Keltic gets cash, gas in new deal
Dunn sells LNG interests to focus on petrochemical plant; deal involves Russian gas exporters
GUYSBOROUGH - Keltic Petrochemicals president Kevin Dunn says the $4.5 billion LNG and petrochemical project proposed for Goldboro is in a much stronger position following a partnership deal announced this week.
The March 14 agreement has Keltic selling ownership of the LNG facility portion of the project to Maple LNG, a new Canadian company owned by Petroplus International's 4Gas and Suntera.
Dunn told The Journal Tuesday that selling the LNG terminal component of the project was always an option in order to allow Keltic to focus on the petrochemical portion of the development.
"Getting the feedstock was our focus over the past four years,"said Dunn. "It (the deal) gives us what we want; the petrochemical plant and all the jobs that go with it. That's the most important thing." The petrochemical plant would have about 500 long-term jobs and up to 3000 during construction.
Although Dunn won't give a dollar amount, a significant amount of money changed hands as part of the deal.
"It helps you move forward," Dunn said of the financial aspect. "You still need to put a lot of financing in place," he noted. "But once you have your feedstock and you have all the product sold, which comes naturally then, that's what financers look for."
A key component of this new deal is that Maple LNG has agreed to provide the option to Keltic to acquire feedstock from the imported LNG. Maple LNG at Goldboro will be designed to receive LNG carriers with capacities ranging from 75,000 metres cubed to the largest planned carriers at 250,000 metres cubed.
Dunn said his new partners are very serious about moving ahead with the project. "They're spending millions of dollars; you don't do that on a whim."
The Keltic president said the agreement is definitely good news for Guysborough County and neighbouring areas. "We're stronger now going forward. We're moving forward with all the right things. We have all the right ingredients."
Keltic signed a memorandum of understanding with Petroplus last December that would see Petroplus providing gas for the Keltic project. Petroplus created 4Gas to develop and operate its LNG terminals around the world. Other 4Gas LNG projects include the Dragon LNG project in Milford Haven, Wales and the LionGas project in Rotterdam, The Netherlands that are currently under development.
Keltic's new partnerships suggest it is likely that the Goldboro project will use Russian gas. Suntera, co-owner of Maple LNG, is an international energy company owned by Sun Energy Resources Ltd. and ITERA, which have significant interests in Russian gas. ITERA is a private natural gas company based in Russia that is experienced in exports of natural gas. The company has been involved in production of natural gas in Russia since 1998. ITERA has invested over $1 billion in the gas industry. ITERA is also the first private company to put gas fields into operation in the Far North of Russia.
Keltic's plan is to develop, construct, and operate a world-scale petrochemical plant in Goldboro, the first of its kind in Atlantic Canada. When completed, the facility will consist of ethylene, polyethylene, propylene and polypropylene plants as well as a supporting cogeneration plant and receiving terminal for LNG.
The LNG facility will provide feedstock to the petrochemical plant and natural gas to United States through the pipeline system. The complex will be located adjacent to the Sable Offshore Energy Plant in the Goldboro Industrial Park. Keltic expects the complex will take about three years to build from the time the ground is broken.
The project's regasification terminal is to be located adjacent to the Maritimes and Northeast Pipeline intake station at the Sable Offshore Energy Gas Plant at Goldboro. The LNG facility will be configured to support the supply of feedstock for Keltic's development of a world scale petrochemical complex on an adjacent site.
The development of 4Gas complements the strategy of The Carlyle Group and Riverstone Holdings, LLC who are majority shareholders in RIVR, which owns all of the shares in Petroplus.
A crucial next step for the Keltic project is getting environmental approval. Consulting firm AMEX is now preparing Keltic's environmental report, with plans to present it to the provincial government during the first week of April. Dunn says provincial authorities will then distribute the information to federal authorities.
