Newfoundland mayor pumps brakes on proposed LNG plant

The mayor of Fermeuse, Newfoundland is cautioning against getting too far ahead in proposed plans for a potential LNG facility in the tiny town on Canada’s east coast, the Canadian Press reported on February 11.

Jerome Kenny, the mayor of the tiny hamlet, stated that his office has not been in touch with the companies proposing an LNG facility, despite a press release garnering significant media attention on the proposed project.

 "There was a news release by a company there a few weeks ago about an LNG (development). But we haven't received any information from that company," Kenny told the Canadian Press.

"As far as we're concerned, there is no proposed development taking place in Fermeuse," Kenny added.

In January, South Korea’s Hanwha Group signed a Memorandum of Understanding (MoU) with Canada’s Fermeuse Energy to jointly advance the Newfoundland and Labrador LNG project.

Officials from the South Korean shipbuilding giant visited the province, but Kenny insists no executives made contact with him, despite officials from both companies stating that they have met with Newfoundland and Labrador ministers.

For Fermeuse Energy to pursue the project it first needs the greenlight from Norway’s Equinor that it will go ahead with its proposed Bay du Nord offshore oil project located close to Newfoundland’s east coast, which is believed to boast about 0.3mn cubic metres of gas reserves.

With the natural gas project yet to be registered for government approval, Fermeuse says it is too early to begin discussions with the mayor and town council about the potential LNG project.

If the Fermeuse LNG project does proceed, it is estimated to have a price tag of at least $12bn, though it could be as much as $20bn.

An LNG export terminal on Canada’s east coast is garnering significant traction as the country seeks to strengthen trade relations with more international partners and reduce dependence on the US in the wake of President Donald Trump’s attempts to redesign trade relations with increased tariffs on imports into the US.

For Canada, an LNG facility on the country’s east coast would enable a quick delivery path to energy-hungry markets in Europe, as the EU pivots to sourcing increased supply of the super-chilled fuel from other trade partners as it will ban Russian LNG beginning in 2027.

The EU is also particularly keen to explore greater energy trade ties with Canada in the midst of Trump’s aggressive rhetoric of annexing Greenland from Denmark.