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Latest BC LNG Export Proposal Not Starting From Scratch

Canadian ambitions for liquefied natural gas (LNG) exports have vaulted to 26 Bcf/d -- a total of proposed overseas tanker loadings that is 53% higher than the nation's 17 Bcf/d production peak to date in 2005.

Rising volumes sought for export terminals over the next quarter-century approach 242 Tcf, or about triple current Canadian gas reserves. Project sponsors forecast that horizontal drilling and hydraulic fracturing, primarily into northern British Columbia (BC) shale deposits, will support the LNG trade with abundant supplies left over.

The 15th and latest entry into the lineup for long overseas export licenses from the National Energy Board (NEB) spreads LNG development planning into the thickly populated BC lower mainland region of Vancouver and its suburbs.

WesPac LNG aims to ship out 400 MMcf/d, or a total of 3.6 Tcf over 25 years, from a site on Tilbury Island, a short distance upstream in the Fraser River from the Pacific Coast of the Vancouver satellite community of Delta.

Unlike almost all other Canadian LNG projects, WesPac is not starting entirely from scratch at remote sites with little or no previous connections -- or pipeline links -- to the gas industry.

The Delta scheme is a partnership of a Canadian arm of Houston-based WesPac Midstream and FortisBC Energy Inc., the province's primary gas and power utility. The project is an 80-fold expansion of a plant that since 1971 has made, stored and trucked out up to 5 MMcf/d of liquefied gas during peak fuel demand seasons in communities as far away as Watson Lake in the Yukon.

An encouraging beginning is under way. Although the Vancouver region is notoriously hard on any industry that threatens to change or disrupt the natural environment or neighborhoods, the Tilbury Island plant has succeeded in making a C$400 million (US$370 million) start on growing. An expansion to 33 MMcf/d is under construction, driven by sales to truck fleets that are doing fuel conversions to LNG from increasingly expensive diesel.

Only time will tell if the site's charmed life will continue for the far larger LNG overseas tanker proposal. To reach Tilbury Island, ships entering the Fraser River have to motor past environmentally sensitive locations: the Alaksen National Wildlife Area and George C. Reifel Bird Sanctuary, where flocks of 25,000 geese and 15,000 ducks congregate along with up to 250 species of less-numerous species such as bald eagles and sandhill cranes.

All but three of the 15 Canadian overseas LNG export projects are on the Pacific Coast of BC. Both the eastern and western ends of the lineup are poised to grow yet longer.

In the Atlantic region, Spain's Repsol energy conglomerate is preparing a new proposal for its Canaport terminal in New Brunswick. On the Pacific side, plans are developing for a partnership between Alberta and Chinese investment interests to build an LNG plant as an anchor tenant for an international industrial park beside Edmonton.

Forecasting how much of the proposed LNG export network will eventually be built remains guesswork, with analysts currently predicting deliveries will rise into somewhere in a range of 4-8 Bcf/d. All the projects continue to seek overseas customers. None have begun construction or set firm completion dates.

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