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Staking its sovereignty over a narrow strait on the New Brunswick-Maine border, Canada has told the United States that it won't allow ships carrying liquefied natural gas to pass through or use the disputed Head Harbour Passage.

Canadian ambassador to Washington Michael Wilson disclosed the results of a Canadian review in a letter sent yesterday to U.S. regulators and Secretary of State Condoleezza Rice.

"The impact of the proposed siting of the terminals, and the potential passage of LNG tankers through the environmentally sensitive and navigationally challenging marine and coastal areas of the sovereign Canadian waters of Head Harbour Passage present risks to the region of southwest New Brunswick and its inhabitants that the government of Canada cannot accept," Mr. Wilson wrote to Joseph Kelliher, chairman of the U.S. Federal Energy Regulatory Commission, in a letter obtained by The Globe and Mail.

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"We are therefore prepared to use domestic legal means to address our concerns and prevent such passage from occurring."

After carefully studying environmental concerns, navigational safety and "other considerations," Mr. Wilson said Canada has decided to oppose passage of ships into the proposed U.S. terminals.

Copies of the letter were sent to Ms. Rice and U.S. Energy Secretary Sam Bodman.

Access to the passage is considered essential for two proposed LNG terminals on the Maine side of Passamaquoddy Bay, a tidal bay on the Atlantic Ocean, near the mouth of the St. Croix River.

"I wanted you and the project proponents to be aware of the government of Canada's position in advance of FERC's formal consideration, so that the proponents could withdraw or amend their project applications to take that position into account," Mr. Wilson writes in the letter. "This will save them from having to expend resources on projects which cannot proceed as currently envisioned."

Canadian embassy spokesman Bernie Etzinger said Canada is not passing judgment on the projects, just on the use of Canadian waters. "We wanted to make clear the Canadian position" before FERC makes a decision, he said.

The U.S. claims the passage is international waters, while Canada insists it is Canadian territory because it flows through a channel created by Canadian islands. The Americans argue further that, even if the channel is internal waters, U.S. ships would have the right of passage under the international Law of the Sea Treaty.

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The Head Harbour Passage isn't the only Maritime sovereignty dispute between the two countries. Canada and the United States also have long-standing disputes over part of the Beaufort Sea on the Yukon-Alaska border as well the Northwest Passage.

Prime Minister Stephen Harper had previously expressed his opposition to the Maine LNG projects. But it marks the first time that Ottawa has confirmed it has completed a review of the issue and would go to court to block the passage of ships.

In December, two U.S. companies -- Downeast LNG Inc. and Quoddy Bay LNG LLC -- filed applications with FERC, the U.S. equivalent of the National Energy Board.

FERC is expected to take about 18 months to issue a decision on the applications. The companies had hoped to begin construction in late 2007, with startup planned as early as 2011.

The applications are part of a wave of proposals to build North American LNG terminals, which convert super-cooled gas liquids imported from Russia, the Middle East and elsewhere back into gas.

LNG is highly volatile and regulators have been careful about where they will allow terminals to be located.

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Mr. Wilson suggested that Canada stands ready to help the United States meet its need for natural gas. Canada is the largest exporter of both natural gas and oil to the United States.

"I remain committed to working with you and your government on enhancing that relationship in a way that takes into account the needs and concerns of both our countries," Mr. Wilson told Mr. Kelliher.

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