Dignitaries officially opened Repsol and Irving Oil's controversial liquefied natural gas terminal in Saint John on Thursday. (CBC)

Repsol and Irving Oil officially opened their controversial liquefied natural gas terminal in Saint John, N.B., on Thursday.

About 400 people attended the Canaport LNG commissioning ceremony, including politicians and energy-sector officials, who were all shuttled in from the facility's entrance on Red Head Road to a large white tent, where violinists played.

The $1-billion terminal is the first to be built in Canada and the first land-based LNG-receiving and re-gas terminal built on the East Coast of North America in 30 years.

"The Canaport LNG terminal commissioning demonstrates Repsol's commitment to the LNG business," said Antonio Brufau, chairman of Repsol, a Spanish company that partnered with Irving Oil on the project.

The facility, located along the Bay of Fundy, will provide natural gas to homes, businesses and industry in Canada and the northeast U.S. through a 145-kilometre pipeline.

It has a sendout capacity of one billion cubic feet per day, enough to heat five million homes, and can supply up to 20 per cent of New York and New England's gas demand, officials said.

The company's strategic plan aims to quadruple the volumes of LNG sold by 2012.

Irving spokesman Daniel Goodwin said while there's no crystal ball for natural gas prices, officials are already thinking about the future of the plant.

"If the markets were to grow, if the opportunities were to arise, we could expand this plant," he said. "We've also talked about and we're looking at the possibility of a co-generation power plant that would be very efficient."

Ongoing opposition

Controversy surrounding the project dates back to 2005, when Saint John common council agreed to give the proposed project a tax break.

Council voted 7-4 to cap its property taxes at $500,000 a year for 25 years, a deal critics say cost the cash-strapped city an estimated $5 million a year.

Premier Shawn Graham said Thursday it was the largest one-time tax reduction New Brunswick has ever seen, but it helped set the project in motion.

"The official opening of this LNG terminal represents a giant step forward in New Brunswick's ongoing development as an energy hub," he said.

"Today is a day of celebration I feel we can all be proud of."

Saint John Mayor Ivan Court said the deal was worth it, given the economic spinoffs. An estimated 1,600 people were employed at the site during the peak construction period and several businesses have been attracted to the area.

In 2006, residents protested the pipeline's route through Rockwood Park, citing environmental concerns.

The project has also been plagued by labour disputes over the years. Just last week, a judge granted an injunction against hundreds of New Brunswick tradespeople, who had been protesting outside a Saint John hotel about the hiring of out-of-province workers for the project.

The terminal started receiving tankers in June.

The liquefied natural gas is stored in three tanks, which each cover an area about the size of a football field. The third tank is expected to be complete early next year. When the terminal is in full operation, up to three LNG ships are expected to arrive for offloading every week.

Repsol will provide all the liquefied natural gas. Irving Oil will market the regassified natural gas in Atlantic Canada, while Repsol will market it to the rest of North America.

The opening celebration continues Friday night, with fireworks planned for the city's waterfront.

(With files from The Canadian Press)