Irving Oil revives Eastern Canada LNG plan

SAN FRANCISCO, CA -- Privately held Irving Oil Ltd., owner of Canada's largest oil refinery, said recently it is reviving plans to build a liquefied natural gas terminal in Eastern Canada at its oil terminal.

"We are moving ahead after going on hiatus with the project ... and moving forward with environmental assessment reports," said Jennifer Parker, an Irving spokeswoman.

Parker said the company was dusting off plans, shelved during the 2002 downturn in the U.S. power sector, to build a C$500 million ($374 million) LNG terminal in Saint John, New Brunswick.

Plans to revive the project follow recent calls by top U.S. government officials for more LNG imports to keep pace with growing gas demand, especially from new power plants, and to close the production gap as old gas fields are depleted.

Parker said Irving continued to talk with ChevronTexaco and other energy companies about jointly developing the LNG terminal, which would be built in the ice-free, deep-water Canaport.

The terminal would be able to send about 500 million cubic feet of gas a day to the market, much of it headed for new power plants in the Northeast U.S.

Construction on the terminal is tentatively scheduled to begin in 2004 with commercial operation slated for 2006.

Irving's Canaport has an oil terminal that brings in crude oil from South America, the North Sea and West Africa for use at its nearby Saint John refinery, which at 250,000 barrels a day is Canada's biggest.

The refinery is a big exporter of petroleum products like gasoline to the United States.

Irving Oil, based in Saint John, New Brunswick, is owned by New Brunswick's wealthy Irving family. Irving also holds stakes in other industries like forestry and media.

The slump in the U.S. power sector came amid the collapse of energy trading giant Enron Corp. in late 2001, allegations of market manipulation, and huge debts that triggered credit downgrades at many U.S. energy companies.

Reuters