By Nia Williams
(Reuters) - Pieridae Energy, one of the companies proposing a liquefied natural (LNG) gas terminal on Canada's east coast, has asked the federal government to help ensure pipeline operator TC Energy would be able secure permits to expand gas supply pipelines in a timely fashion.
Pieridae Chief Executive Alfred Sorensen told Reuters its Goldboro LNG project can only go ahead if TC expands capacity on its existing pipeline network.
"There's no other way. Without TC Energy there is no Goldboro LNG project," Sorensen told Reuters.
Since Russia's invasion of Ukraine triggered a global scramble for gas, European policymakers have looked to Canada as a potential new and reliable LNG supplier due to its abundant reserves and proximity to Europe.
But limited pipeline capacity has emerged as the main stumbling block for plans to ship gas from western Canada to the Atlantic Coast, where it could be liquefied and loaded onto tankers for export to Europe.
Calgary-based Pieridae has proposed building a 2.4 million-tonne-per-annum export terminal in Nova Scotia, which would cost around $3 billion and begin shipping in 2027, if construction could start next year. Spanish company Repsol is also considering an LNG export terminal in New Brunswick.
However, TC's existing pipeline network is not large enough to ship the amount of gas that would be required.
TC did not respond to questions about discussions with Pieridae, but in a statement to Reuters said it has "virtually no spare capacity" on its pipelines due to high energy demand.
At a recent meeting, Pieridae asked the federal government to help ensure the regulatory process for any pipeline proposal from TC is clear and does not get derailed by legal challenges or protests from outside groups.
"We've made our pitch and now we just have to wait and see. We've also been speaking to TC Energy, and they have to be the guys who decide to go first," Sorensen said.
A spokesman for Natural Resources Minister Jonathan Wilkinson did not directly comment on the Pieridae project.
"Canada was one of the first countries to commit to increase oil and gas exports after the illegal invasion of Ukraine, and we continue to work with international partners to bolster global energy security," spokesman Keean Nembhard said.
Many oil and gas industry players say Canada's regulatory process for new pipelines is too lengthy and onerous, while environmental groups argue past projects were not properly scrutinized.
"The government is happy and keen to work with private sector to reduce friction in the regulatory process, but we're not about to circumvent the regulatory process, or change it. We have confidence in it. And we're not going to make uneconomical projects economical," said a government source who was not authorized to speak on the record.
The federal government has overhauled its environmental review process for major projects, but TC previously scrapped its Energy East and Keystone XL oil pipelines after years of delay.
Energy East encountered fierce public opposition and regulatory hurdles, while U.S. President Joe Biden followed through on a campaign pledge to revoke the permit on KXL.
TC's Coastal GasLink pipeline in British Columbia, which was subject to a provincial regulatory review and will supply the Shell-led LNG Canada project, is nearly 75% complete but facing ongoing protests from First Nations.
(Additional reporting by Steve Scherer in Ottawa; Editing by Denny Thomas, Jonathan Oatis and Marguerita Choy)