One day after the Kitimat LNG project, which would be built on an Indian reserve near Kitimat, BC, received environmental approval (see Daily GPI, June 7), another British Columbia liquefied natural gas (LNG) project initiated the regulatory review process.

The C$350 million Prince Rupert LNG terminal, proposed by WestPac LNG Corp., would be built on Ridley Island, an industrial park seven miles outside of Prince Rupert. Service is expected to begin in 2011.

Calgary-based WestPac filed project plans with the Prince Rupert Port Authority, a federal agency that will be the lead regulator for the LNG project. WestPac previously entered into a memorandum of understanding with the Port Authority for a 30-year lease on 100 hectares on Ridley Island, which is adjacent to existing grain and coal shipping terminals. The LNG terminal will include liquids stripping facilities, 1 Bcf of storage, barge facilities and 130 MMcf/d of vaporization capacity. The gas from the project is expected to be shipped in liquid form and vaporized to support regional industrial growth and economic development.

“When built, our terminal will provide the Northwest Coast, Vancouver Island and the Lower Mainland of BC with access to a reliable supply of natural gas that should contribute to future economic development and power possibilities,” said WestPac President Mark Butler.

The Prince Rupert Port Authority operates the deepest harbor in North America offering easy and ice-free navigation access that can safely accommodate LNG tankers. “The port will rigorously assess the proposed terminal, beginning with a full environmental assessment,” said Don Krusel, CEO of the Port Authority. “We know numerous ports around the world operate safe LNG facilities, and we’re confident that WestPac will develop and operate their facility to the highest standards.”

Krusel also said the LNG facility fits well with the port’s strategic plan to diversify operations and grow a dynamic and sustainable business that will also help ensure the long-term economic health of Prince Rupert and the region.

“An unrestricted supply of natural gas becomes a catalyst for future investment and jobs because the availability of abundant, secure supplies of natural gas will remove bottlenecks that have constrained growth and development in the past,” said Prince Rupert Mayor Herb Pond in a statement on the project.

WestPac noted that LNG facilities are not new to British Columbia. A liquefaction facility has operated in the Tilbury Island region of Greater Vancouver since 1971. In fact, the Prince Rupert terminal originally was intended to be a liquefaction project until the North American gas market started driving prices sharply higher because of growing demand.

Nine LNG projects have been announced in Canada. The Canaport LNG terminal in St. John, NB, and the Bear Head terminal on Cape Breton Island, NS, already have been approved by regulators. Canaport is under construction but Bear Head has been put on hold until LNG supply can be found. A WestPac spokesman said his company has not signed any LNG supply agreements. But he said that with service planned to start in 2011, there’s still time for negotiations to take place.

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