(MENAFN- ProactiveInvestors)
’s ( OTC ADR:LNGLY) Bear Head LNG project in Richmond County Nova Scotia has taken a major step forward in the Canadian regulatory process.
The Canadian Environment Assessment Agency has concluded the proposed design will be substantially the same as that which was previously submitted and approved under the Canadian Environmental Assessment Act.
It also noted that since some construction of the LNG facility has already taken place the Canadian
Environmental Assessment Act 2012 (CEAA 2012) does not apply to the LNG component of the project.
In addition the proposed installed gas‐fired power generation is not considered to trigger CEAA 2012 since the project will not use natural gas to generate electricity.
The Bear Head LNG project is expected to have initial LNG production capacity of 8 million tonnes per annum.
It is being developed on a site that was partially developed for a LNG import terminal and then maintained in hot idle status.
LNG Ltd managing director Maurice Brand said that this was a major step forward in the Bear Head regulatory process timeline in achieving the Company’s publicly stated target to obtain all regulatory clearances by mid‐2015.
Bear Head LNG
The Bear Head LNG project is located on the deep ice‐and dredge free waters of the Strait of Canso in Point Tupper Richmond County Nova Scotia.
It is being developed on a 255‐acre site comprising industrial‐zoned land (180 acres) and deep‐water acreage (75 acres).
In August 2014 LNG Ltd acquired the project from Anadarko Petroleum Corporation (NYSE:APC) for US$11 million giving it a second North American LNG project that expands and diversifies its development pipeline.
Prior owners had spent more than $100 million to design and complete engineering work and site construction of the Bear Head LNG site in the early to mid 2000’s.
The project already has 12 permits in place to build an LNG facility.
These include an approved environmental assessment; permits to construct a gas plant facility from both the Department of Natural Resources and the Nova Scotia Utility and Review Board; and a Development Permit from the municipal government in Richmond County.
Bear Head LNG project will use LNG Ltd’s patented OSMR® liquefaction technology and integrate the design and engineering work already completed for the 8Mtpa LNG export terminal being developed in Louisiana for the company’s wholly-owned Magnolia LNG in Louisiana into existing feed for the project.
In November Bear Head LNG filed an application with Canada’s National Energy Board (NEB) with an export licence for up to 12 million tonnes per annum of LNG as well as a licence to import up to 503Bscf of gas annually from the U.S.
The company also filed in December an application with the U.S. Department of Energy (DOE) for authorisation to export natural gas to Canada for a 25-year period.
LNG Ltd has already developed a gas supply plan and a transportation plan and has interest from several parties to enter into Tolling Agreements adopting the same business model as the Magnolia LNG Project.
Analysis
Shares in LNG Ltd should firm today on the news that its Bear Head LNG project has taken a major step forward in the regulatory process timeline. It is expected to meet the target of obtaining all regulatory clearances by mid‐2015.
This is supported by the Canadian Environment Assessment Agency concluding the Canadian
Environmental Assessment Act 2012 does not apply to the LNG component and proposed installed gas-fired power generation.
The company has already demonstrated its confidence in the project by filing with Canadian regulators for approval to export up an initial 8Mtpa of LNG beginning in 2019 before increasing to 12Mtpa in 2024 depending on market and supply conditions.
LNG Ltd remains well funded with a cash balance of $53.2 million and no debt as at 31st December 2014.
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