Bear Head pipeline approved by Nova Scotia

04 August 2016, Week 30 Issue 429

Nova Scotia has approved the construction of a 62.5-km pipeline to feed the proposed Bear Head LNG export facility, according to a subsidiary of Australia’s LNG Ltd (LNGL). This marks the last initial approval needed to build the development. 

The company, in a statement on August 3, said Bear Paw Pipeline had received approval from the Nova Scotia Utility and Review Board for the link, which will run to Point Tupper, in Richmond County. 

“Bear Paw’s pipeline is integral to the development of Bear Head LNG,” said LNGL’s CEO and Bear Paw’s president, Greg Vesey. “The permit to construct is an important regulatory component. We are putting all the elements in place to develop a successful [LNG] export facility on Cape Breton Island and the pipeline is a strategic and critical element.”

Vesey went on to note co-operation with stakeholders and the local community.  

The pipeline will connect the Maritimes and Northeast Pipeline (M&NP) mainline to the export plant. Work should begin on financial close of the Bear Head LNG project. 

Canada’s National Energy Board (NEB) and the US Department of Energy (DoE) have granted export licences for the 8 million tonne per year Bear Head LNG terminal. 

According to a recent presentation, the first phase of front-end engineering and design (FEED) for the project has been completed, with the company using a design similar to its Magnolia LNG plant in the US. Subsequent steps for the Bear Head project include offtake agreements and, perhaps more challengingly, financial close. 

LNGL predicts Bear Head may cost around US$549-628 per tonne, which would be comparable to brownfield projects. 

While the approval is welcome news for LNGL, the company was forced to reduce staff numbers in July, reflecting the tough times for the industry. Commenting at the time, Vesey said while there was great potential for the company, the LNG industry was a “difficult market, and it is apparent that we have to reduce overhead costs”.