WestPac LNG Corp. of Calgary has shelved its plans for a terminal in Prince Rupert, BC (see Daily GPI, June 8, 2006), opting instead for a more economic C$2 billion combined liquefied natural gas (LNG) terminal and gas-fired power plant, the company said Tuesday in Vancouver.
“We believe LNG offers significant benefits to the people of BC [British Columbia] and we have a unique opportunity to enhance these benefits by adding power generation at our proposed LNG terminal on Texada Island,” said WestPac President Mark Butler. “The existing natural gas and power infrastructure on Texada and the opportunity of a power generation facility make a strong business case.”
The terminal would be sited on Texada Island, which is in the Strait of Georgia. WestPac has acquired a long-term lease at Kiddie Point at the north end of Texada Island in an industrial area next to a limestone quarry.
“The site can provide a safe, deepwater berth for LNG vessels as well as access to existing energy infrastructure, such as the Vancouver Island gas pipeline on-site and nearby connection to BC Hydro’s power grid through the existing power line crossing Texada Island and supplying electricity to Vancouver Island,” the company said. “Because this infrastructure is already in place, the proposed site is ideal for providing power generation and a secure source for natural gas with minimal environmental impact.”
The facility will be sized to provide about 500 MMcf/d of gas, two-thirds of which will fuel the power plant, Butler told NGI. Of the remainder, 50-70 MMcf/d will serve gas demand on Vancouver Island and about 150 MMcf/d will supply Vancouver proper (the Lower Mainland), he said.
“When built, our terminal will provide the coast, Vancouver Island and the Lower Mainland with access to a reliable supply of natural gas that should contribute to future economic development and power possibilities in the region,” Butler said.
Facilities at the Texada site will include:
The company decided to reconfigure its plans after steel prices spiraled out of control, Butler told NGI. The original Prince Rupert project was slated to cost C$300 million but quickly skyrocketed to around C$1 billion on rising steel prices. The Prince Rupert project was to ultimately be a series of satellite terminals served through transshipment of LNG via barges. The costs of the necessary pipelines and cryogenic tanks soon became prohibitive, though.
WestPac then decided to reconfigure the project around a terminal on Texada Island because of its proximity to gas and power transmission lines. While the current project costs more at a projected C$2 billion, it also includes a power plant, which is expected to cost about C$1.2 billion. The LNG facility is expected to cost around C$700 million, Butler said.
“We will actively consult the community and are committed to treat any concerns with thoughtful regard and consideration,” Butler said. He told NGI that since the terminal and power plant are proposed for an industrial area, he does not expect too much resistance to the project from area residents, who will benefit from jobs created by the project as well as the additional gas and power supply. However, 60-100 miles out from the project, where residents are not direct beneficiaries of the project, he did concede that there will be push-back.
At least one environmentalist is opposed to the project. “I think it’s absolutely ridiculous — the idea of allowing LNG tankers to come into the Georgia Strait,” Living Oceans Society spokeswoman Oonagh O’Connor told The Globe and Mail newspaper of Toronto.
WestPac pointed out that LNG facilities are not new to British Columbia. An LNG production and storage facility has operated in Tilbury Island in Delta since 1971 without incident, the company said. And an LNG receipt terminal proposed to be located near Kitimat, BC, recently received environmental approvals (see Daily GPI, June 7, 2006).
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