by way of own-source revenue generation and the jobs this project will create for our community members is significant and a big part of our plan for self-sufficiency.

“Our inclusion in this project is historical, transformational, and an example of how the offshore energy industry, Canada, and Newfoundland and Labrador are truly embracing and giving effect to ‘reconciliation.'”
Other partners in the LNG project include Baine Johnston Corp. and Pennecon and McDermot International a company that has years of experience designing and building oil and gas production facilities and terminals.

Next steps

The plan to extract the natural gas from the Jean D’Arc Basin will involve many more steps, including an environmental assessment and the blessing of provincial and federal regulators.

The nuts and bolts will include construction of an offshore gas hub — either a floating or a subsea platform, an underwater pipeline to feed the natural gas to an on-shore natural gas liquefaction facility; and a shipping terminal where special tankers will collect the LNG for transport to market.

Power said there’s an estimated eight trillion cubic feet of natural gas in the Jean D’Arc Basin, the byproduct of the Hibernia, White Rose, Terra Nova and White Rose Extension oil fields.

LNG-NL says they can recover at least five trillion cubic feet of that gas — at a rate of four million tonnes annually — over 25 years. In terms of value, said Power, that would be the equivalent to 150 million barrels of crude oil.

“Now is the time to develop Newfoundland and Labrador’s vast reserves of offshore natural gas,” said Power, noting, “The trend towards de-carbonization is bullish for natural gas, and for exports of LNG.”
LNG has half the carbon intensity of coal, Power added.

“There is major coal to gas switching going on in the world, especially in places like China and India,” he said.
According to Power, global demand for LNG last year was about 370 million tonnes.
“Shell, BP (British Petroleum) and others are projecting the demand for LNG to double by 2040,” Power noted.
And the Newfoundland company wants to be part of that potential. And that brings another major challenge — financing.
The LNG project will cost a lot of money — about $10 billion to be specific.
“We don’t have the money yet to execute this project,” said Power, “but we want to tell the world … that we have very economic deposits of natural gas to liquify for export.”

Power said the company will continue to work with other companies, including offshore oil producers, to further explore the economics of the plan.
“We hope to have a final investment decision in three to four years, and first production by 2030,” he said.

Towards 2030

The focus on developing liquefied natural gas was highlighted in a plan unveiled by the provincial government in 2018.
“The Way Forward on Oil and Gas” report unveiled by then-premier Dwight Ball, proposed doubling offshore oil production, and adding natural gas production to the mix, by 2030.

What is LNG?

• LNG is simply natural gas in its liquid state. When natural gas is chilled to a temperature of about minus 160° C (minus 260° F) at atmospheric pressure, it becomes a clear, colourless and odourless liquid.
• LNG is non-corrosive and non-toxic. However, due to its extreme cold nature, LNG can flash freeze any flesh it touches if released, and so must be carefully manufactured and stored.
• The liquefaction process removes water, oxygen, carbon dioxide and sulfur compounds contained in the natural gas. This results in an LNG composition of mostly methane with small amounts of other hydrocarbons and nitrogen.
• As a liquid, natural gas is reduced to 1/600th of its original volume. This makes it feasible and economical to transport over long distances in specially designed ocean tankers. Once received, the LNG goes into storage tanks, is regassified, and delivered to markets.
Canadian LNG Projects
• Eighteen LNG export facilities have already been proposed in Canada —13 in British Columbia, two in Quebec and three in Nova Scotia — with a total proposed export capacity of 216 Million tons per annum (mtpa) of LNG (approximately 29 Billion cubic feet per day (Bcf/d) of natural gas).
• Since 2011, 24 LNG projects have been issued long-term export licences.
• Canada’s only operational LNG terminal (an import terminal) is Canaport LNG’s regasification import terminal located in Saint John, N.B.. https://www.canaportlng.com/about-canaport-lng
• According to a Conference Board of Canada study, which estimates the potential contributions LNG exports may make to the Canadian economy, an LNG export industry equivalent to 30 mtpa in British Columbia could add roughly $7.4 billion to Canada’s annual economy over the next 30 years, and raise national employment by an annual average of 65,000 jobs. The Government of Canada is working closely with British Columbia, other provinces and industry partners to create conditions to support the development of an LNG industry in Canada.

Source: Saltwire | This text was excerpted from the media outlet cited on September, 22, 2021 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.