Bear Head LNG plant another step closer to reality

A U.S. company is taking steps to set up Canada's first liquefied natural gas export facility in Cape Breton.

Bear Head LNG Corp. has applied for export licenses in the United States and Canada to convert and store natural gas in Point Tupper.

It filed an export licence application with Canada's National Energy Board in November. Last week, the companyfiled an application with the U.S. Department of Energy for authorization to export natural gas to Canada for a 25-year period.

The company purchased the site from Anadarko Global Holdings Company in August for $11 million.

John Godbold is the chief operating officer and project director for Bear Head LNG, a subsidiary of Australian-based Liquefied Natural Gas Limited.

He saidthey hope to begin construction on the two-million tonne liquefaction facility next year.

"It's a fantastic site, from an LNG perspective. It sort of fell off the radar screen for most people in the LNG industry, but certainly not those that understood the value of the location," said Godbold.

The previous owners abandoned the project to import natural gas, in part, because it couldnt secure a supply.

Godbold saidBear Head LNG plans to be an export facility.

"What we're doing now is we're reversing this, we're taking supply from North America and sending it to the LNG market," he said.

"Instead of being an import facilitywhere we're bringing gas into North America, we're reversing this processtaking gas from North America, liquefying it and then sending it to the LNG market."

Godbold said they're looking for a supply from the Scotian shelf, Western Canada and shale gas from the U.S.

He said the company would process the gas and store it for export to Europe and Asia, with one of the largest potential markets in India.

'We're right on target'

"We've spoken to customers completely around the worldfrom Europe and Asia, primarily. The European customers are fairly concerned about the geopolitical issues in security of supply into Europe,"said Godbold.

"Then the Asian markets, I think what a lot of people don't quite understand is that the Bear Head sitein Nova Scotia is very well situated geographically. From a shipping logistics standpoint, Nova Scotia hassome advantages."

The product would be shipped directly from Point Tupper on vessels designed to carry LNG.

Thesite is only partially developed and has been dormant since the early 2000s, but Godbold says the company is optimistic.

"I can understand the skepticism, given all the stuff that has happened in the past, but what I can assure people of is that weare going to make as big a go at this as we possibly can. We raised about $40 million to develop this project, that $40 millionwill be spent on developing this project," saidGodbold.

He also saidBear Head LNG has started payingproperty tax on the site.

"We do have an execution and development plan and were right on target with meeting all the milestones that we have on that."

Godbold saidBear Head LNG is hoping to begin commercial operation in late 2018 to early 2019.